ALGT · Allegiant Travel
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $80
Updated ·
How this view changed
- · Rated Medium. Results, 4 November 2026: Q3 adjusted EPS was a $0.03 loss against a $0.53 loss estimate, the above-$6.00 full-year guide was kept, and Q4 adjusted EPS was guided to $1.00-$1.50 against a $0.79 estimate.
Price against the kill line
15.2% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $80.00, on record since 10 November 2026. The shares are up 9.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $80, which would return the shares toward the $74.46 level at which they entered the Q3 report. Fuel holding above $4.75 a gallon or a cut to the above-$6.00 full-year adjusted EPS guide would also end the case.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 6 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 962
- Revenue, change on a year (%)
- +71.1
- Operating margin (%)
- 1.1
- Free cash flow, four quarters ($M)
- −25.7
- Net cash, cash less debt ($M)
- −2,084
- Price to earnings (×)
- 46.3
- Enterprise value to sales (×)
- 1.4
- Enterprise value to operating income (×)
- 25.6
All filed numbers
What Allegiant Travel reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| filed | 962 | +71.1 | 1.1 |
| filed | 944 | +36.9 | 2.2 |
| filed | 732 | +4.8 | 11.1 |
| filed | 656 | +4.5 | 10.2 |
| filed | 562 | 0.0 | −4.8 |
| filed | 689 | +3.5 | −9.8 |
| Pre-tax income ($M) | −20.1 |
| Net income ($M) four quarters: 54.4 | −15.2 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +49.5 |
| Operating cash flow ($M) | 215 |
| Capital spending ($M) | 241 |
| Free cash flow ($M) | −25.7 |
| Cash and short-term investments ($M) | 854 |
| Debt ($M) long-term debt | 2,938 |
| Net cash, cash less debt ($M) | −2,084 |
| Deferred revenue ($M) +19.4% on a year | 97.9 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 115 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 1,765 |
| Market value ($M) | 2,516 |
| Enterprise value, market value plus net debt ($M) | 4,600 |
| Enterprise value to sales (×) | 1.4 |
| Enterprise value to operating income (×) | 25.6 |
| Price to earnings (×) | 46.3 |
| Price to book value (×) | 1.4 |
| Free-cash-flow yield (%) | −1.0 |
Short interest (FINRA, settled 15 October 2026, published 13 November 2026): 7.8% of shares outstanding sold short, 4.8 days of average trading to cover, −16.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $1.1M |
| 12 monthsfrom | $0 | $35.5M |
The thesis
Allegiant Travel Company's third-quarter report on 4 November 2026 removed the main near-term risk to the case, and the shares have rebounded sharply, so the question now is whether the fourth quarter delivers the guided earnings at much higher fuel prices. The company reaffirmed its full-year 2026 adjusted earnings per share (EPS) guide of more than $6.00 and guided fourth-quarter adjusted EPS to $1.00–$1.50, against a $0.79 analyst estimate (Benzinga headline, 4 November 2026). The shares closed at $97.21 on 9 November 2026 (split- and dividend-adjusted daily closes), 18.4% below the $119.16 52-week high.
The narrative is accelerating again after a failed rerating: the shares closed at $73.59 on 27 October 2026, entered the report at $74.46, and then reached $97.21 within seven sessions of the report. The 14-day relative strength index (RSI) is 82.4, a reading that normally marks a stretched move. The new concern is that the shares have moved ahead of a fourth quarter that carries a fuel assumption of $4.75 a gallon, up from $3.70 at the prior call (Finviz summary of the earnings call, 5 November 2026).
The company holds an investor day on 7 December 2026, which is the next dated event that can extend or cap the move.
Bullish and bearish views on Allegiant Travel Company
The bull case on Allegiant Travel Company (ALGT), in brief: third quarter beat on earnings and revenue. The bear case: the full-year guide is unchanged while fuel is higher.
Bull case
- Third quarter beat on earnings and revenue. Adjusted EPS was a $0.03 loss against an estimate of a $0.53 loss, and revenue was $961.559M against $948.195M (Benzinga, 4 November 2026). The company had guided to between a $1.00 loss and breakeven in August.
- Unit revenue keeps accelerating. Pro forma revenue per available seat mile (TRASM) rose 28.3% in Q3 on 5.7% less capacity, after 16.4% in Q1 and 24.6% in Q2 (Finviz summary of the company release, 5 November 2026). Management guided Q4 TRASM growth above 20%.
- Costs came in better than guided. Non-fuel unit cost rose 9.1%, below the 10%–12% range management had given (Finviz, 5 November 2026).
- The fourth-quarter guide rose despite dearer fuel. Adjusted EPS of $1.00–$1.50 and an adjusted operating margin of 6%–7% sit on a $4.75 per gallon fuel assumption, against $3.98 realised in Q3 (Finviz, 5 November 2026).
- Sell-side targets remain well above the share price. Benzinga reported on 9 November 2026 that analysts increased their 12-month price target.
Bear case
- The full-year guide is unchanged while fuel is higher. The above-$6.00 figure was reaffirmed, not raised, and it was above $8 at the start of the year (Finviz, 5 November 2026). It still needs the fourth quarter to land inside $1.00–$1.50 at $4.75 fuel.
- Sun Country is still thin and shrinking. Sun Country's adjusted operating margin was 1.1% and it stayed loss-making before tax on an adjusted basis. The company expects Sun Country scheduled service to fall about 10% in Q4 because of pilot shortages (Finviz, 5 November 2026).
- The balance sheet absorbed a large cash payment. Liquidity fell to $1.1B from $1.3B after a $267M pilot retention payment, and net debt was $2.1B (Finviz, 5 November 2026).
- GAAP earnings remain negative. GAAP EPS was a $0.56 loss, with $19.1M of special charges, mostly integration costs (Finviz, 5 November 2026).
- A director sold into the rally. A headline dated 6 November 2026 reports that director Charles W. Pollard sold shares worth $930,400. A single sale is a small sample and supports no conclusion about insider intent.
Price setup
The shares closed at $97.21 on 9 November 2026. The 52-week high is $119.16, the three-month price change is 15.1%, and the 14-day RSI is 82.4. The close was $73.59 on 27 October 2026 and the prior low close was $66.90 on 14 October 2026.
The advance came in a short span, and the earnings date has passed. Crowding evidence is the RSI reading, the director sale reported 6 November 2026 and the speed of the rebound.
Fuel is the swing input. The company assumes $4.75 a gallon for Q4, and Delta Air Lines cut its own full-year EPS forecast on 9 October 2026 citing a $6 billion annual rise in fuel costs (Al Jazeera). Weekly Gulf Coast jet fuel prices are the check on the assumption.
Catalysts ahead
- 7 December 2026: Allegiant investor day. May supply Sun Country synergy detail and 2027 capacity and cost targets that decide whether earnings estimates move higher.
Elapsed catalysts
- 11 November 2026: EIA Weekly Petroleum Status Report and Gulf Coast jet fuel spot prices (repeats each Wednesday). Tracks fuel against the $4.75 per gallon Q4 assumption that underpins the $1.00-$1.50 EPS guide. (passed)
What would change the view
A daily close below $80, which would return the shares toward the $74.46 level at which they entered the Q3 report. Fuel holding above $4.75 a gallon or a cut to the above-$6.00 full-year adjusted EPS guide would also end the case.
The risks this note tracks, each with what would confirm it:
- Jet fuel stays above the $4.75 per gallon Q4 assumption, so Q4 earnings fall short of the $1.00-$1.50 guide and the above-$6.00 full-year figure is missed. Confirmed by: Gulf Coast jet fuel in the weekly EIA series holding above $4.75 through December, or a guide cut before the Q4 report.
- Sun Country pilot shortages cut capacity and keep the acquired airline loss-making longer than planned. Confirmed by: Q4 Sun Country scheduled service falling by more than the roughly 10% the company expects, or the adjusted operating margin staying near the 1.1% reported for Q3.
- The rebound reverses because the shares moved ahead of the fourth quarter. Confirmed by: a daily close below $80 or further insider sales reported on SEC Form 4 filings.
- Leverage and liquidity limit room for error after the $267M pilot retention payment. Confirmed by: liquidity falling below the $1.1B reported for Q3, or new secured borrowing at a coupon above 7.125%.
What it trades with
Allegiant trades with US leisure airlines and with jet fuel prices. Delta's 9 October 2026 guide cut set the sector's fuel reference, and Allegiant's lower-income leisure customer base makes consumer spending data relevant. The company has consolidated Sun Country since 13 May 2026, so year-over-year comparisons through Q1 2027 include acquired results. The share count is small, about 27.3M implied by Q3 guidance, so sentiment shifts produce large percentage moves.
Notes
- Sun Country has been consolidated since 13 May 2026, so year-over-year revenue and cost comparisons through Q1 2027 include acquired results and are not organic.
- Q3 is the seasonally weakest quarter for a single-season leisure carrier; the full-year adjusted EPS guide of more than $6.00 depends on the fourth quarter.
- Q3 guidance implied a share count of about 27.3M, a small base on which sentiment shifts produce large percentage moves.
- A single operating certificate for the combined airline is targeted for FAA approval in 1H 2028; dual-fleet costs persist until then.
- The Expedia agreement announced 14 July 2026 is exclusive for 12 months and ends a direct-only sales model that produced 92.3% of 2025 scheduled revenue.
The evidence, claim by claim (8)
- Q3 2026 consolidated revenue was $961.559M against a $948.195M estimate; adjusted EPS was a $0.03 loss against a $0.53 loss estimate. Benzinga headline on Allegiant Q3 2026 results · as of
- Q4 2026 adjusted EPS guided to $1.00-$1.50 against a $0.79 estimate; full-year adjusted EPS guide of more than $6.00 reaffirmed. Benzinga headline; Allegiant Q3 2026 release · as of
- Pro forma TRASM rose 28.3% in Q3 on 5.7% less capacity; non-fuel unit cost rose 9.1% against a guided 10%-12%. Finviz summary of Allegiant Q3 2026 release · as of
- Q3 fuel averaged $3.98 a gallon against a $3.80 assumption; the Q4 assumption is $4.75 a gallon, up from $3.70 at the prior call. Finviz summary of Allegiant Q3 2026 release and call · as of
- Liquidity was $1.1B, down from $1.3B after a $267M pilot retention payment; net debt was $2.1B. Finviz summary of Allegiant Q3 2026 release · as of
- Sun Country adjusted operating margin was 1.1%; Sun Country scheduled service is expected to fall about 10% in Q4 on pilot shortages. Finviz summary of Allegiant Q3 2026 release · as of
- ALGT closed at $97.21, 18.4% below the $119.16 52-week high, with a 14-day RSI of 82.4. Split/dividend-adjusted daily closes · as of
- Director Charles W. Pollard sold shares worth $930,400. Company news headline on insider sale · as of
Sources
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