Value
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.1 |
| P/S | 9.7 |
| EV/EBITDA | 8.3 |
| Fwd P/E | 9.6 |
| PEG | 4.1 |
| Analyst target | 6.0 |
- ▸Forward P/E: 8.1x
- ▸PEG: 2.45
- ▸Attractively valued
SKYW · Why this verdict
Why SkyWest (SKYW) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
SkyWest has beaten analyst earnings estimates in 3 of the last 4 quarters, with an average positive surprise of 11.4%, suggesting management's operational execution is consistently ahead of market expectations. Earnings | The earnings beat streak extends to at least 4 of the next 4 reported quarters, with average surprise remaining above 8% over 12 months. | →Stable |
| CounterThe one quarterly miss came at a -1.13% shortfall, and forward guidance is unknown, leaving no visibility into whether the beat pattern can be sustained if fuel costs or pilot wage negotiations spike. | ||
SkyWest trades at a forward price-to-earnings ratio of 7.7 times with a price-to-earnings growth ratio of 2.32, and analyst consensus implies 32% upside to a price target of approximately $122, suggesting the market is significantly undervaluing the company's earnings power. Valuation breakdown | The stock price rises above $110 within 12 months, reflecting at least partial re-rating toward analyst consensus target. | →Stable |
| CounterRegional airline economics are structurally margin-thin, and low multiples may be permanently justified given high sensitivity to jet fuel prices, labor costs, and major carrier capacity decisions. | ||
Revenue is concentrated in United and Delta, creating a structural dependency where any capacity reduction, contract renegotiation, or financial stress at either major carrier could materially impair SkyWest's revenue base. Bear case | Major airline partners maintain or grow their regional flying agreements, with no public announcements of capacity cuts to SkyWest routes over 12 months. | →Stable |
| CounterSkyWest's dedicated fleet and crew relationships make it a preferred regional partner, and switching costs for the majors are high, providing some de facto revenue stability. | ||
The stock is below its 200-day moving average with the moving average declining at 4.4% per month, indicating a confirmed downtrend, though the MACD is improving and RSI has reached 61, suggesting early momentum recovery may be underway. Momentum breakdown | The stock crosses back above its 200-day moving average and holds that level for at least 30 days within 12 months. | →Stable |
| CounterRSI at 61 while still below the 200-day moving average is a classic bear rally pattern; without the moving average recovery the downtrend remains intact and the stock could retest lower lows. | ||
SkyWest has beaten analyst earnings estimates in 3 of the last 4 quarters, with an average positive surprise of 11.4%, suggesting management's operational execution is consistently ahead of market expectations.
→StableEarnings
- Expectation
- The earnings beat streak extends to at least 4 of the next 4 reported quarters, with average surprise remaining above 8% over 12 months.
CounterThe one quarterly miss came at a -1.13% shortfall, and forward guidance is unknown, leaving no visibility into whether the beat pattern can be sustained if fuel costs or pilot wage negotiations spike.
SkyWest trades at a forward price-to-earnings ratio of 7.7 times with a price-to-earnings growth ratio of 2.32, and analyst consensus implies 32% upside to a price target of approximately $122, suggesting the market is significantly undervaluing the company's earnings power.
→StableValuation breakdown
- Expectation
- The stock price rises above $110 within 12 months, reflecting at least partial re-rating toward analyst consensus target.
CounterRegional airline economics are structurally margin-thin, and low multiples may be permanently justified given high sensitivity to jet fuel prices, labor costs, and major carrier capacity decisions.
Revenue is concentrated in United and Delta, creating a structural dependency where any capacity reduction, contract renegotiation, or financial stress at either major carrier could materially impair SkyWest's revenue base.
→StableBear case
- Expectation
- Major airline partners maintain or grow their regional flying agreements, with no public announcements of capacity cuts to SkyWest routes over 12 months.
CounterSkyWest's dedicated fleet and crew relationships make it a preferred regional partner, and switching costs for the majors are high, providing some de facto revenue stability.
The stock is below its 200-day moving average with the moving average declining at 4.4% per month, indicating a confirmed downtrend, though the MACD is improving and RSI has reached 61, suggesting early momentum recovery may be underway.
→StableMomentum breakdown
- Expectation
- The stock crosses back above its 200-day moving average and holds that level for at least 30 days within 12 months.
CounterRSI at 61 while still below the 200-day moving average is a classic bear rally pattern; without the moving average recovery the downtrend remains intact and the stock could retest lower lows.
TrendMatrix Research · core thesis
Engine thesis — one sentence
SkyWest has beaten earnings estimates in 3 of the last 4 quarters with an average positive surprise of 11%, trades at a forward price-to-earnings ratio of 7.7 times, and offers a 41% margin of safety — but heavy reliance on United and Delta for revenue creates a structural concentration risk that constrains upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.5 |
| ROA | 3.5 |
| Gross margin | 2.3 |
| Op margin | 4.9 |
| Net margin | 5.2 |
| Current ratio | 2.5 |
| FCF quality | 1.0 |
| Moat | 4.8 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: 12% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
3.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.2 |
| EPS growth | 2.7 |
Momentum
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 7.5 |
| Volume | 0.0 |
- ▸Overbought (RSI 76)
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 76 (late-cycle distribution risk)
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.4 |
| Analyst rating | 6.6 |
| Price target | 8.1 |
- ▸LLM news sentiment: -0.33 (n=7)
- ▸Light analyst coverage (6.0) — signal dampened
- ▸Analyst upside: 24%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 6.1 |
| growth rank | 2.5 |
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.2 |
| support resistance | 1.2 |
| 52w position | 6.0 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 6.6 |
| volatility | 4.9 |
| put call | 0.0 |
| implied vol | 4.5 |
| beta | 5.2 |
| debt equity | 5.6 |
| news risk | 5.0 |
- ▸Elevated put/call: 49.67
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 8.2 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:4.5>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.70
- EARNINGS_PROXIMITY:18d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.5<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- MOMENTUM:4.5<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.54
Upside
+8.1%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 76
EdgeCatalyst-Driven — Earnings in 18d with 3/4 beat streak
SuitabilityAggressive — Beta 1.46>1.3, MCap $3.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.5<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 0.54 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.6, Catalyst at 6.6, and Sentiment at 6.0; the weakest are Technical at 3.1, Growth at 3.5, and Quality at 4.2. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.54 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Beat Track Record
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters.
- P2Deep Value At 7x Earnings
Trip ifStock price drops below $78, more than 15% below the current price of $91.96.
- P3Customer Concentration Risk
Trip ifEither United or Delta announces capacity reductions greater than 10% for SkyWest routes in any 12-month period.
- P4Death Cross Momentum Recovery
Trip ifThe 200-day moving average slope remains below 0% for more than 6 consecutive months.