Value
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| Fwd P/E | 4.6 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 26.9x
- ▸PEG: 0.24
- ▸Attractively valued
ULCC · Why this verdict
Why Frontier Group Holdings (ULCC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Frontier is growing revenue about 53% year over year and has beaten EPS estimates four quarters running, but weak business quality (1.6/10), 42% short interest and a price already above the analyst target limit the upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Frontier has beaten EPS estimates in each of the last 4 quarters, with an average surprise of about 137%, showing estimates are set too low. Last 4 quarters | Continued EPS beats over the next 4 quarters as the latest quarter flipped to a positive $0.18 actual. | →Stable |
| CounterBeats are measured against very low or negative estimates, so large percentage surprises on tiny bases say little about durable profitability. | ||
Quarterly revenue reached $1.355B for the period ended 2026-09-30 versus $886M a year earlier, consistent with the 53% YoY growth noted in the data. Revenue quarters | Quarterly revenue stays above $1.2B over the next 12 months, in line with the $1.32B next-quarter estimate. | →Stable |
| CounterAirline revenue is seasonal and capacity-driven; the jump may reflect a cyclical peak rather than sustainable demand and can reverse quickly. | ||
Business quality scores only 1.6/10 with no competitive moat, and the quality shortfall is what drives the engine's exit recommendation despite strong growth and momentum. Quality breakdown | Margins and returns on assets improve enough over 12 months to lift the quality score toward the 4.0 minimum. | ↑Improving |
| CounterLow-cost airlines can lift margins in strong demand cycles, and quality scores may lag a real operating inflection. | ||
At $6.45 the stock trades 10.8% above the $5.75 analyst target, so the reward-to-risk ratio is negative at -0.72 with 15% downside. Analyst target | Analyst targets are revised up toward the current price within 12 months if earnings keep beating. | ↓Deteriorating |
| CounterAnalyst targets lag a fast-improving earnings story, and momentum with a golden cross can keep the price above the target for a long time. | ||
Short interest of 42% and insider selling of about $2.7M in 90 days with zero buys point to informed skepticism about the stock. Key risks | Short interest declines and insiders stop net selling if the turnaround proves durable. | →Stable |
| CounterHigh short interest can fuel a squeeze, and insider sales may be routine diversification rather than a negative signal. | ||
Frontier has beaten EPS estimates in each of the last 4 quarters, with an average surprise of about 137%, showing estimates are set too low.
→StableLast 4 quarters
- Expectation
- Continued EPS beats over the next 4 quarters as the latest quarter flipped to a positive $0.18 actual.
CounterBeats are measured against very low or negative estimates, so large percentage surprises on tiny bases say little about durable profitability.
Quarterly revenue reached $1.355B for the period ended 2026-09-30 versus $886M a year earlier, consistent with the 53% YoY growth noted in the data.
→StableRevenue quarters
- Expectation
- Quarterly revenue stays above $1.2B over the next 12 months, in line with the $1.32B next-quarter estimate.
CounterAirline revenue is seasonal and capacity-driven; the jump may reflect a cyclical peak rather than sustainable demand and can reverse quickly.
Business quality scores only 1.6/10 with no competitive moat, and the quality shortfall is what drives the engine's exit recommendation despite strong growth and momentum.
↑ImprovingQuality breakdown
- Expectation
- Margins and returns on assets improve enough over 12 months to lift the quality score toward the 4.0 minimum.
CounterLow-cost airlines can lift margins in strong demand cycles, and quality scores may lag a real operating inflection.
At $6.45 the stock trades 10.8% above the $5.75 analyst target, so the reward-to-risk ratio is negative at -0.72 with 15% downside.
↓DeterioratingAnalyst target
- Expectation
- Analyst targets are revised up toward the current price within 12 months if earnings keep beating.
CounterAnalyst targets lag a fast-improving earnings story, and momentum with a golden cross can keep the price above the target for a long time.
Short interest of 42% and insider selling of about $2.7M in 90 days with zero buys point to informed skepticism about the stock.
→StableKey risks
- Expectation
- Short interest declines and insiders stop net selling if the turnaround proves durable.
CounterHigh short interest can fuel a squeeze, and insider sales may be routine diversification rather than a negative signal.
Per-dimension breakdown
Quality
1.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.1 |
| Net margin | 0.0 |
| Current ratio | 2.5 |
| Moat | 4.2 |
| Piotroski F | 4.4 |
- ▸No competitive moat
- ▸Quality concerns
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 53% YoY
Momentum
8.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 9.5 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.6 |
| Analyst rating | 5.0 |
| Price target | 3.4 |
- ▸Below analyst target
Insider
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Notable insider selling — $2,659,999 (0.179% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.3 |
| quality rank | 0.3 |
| growth rank | 9.4 |
- ▸Industry growth leader
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.0 |
| 52w position | 7.7 |
| gap | 5.0 |
Risk (lower is worse)
0.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 0.9 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 0.0 |
| beta | 1.2 |
| debt equity | 0.0 |
- ▸High short interest justified: 42%
- ▸Elevated put/call: 3.12
- ▸High IV: 90%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (4)
- MOMENTUM:8.7>=5.5
- EARNINGS_PROXIMITY:100d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.5=NEGATIVE
Warning (2)
- INSIDER:0.18%=MODERATE
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.51
Upside
-22.6%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 69, MACD bullish
EdgeInst Constrain — Small cap ($1.5B) below institutional reach
SuitabilityAggressive — Beta 2.65>1.3, MCap $1.5B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -1.5=NEGATIVE outcome against Growth at 10.0 and asymmetric R:R of -1.51.
The strongest dimensions are Growth at 10.0, Momentum at 8.7, and Catalyst at 7.6; the weakest are Risk (lower is worse) at 0.3, Quality at 1.6, and Technical at 3.4. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -1.51 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P2Strong Revenue Growth Trajectory
Trip ifQuarterly revenue falls below $1.1B on a year-over-year basis decline of more than 10%.
- P3Weak Business Quality Constraint
Trip ifQuality score rises above 4.0 from the current 1.6, showing quality is no longer the binding constraint.
- P4Price Above Analyst Target
Trip ifAnalyst target rises above $7.50 from the current $5.75, putting the price below the target.
- P5High Short Interest Insider Selling
Trip ifShort interest falls below 20% from the current 42% while insider open-market buys exceed $500,000 in 90 days.