SkyWest (SKYW) Margin Improvement Reinforces Bullish Narratives Despite Modest Revenue Outlook

SkyWest (SKYW) has just wrapped up FY 2025 with fourth quarter revenue of US$1.0 billion and basic EPS of US$2.28, supported by net income of US$91.2 million. The company has seen revenue move from US$944.4 million and EPS of US$2.42 in Q4 2024 to US$1.0 billion and EPS of US$2.28 in Q4 2025, while trailing twelve month revenue reached US$4.1 billion and EPS came in at US$10.62. With net profit margins improving to 10.6% over the past year, investors may focus on how these results shape the reward side of the story through firmer profitability and a solid earnings base.

See our full analysis for SkyWest.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the dominant narratives around SkyWest, and where the latest figures might challenge what the market thinks it knows.

Curious how numbers become stories that shape markets? Explore Community Narratives

10.6% Net Margin Pairs With 32.6% Earnings Growth

• Over the last 12 months, SkyWest produced net profit margins of 10.6% and earnings growth of 32.6%, while trailing twelve month revenue reached about US$4.1b and net income was US$428.3 million. The business is currently combining double digit profitability with double digit earnings expansion on a revenue base above US$4.0b.
• What stands out for the bullish view is how this profit profile lines up with the current growth outlook, with earnings modeled at about 7.7% a year and revenue at roughly 4.5% a year, which
  • heavily supports optimistic arguments that SkyWest is not just profitable on paper but is earning US$428.3 million over the last twelve months after producing US$4.1b of revenue at a 10.6% margin
  • also reminds bulls that the 32.6% past earnings growth rate is higher than the 7.7% forward figure, so any optimistic case needs to account for a slower growth profile than the recent twelve month period.

To see how these profit trends fit into the wider debate around SkyWest's future growth story, check out the full narrative investors are talking about. 📊 Read the full SkyWest Consensus Narrative.

P/E Of 9x And DCF Fair Value Of US$207.25

• SkyWest is trading at a P/E of 9x compared with a Global Airlines industry average of 9.3x and a peer average of 39.4x, while the DCF fair value supplied is US$207.25 against a current share price of US$96.52. The stock therefore sits below both the peer valuation range and this DCF benchmark.
• Supporters of the bullish narrative often point to this valuation gap as a core part of their case, and the figures here give them concrete numbers to reference, which
  • backs the idea that the market is pricing SkyWest at a discount, given the share price of US$96.52 is materially below the US$207.25 DCF fair value and the peer P/E of 39.4x
  • also leaves room for a more cautious take, because the small difference between SkyWest’s 9x P/E and the 9.3x industry average means the bigger gap is really versus higher multiple peers rather than the sector as a whole.

High Debt And Recent Insider Selling

• The risk summary flags a high level of debt on the balance sheet and significant insider selling over the past three months. Alongside the US$428.3 million of trailing twelve month net income and 10.6% margin, there are balance sheet and governance watchpoints for investors to track.
• Critics taking a more bearish stance often focus on those two issues, and the data here gives that view specific hooks, which
  • supports the cautious angle that leverage could matter even with US$4.1b of trailing twelve month revenue, because the company is carrying what is described as a high debt load
  • adds another concern via the recent insider selling label, as some bears may use that activity alongside the debt commentary to argue for a wider risk discount despite solid net income and margins.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on SkyWest's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

SkyWest’s solid margins sit alongside high debt levels and recent insider selling, which together raise questions about balance sheet strength and alignment with shareholders.

If that mix makes you cautious, use solid balance sheet and fundamentals stocks screener (390 results) to quickly focus on companies with cleaner finances, lower leverage and balance sheets built to handle tougher conditions.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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