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Spirit Airlines - AI Stock Analysis

Analysis generated January 24, 2025

Spirit Airlines, Inc. (NYSE: SAVE) is a low-cost carrier serving the United States, Latin America, and the Caribbean. Known for its "ultra-low-cost" business model, Spirit Airlines offers lower base fares but charges for optional services such as seat assignments, baggage, and refreshments. This strategy has allowed the airline to be one of the most competitive in terms of pricing. However, the company faces challenges such as high operational costs, fluctuating fuel prices, and stiff competition from legacy carriers and other low-cost airlines.

Fundamental Analysis

Revenue: Spirit Airlines reported revenue of $1.19 billion in the last quarter. This is a decrease of 7.80% compared to the previous quarter and a decrease of 2.78% compared to the same quarter last year. The declining revenue on both a quarterly and yearly basis indicates financial stress, which is concerning for investors.

Net Income: The net income for Spirit Airlines in the last quarter was $308 million, a sharp decline of 59.77% from the previous quarter and a steep 95.65% decrease from the same quarter last year. Such drastic reductions in net income are alarming as they reflect diminished profitability and operational challenges.

EBITDA: The EBITDA for the last quarter stood at $285 million, marking a decrease of 102.23% from the previous quarter and a 66.80% decline from the same quarter last year. The negative growth in EBITDA highlights severe financial challenges and raises red flags about the company's operational efficiency.

Insider Selling: Recent insider selling activity adds another layer of concern. Insiders selling their stock may indicate a lack of confidence in the company's future performance.

Technical Analysis

The current stock price of Spirit Airlines is $1.08. This figure has not changed from a month ago, suggesting short-term stability. Nevertheless, over the past year, the stock price has plummeted by 84.81%, a troubling sign for long-term investors.

Simple Moving Average (SMA): The SMA10 of $1.08, which is unchanged, indicates no significant movement in the trend. This neutrality may point to market participants awaiting further news or data before making any decisive moves.

Relative Strength Index (RSI): The RSI is currently at 49.3, suggesting that the stock is neither overbought nor oversold. This neutral condition, combined with a stable SMA, indicates a waiting period for potential investors.

Alternative Data Analysis

Job Postings and Employee Sentiment: Spirit Airlines has 11 open positions, a decrease of 66% in the last couple of months. This significant reduction in job postings could be a strategy to cut costs, but it's not a positive sign for growth. Moreover, only 41% of employees have a positive outlook on the company's future, a deeply worrying signal.

Customer Acquisition: The company has an estimated 13 million visitors to its webpage, up by 6% in the last couple of months. This increase indicates a potential rise in customer interest. However, the number of users downloading their mobile apps has declined by 41%, which could indicate a loss in customer engagement.

Customer Engagement: On social media, Spirit Airlines has 190,000 followers on Instagram and 130,000 followers on Twitter. While the Instagram following has seen no meaningful change, the Twitter following has decreased by 1%, indicating a slight decline in public interest.

AI Score: AltIndex's AI score for Spirit Airlines is 20, which is a strong sell signal. The AI score takes into account fundamental, technical, and alternative data analyses to provide a comprehensive evaluation.

Conclusion and Recommendation

Spirit Airlines faces multiple challenges across various metrics, including declining revenue, net income, and EBITDA. The recent drop in job postings and low employee sentiment further exacerbate these concerns. Though the website traffic shows a bullish trend, the decreasing number of app downloads and social media engagement indicate mixed customer acquisition and engagement metrics. The technical analysis reveals a neutral trend, but the long-term stock price performance is concerning. Lastly, the AI score strongly suggests selling the stock.

Based on the holistic assessment, it appears that Spirit Airlines is currently facing substantial operational and financial hurdles. Potential investors may want to exercise caution and perhaps consider alternative investment opportunities with a better outlook.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.