Contrasting Azul (AZUL) and Spirit Airlines (SAVE)

Spirit Airlines (NASDAQ: SAVE) and Azul (NYSE:AZUL) are both mid-cap transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Institutional & Insider Ownership

4.6% of Azul shares are owned by institutional investors. 0.3% of Spirit Airlines shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Spirit Airlines and Azul’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Spirit Airlines $2.32 billion 1.26 $264.87 million $3.15 13.40
Azul $1.91 billion 4.18 -$36.21 million N/A N/A

Spirit Airlines has higher revenue and earnings than Azul.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Spirit Airlines and Azul, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spirit Airlines 1 8 4 0 2.23
Azul 0 0 4 0 3.00

Spirit Airlines currently has a consensus target price of $41.75, indicating a potential downside of 1.07%. Azul has a consensus target price of $33.00, indicating a potential upside of 32.53%. Given Azul’s stronger consensus rating and higher probable upside, analysts clearly believe Azul is more favorable than Spirit Airlines.

Profitability

This table compares Spirit Airlines and Azul’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Spirit Airlines 8.55% 15.86% 6.62%
Azul N/A N/A N/A

Summary

Spirit Airlines beats Azul on 6 of the 10 factors compared between the two stocks.

Spirit Airlines Company Profile

Spirit Airlines, Inc. is an airline company. The Company provides air transportation for passengers. As of December 31, 2016, its all-Airbus Fit Fleet operated over 420 daily flights to 59 destinations in the United States, Caribbean and Latin America. As of December 31, 2016, it had a fleet of 95 Airbus single-aisle aircraft, which are referred to as A320 family aircraft and include the A319, A320 and A321 models, which have common design and equipment but differ most notably in fuselage length, service range and seat capacity. As of December 31, 2016, its fleet consisted of 29 A319s, 45 A320ceos, five A320neos and 16 A321ceos. Its Bare Fares offerings are unbundled base fares that remove components included in the price of an airline ticket. It also offers Frill Control, which allows customers to pay only for the options they choose, such as bags, advance seat assignments and refreshments. As of December 31, 2016, its route network included 200 markets served by 59 airports.

Azul Company Profile

Azul SA is a Brazil-based company engaged in the provision of passenger transportation services. The Company primarily acts as an airline operator under the Azul brand name. The Company provides scheduled flights between numerous cities in Brazil, including Sao Paulo, Brasilia, Rio de Janeiro, Belo Horizonte, Porto Alegre, Curitiba, Manaus, Cuiaba, Fortaleza and Salvador, among others. In addition, its air network comprises international routes to the Unites States, Europe and other Latin American countries. The Company also offers Azul Cargo Express, a scheduled cargo transport service with airport-to-airport and door-to-door delivery. It owns a number of subsidiaries, such as Azul Linhas Aereas Brasileiras SA and Tudo Azul SA.

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