They say the sky's the limit, and for Mesa Air Group (MESA), a key player in the industrials sector and passenger airlines industry, this might just be the case. Despite a challenging fiscal year ending in September, marked by a significant decrease in cash flow from $61M to $36.1M and a profit margin loss of 24%, the company's stock shows potential for growth. With an analyst highest estimated target price of $2.22 and a Wall Street target price of $2, the current market capitalization of $35.5M suggests there's room for expansion. Despite the turbulence, Mesa Air Group may be ready to take off this April. Mesa Air Group's stock appears to be lagging behind Marten Transport, which saw a modest 0.05% increase today. Despite the tendency of traders to overanalyze competition within the passenger airlines sector, it's prudent to consider both Mesa Air and Marten Transport as potential short-term investments. We will examine the competitive aspects of both companies.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Mesa or Sun is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is Mesa Air's Liquidity
Mesa Air
financial leverage refers to using borrowed capital as a funding source to finance Mesa Air Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Mesa Air financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Mesa Air's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Mesa Air's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Mesa Air's total debt and its cash.
Correlation Between Mesa and Sun Country Airlines
In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Mesa Air together with similar or unrelated positions with a negative correlation. For example, you can also add Sun Country to your portfolio. If Sun Country is not perfectly correlated to Mesa Air it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Mesa Air, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Mesa Air and Sun Country in your portfolio? Please note if you are using this as a pair-trade strategy between Mesa Air and Sun Country, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between MESA and SNCY for more information.
Another Deeper Perspective
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include products or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Let me take a closer look at Mesa Air revenue. Based on the latest financial disclosure, Mesa Air Group reported 498.06
M of revenue. This is 85.76% lower than that of the Passenger Airlines sector and 96.77% lower than that of the
Industrials industry.
The revenue for all United States stocks is 94.72% higher than that of Mesa Air. As for Marten Transport we see revenue of 1.13
B, which is 92.67% lower than that of the Industrials
| MESA | 498.06 Million | 9.71 |
| Sector | 3.5 Billion | 68.22 |
| MRTN | 1.13 Billion | 22.06 |
As Warren Buffet once wisely noted, be fearful when others are greedy and greedy when others are fearful. This sentiment rings true when considering the potential of Mesa Air Group (MESA) in the coming month. Despite a challenging operating margin of -0.15 and a quarterly revenue growth of -0.09, the airline industry player has a Wall Street target price of $2, significantly higher than its current typical day price of $0.87. Furthermore, with a current valuation of $543.58M and a market capitalization of $35.5M, there is a clear disparity that could signal an undervalued stock. However, investors should tread carefully, as the company's probability of bankruptcy stands at a concerning 52.03%. .
Will Mesa continue to rise?
Mesa Air Group's Market Risk Adjusted Performance has slightly increased to 0.03, indicating a minor improvement in
risk-adjusted returns. However, investors should be cautious as the stock price may face another downturn. Despite some resilience, it's uncertain if Mesa can maintain this upward trend amidst potential market volatility. The company's
future performance will be key in determining its trajectory. Mesa Air Group, potentially a penny stock, exhibits above-average volatility. While it may be a viable investment, penny stocks are often speculative and prone to artificial price hype. Investors should fully understand the risks and potential rewards of investing in Mesa Air Group. We advise checking for signals like unreported promotions, sudden news releases, or email spam. Also, research the backgrounds of current and past company officers before investing in high volatility instruments or penny stocks.
While it's possible to profit from Mesa, remember that artificially hyped penny stocks often cannot sustain their increased share price for long. The only way to enhance shareholder value is through legitimate performance supported by solid fundamentals. In conclusion, while Mesa Air Group's (MESA) current price rise may seem appealing, investors should exercise caution. The company's valuation market value and hype value both stand at
0.87, significantly lower than its real value of
1.12. This discrepancy suggests that the stock's price may not be sustainable. Furthermore, the analyst overall consensus rates MESA as a 'Strong Sell', with a possible downside price of 0.0087. The highest estimated target price is 2.22, but the lowest is 1.82, indicating potential volatility. Therefore, despite the possible upside price of 9.36, the current price rise may not be trustworthy, and investors should consider these factors before making a decision. .
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Mesa Air Group. Please refer to our
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