Mesa Air Group (MESA) has seen a slight dip of 2% even as the broader market moves upward, raising questions about its current valuation. With a Price to Earnings ratio of just 1.46X and a Price to Book ratio of 0.34X, the stock appears undervalued compared to its peers in the airline industry. However, the company is grappling with a return on assets of -0.02 and significant total debt of
541.01M, which may deter some investors. As the fiscal year wraps up in September, potential buyers might find this dip an intriguing opportunity, especially given the revenue per share of
11.72 and a current asset level of
150.29M.
Important Takeaways
Mesa Air Group has a Beta of 1.22, indicating it carries a higher risk compared to the overall market. This means that when the market rises, Mesa Air is likely to perform better, but in a downturn, it may struggle more than the market. Currently, the stock has a negative expected return of -0.46%.
Before making any investment decisions, it's wise to check Mesa Air's maximum drawdown, skewness, and typical daily price. Additionally, understanding the relationship between downside variance and daily balance of power can provide insights into whether Mesa Air's past performance might repeat in the near future.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Mesa Air income statement, its balance sheet, and the statement of cash flows. Potential Mesa Air investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Mesa Air investors may use each financial statement separately, they are all related. The changes in Mesa Air's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Mesa Air's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Mesa Air
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Mesa Air performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Mesa Air shares is the value that is considered the true value of the share. If
the intrinsic value of Mesa is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Mesa Air. Please read more on our
fundamental analysis page.
Watch out for price decline
Please consider monitoring Mesa Air on a daily basis if you are holding a position in it. Mesa Air is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion.
Most exchanges require public instruments, such as Mesa Air stock to be traded above the $1 level to remain listed. If Mesa Air stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How effective is Mesa Air in utilizing its assets?
Mesa Air Group reports assets on its Balance Sheet. It represents the amount of Mesa resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Mesa Air aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Passenger Airlines space. To get a better handle on how balance sheet or income statements item affect Mesa volatility, please check the breakdown of all its
fundamentals.
Are Mesa Air Earnings Expected to grow?
The
future earnings power of Mesa Air involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Mesa Air factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Mesa Air
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Mesa
expected earnings.
Mesa Air Gross Profit
Mesa Air Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Mesa Air previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Mesa Air Gross Profit growth over the last 10 years. Please check Mesa Air's
gross profit and other
fundamental indicators for more details.
Another Deeper Perspective
Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Mesa Air is not uncomon. Institutional investors typically avoid acquiring a high percentage of Mesa Air stocks because performing such an act may violate securities laws. They are usually not investing their own money, but rather making investments on behalf of their clients. Let's take a look at how the ownership of Mesa is distributed among investors.
Ownership Allocation
Mesa Air Group maintains a total of 41.31 Million
outstanding shares. Mesa Air Group holds significant amount of outstanding shares owned by
insiders. An
insider is usually defined as a CEO, other corporate executive, director, or
institutional investor who own at least 10% of the company's outstanding shares. Please note that no matter how many assets the company has, if the real value of the firm is less than the current market value, you may not be able to make money on it.
| Retail Investors65.96% | Insiders21.68% | Institutions12.36% |
| Retail Investors | 65.96 |
| Insiders | 21.68 |
| Institutions | 12.36 |
Please be aware that individual investors typically purchase shares for their personal accounts and usually in smaller quantities compared to institutional investors. While they might influence Mesa Air's decisions if they own a significant combined portion of its shares, such influence is relatively rare. Conversely, institutional investors - like mutual funds, pension funds, hedge funds, and other investment companies - often have a substantial sway over Mesa Air's decisions due to their larger holdings.
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Mesa Air has an asset utilization ratio of 55.43 percent. This suggests that the Company is making $0.55 for each dollar of assets. An increasing asset utilization means that Mesa Air Group is more efficient with each dollar of assets it utilizes for everyday operations.
| Non Current Assets Total664.3 M | | | | | Net Tangible Assets324.8 M | |
| Non Current Assets Total | 664.31 Million | 49.62 |
| Non Currrent Assets Other | 15.73 Million | 1.18 |
| Other Current Assets | 2.37 Million | 0.18 |
| Total Current Assets | 219.76 Million | 16.42 |
| Intangible Assets | 3.28 Million | 0.25 |
| Net Tangible Assets | 324.77 Million | 24.26 |
| Other Assets | 108.56 Million | 8.11 |
In investing, it's often said that the market is a voting machine in the short term but a weighing machine in the long run. Mesa Air Group (MESA) has recently seen a 2% decline in its stock price, despite broader market gains. The company is facing significant challenges, with a net income loss of 120.1 million and total debt reaching 541.01 million, which raises concerns about its financial health. However, it has a market capitalization of only 52.05 million, suggesting potential undervaluation, especially with a price-to-sales ratio of just 0.11. With a target price of 2 and potential upside of 10.49%, some investors may view this dip as a buying opportunity, provided they are willing to accept the risks associated with its current financial state.
Our Mesa analysis suggests possible reversion in October
Mesa Air Group's stock has seen a sharp decline, with a maximum drop of 52.56% from its peak. This steep fall raises concerns about whether the stock can bounce back. However, there are indications that Mesa might be on the verge of a recovery this October. Investors should pay attention, as a return to better price levels could offer a unique chance for those looking to take advantage of its price swings. The stock is currently showing above-average volatility, which can help investors time their moves.
Understanding how this volatility interacts with market trends is crucial, especially during downturns when prices drop and investors often feel pressured to adjust their portfolios.Despite a generally positive market atmosphere, Mesa Air Group's stock has experienced a decline of over 2%. This downturn is particularly noteworthy given the analyst consensus, which leans heavily towards a "Strong Sell" rating. With a current market value estimated at
1.23, the stock is far below the analyst's highest target price of
2.22, suggesting a significant gap between current performance and potential upside. Investors should tread carefully, as the valuation metrics indicate a possible downside price of
0.0123, raising concerns about the stock's stability. As the fiscal year ends in September, it may be wise to keep a close eye on upcoming developments before making any investment decisions..
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
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 Raphi Shpitalnik do not own shares of Mesa Air Group. Please refer to our
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