Controladora Vuela Compania de Aviacion (NYSE:VLRS) Shares Gap Down - Here's Why

Key Points

• VLRS shares fell sharply at the open, dropping from a $7.14 close to $6.92 and last trading near $6.93.
• Analyst sentiment remains mixed: the stock has an average “Hold” rating and a $9.42 consensus price target, though UBS raised its target to $11 while other firms lowered theirs.
• The company reported a quarterly loss of $1.11 per share, slightly worse than estimates, despite revenue of $859 million exceeding expectations. Analysts forecast a full-year loss of $2.19 per share.

Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (NYSE:VLRS - Get Free Report)'s share price gapped down before the market opened on Friday . The stock had previously closed at $7.14, but opened at $6.92. Controladora Vuela Compania de Aviacion shares last traded at $6.93, with a volume of 20,977 shares traded.

Wall Street Analysts Forecast Growth

A number of brokerages have weighed in on VLRS. UBS Group upped their price target on Controladora Vuela Compania de Aviacion from $9.00 to $11.00 and gave the company a "buy" rating in a research report on Wednesday, August 5th. Weiss Ratings cut Controladora Vuela Compania de Aviacion from a "sell (d)" rating to a "sell (e+)" rating in a report on Friday, July 31st. Barclays reduced their target price on shares of Controladora Vuela Compania de Aviacion from $10.00 to $9.00 and set an "overweight" rating on the stock in a research note on Thursday, April 30th. The Goldman Sachs Group lowered their target price on shares of Controladora Vuela Compania de Aviacion from $8.60 to $7.70 and set a "neutral" rating on the stock in a report on Tuesday, August 11th. Finally, JPMorgan Chase & Co. dropped their target price on shares of Controladora Vuela Compania de Aviacion from $10.50 to $9.50 and set a "neutral" rating for the company in a research report on Friday, June 12th. Four research analysts have rated the stock with a Buy rating, five have given a Hold rating and two have given a Sell rating to the company. According to MarketBeat, the stock currently has an average rating of "Hold" and an average target price of $9.42.

Controladora Vuela Compania de Aviacion Price Performance

The stock has a fifty day moving average of $8.30 and a 200-day moving average of $8.05. The firm has a market capitalization of $805.69 million, a P/E ratio of -4.21 and a beta of 1.72. The company has a quick ratio of 0.64, a current ratio of 0.64 and a debt-to-equity ratio of 6.78.

Controladora Vuela Compania de Aviacion (NYSE:VLRS - Get Free Report) last issued its quarterly earnings data on Wednesday, July 22nd. The transportation company reported ($1.11) EPS for the quarter, missing analysts' consensus estimates of ($1.08) by ($0.03). The company had revenue of $859.00 million for the quarter, compared to the consensus estimate of $854.70 million. Controladora Vuela Compania de Aviacion had a negative return on equity of 93.91% and a negative net margin of 5.71%. Equities analysts predict that Controladora Vuela Compania de Aviacion, S.A.B. de C.V. will post -2.19 EPS for the current fiscal year.

Insider Activity at Controladora Vuela Compania de Aviacion

In other news, Director William Dean Donovan sold 50,000 shares of the stock in a transaction that occurred on Wednesday, May 27th. The shares were sold at an average price of $7.54, for a total transaction of $377,000.00. Following the sale, the director directly owned 2,946,050 shares of the company's stock, valued at $22,213,217. This represents a 1.67% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. 2.51% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Large investors have recently bought and sold shares of the company. Diversify Wealth Management LLC acquired a new position in shares of Controladora Vuela Compania de Aviacion during the first quarter valued at $1,279,000. UBS Group AG increased its position in Controladora Vuela Compania de Aviacion by 108.5% in the fourth quarter. UBS Group AG now owns 432,989 shares of the transportation company's stock worth $3,845,000 after purchasing an additional 225,336 shares during the period. Empowered Funds LLC bought a new stake in Controladora Vuela Compania de Aviacion during the 1st quarter worth about $1,103,000. M&T Bank Corp bought a new stake in Controladora Vuela Compania de Aviacion during the 4th quarter worth about $1,219,000. Finally, Dorsey Wright & Associates bought a new stake in Controladora Vuela Compania de Aviacion during the 1st quarter worth about $1,840,000. Institutional investors and hedge funds own 53.32% of the company's stock.

About Controladora Vuela Compania de Aviacion

Controladora Vuela Compañia de Aviacion, SAB de CV NYSE: VLRS is a Mexico-based airline holding company whose primary business is the operation of low-cost scheduled air transportation services. Through its principal operating subsidiary, Volaris, the company provides passenger and cargo flights on domestic and international routes. Its business model emphasizes unbundled ancillary services and point-to-point operations designed to offer competitive fares across its network.

Volaris serves more than 120 routes linking major metropolitan areas and secondary cities in Mexico, the United States and Central America.

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