It's been a pretty great week for Frontier Group Holdings, Inc. (NASDAQ:ULCC) shareholders, with its shares surging 10% to US$3.52 in the week since its latest quarterly results. It was a respectable set of results; while revenues of US$912m were in line with analyst predictions, statutory losses were 13% smaller than expected, with Frontier Group Holdings losing US$0.19 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
We've discovered 3 warning signs about Frontier Group Holdings. View them for free.
Following last week's earnings report, Frontier Group Holdings' ten analysts are forecasting 2025 revenues to be US$3.80b, approximately in line with the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.24 per share in 2025. Before this earnings report, the analysts had been forecasting revenues of US$4.03b and earnings per share (EPS) of US$0.25 in 2025. The analysts have made an abrupt about-face on Frontier Group Holdings, administering a minor downgrade to to revenue forecasts and slashing the earnings outlook from a profit to loss.
View our latest analysis for Frontier Group Holdings
The average price target was broadly unchanged at US$4.83, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Frontier Group Holdings analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$3.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.8% by the end of 2025. This indicates a significant reduction from annual growth of 11% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.8% annually for the foreseeable future. It's pretty clear that Frontier Group Holdings' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Frontier Group Holdings dropped from profits to a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$4.83, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Frontier Group Holdings analysts - going out to 2027, and you can see them free on our platform here.
You still need to take note of risks, for example - Frontier Group Holdings has 3 warning signs (and 1 which can't be ignored) we think you should know about.
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