Critical Survey: Spirit Airlines (SAVE) versus Gol Linhas Aereas Inteligentes (GOL)
Spirit Airlines (NASDAQ: SAVE) and Gol Linhas Aereas Inteligentes (NYSE:GOL) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.
Risk & Volatility
Spirit Airlines has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Gol Linhas Aereas Inteligentes has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500.
Institutional & Insider Ownership
97.0% of Spirit Airlines shares are owned by institutional investors. Comparatively, 0.0% of Gol Linhas Aereas Inteligentes shares are owned by institutional investors. 0.3% of Spirit Airlines shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Spirit Airlines and Gol Linhas Aereas Inteligentes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Gol Linhas Aereas Inteligentes||-2.70%||-9.77%||-3.27%|
Earnings and Valuation
This table compares Spirit Airlines and Gol Linhas Aereas Inteligentes’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Spirit Airlines||$2.49 billion||0.97||$509.32 million||$3.45||10.04|
|Gol Linhas Aereas Inteligentes||$3.12 billion||0.54||$346.84 million||($1.20)||-20.42|
Spirit Airlines has higher revenue, but lower earnings than Gol Linhas Aereas Inteligentes. Gol Linhas Aereas Inteligentes is trading at a lower price-to-earnings ratio than Spirit Airlines, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for Spirit Airlines and Gol Linhas Aereas Inteligentes, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Gol Linhas Aereas Inteligentes||0||2||2||0||2.50|
Spirit Airlines presently has a consensus price target of $47.40, suggesting a potential upside of 36.80%. Gol Linhas Aereas Inteligentes has a consensus price target of $21.25, suggesting a potential downside of 12.91%. Given Spirit Airlines’ higher probable upside, equities research analysts clearly believe Spirit Airlines is more favorable than Gol Linhas Aereas Inteligentes.
Spirit Airlines beats Gol Linhas Aereas Inteligentes on 10 of the 14 factors compared between the two stocks.
About Spirit Airlines
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.
About Gol Linhas Aereas Inteligentes
Gol Linhas Aereas Inteligentes SA is a Brazil-based airline company. The Company focuses on carrying passengers to over 60 destinations, approximately 50 in Brazil and 10 in South America and the Caribbean. The Company’s fleet includes approximately 120 Boeing 737 aircrafts. The Company operates through two segments: Air transportation and Loyalty program. The Air transportation segment operations originate from its subsidiary Gol Linhas Aereas SA (GLA) for the provision of air transportation services. Its operations also include cargo operations and excess baggage. The Loyalty program segment operations are represented by SMILES coalition loyalty program, which enables clients to accumulate miles and redeem tickets for more than 700 locations worldwide.
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