Spirit Airlines Is Crashing: Is It Still a Buy for Long-Term Investors?
After a strong run in its first several years as a public company, Spirit Airlines (NASDAQ: SAVE) has disappointed investors again and again since 2015. Yet while profitability has been receding, the carrier continued to exceed its long-term goal of generating "mid-teens or higher operating margins" -- until now.
Unfortunately, a damaging dispute with its pilots and an industry price war sparked by United Continental (NYSE: UAL) have undermined Spirit Airlines' margin performance recently. Let's take a look at what this means for the company's long-term prospects.
For most of the past three years, Spirit Airlines has faced severe unit revenue pressure, as rivals have become more aggressive about matching its low fares. Nevertheless, its adjusted operating margin peaked in 2015 at 23.7%, thanks to the benefit of lower fuel prices.
Source: Fool.com
United Continental Holdings Stock
The stock is one of the favorites of our community with 24 Buy predictions and 2 Sell predictions.
As a result the target price of 66 € shows a positive potential of 37.64% compared to the current price of 47.95 € for United Continental Holdings.
