Frontier Group Holdings, Inc., a low-fare airline service provider in the United States and Latin America, has recently attracted attention from institutional investors.
Ballentine Partners LLC acquired a stake in the company valued at approximately $55,000 in the third quarter, while Vanguard Personalized Indexing Management LLC made a similar move in the second quarter, investing around $58,000.
Frontier Group operates a fleet of 136 Airbus single-aisle aircraft and primarily sells its services through direct channels. Despite challenges faced by the airline industry, Frontier Group's focus on low fares has allowed it to maintain a steady revenue stream, with a reported revenue of $935 million for the last quarter, marking a 5.9% increase compared to the same period last year.
The stock of Frontier Group (NASDAQ: ULCC) has garnered mixed reviews from analysts, with a consensus rating of "Hold." UBS Group recently initiated coverage with a "neutral" rating and set a price target of $6.00. Other analysts have varied in their assessments; for instance, Barclays raised its price target from $7.00 to $10.00, while Bank of America lowered its target from $5.50 to $5.00.
As of the latest trading session, shares of Frontier Group opened at $5.75, reflecting a market capitalization of approximately $1.30 billion. The stock has experienced a twelve-month low of $2.79 and a high of $8.33. The company's financial metrics reveal a current ratio of 0.53 and a quick ratio of 0.48, indicating potential liquidity challenges. Additionally, a debt-to-equity ratio of 0.57 suggests a moderate level of leverage.
Frontier Group's recent earnings report showed a loss of $0.05 per share, falling short of the consensus estimate of a $0.02 loss. The company’s revenue for the quarter was also below expectations, coming in at $935 million against a forecast of $943.3 million.
In a notable insider transaction, Senior Vice President Steve Schuller sold 10,000 shares at an average price of $6.00, totaling $60,000. Following this sale, Schuller retains ownership of 34,035 shares, valued at approximately $204,210. Corporate insiders currently hold 81.50% of the company's stock.
Recent movements by hedge funds and institutional investors further illustrate the shifting landscape for Frontier Group. Blue Trust Inc. entered a new position in the airline during the second quarter, investing about $45,000. nVerses Capital LLC significantly increased its stake by 152.5%, acquiring an additional 6,100 shares to bring its total to 10,100 shares, valued at $50,000. Victory Capital Management Inc. also made a new investment in the third quarter, amounting to approximately $54,000.
These changes in institutional holdings suggest cautious optimism among investors regarding Frontier Group's potential for recovery and growth. However, the overall sentiment remains tempered, as analysts continue to express concerns about the airline's ability to navigate the complexities of the current market environment. The stock's trajectory will likely depend on broader economic conditions and the company's strategic responses to ongoing challenges.