Spirit Airlines Stock Is Trading At An Attractive Price

Spirit Airlines Stock Is Trading At An Attractive Price

KIEV, UKRAINE - 2019/06/08: In this photo illustration the Spirit Airlines logo is seen displayed on ... [+] a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)



LightRocket via Getty Images

The shares of Spirit Airlines (NYSE: SAVE) have gained 48% in the past month triggered by the likelihood of a quick recovery in air travel demand. We believe that there is a sizable upside in SAVE stock, which has lost 36% of its value since the beginning of the year and currently trades at $26. The company observed $130 million of operating cash outflow for the first nine months primarily supported by the $300 million grant under the CARES Act. Considering a $2 million of average daily cash burn rate, the company's net debt is likely to increase by another $180 million during the fourth quarter. Therefore, the $1.7 billion drop in the company's market capitalization looks unwarranted given the positive vaccine results released by Pfizer and Moderna. Our interactive dashboard highlights Spirit Airlines stock performance during the current crisis with that during the 2008 recession.

2020 Coronavirus Crisis

Timeline of 2020 Crisis So Far:



12/12/2019: Coronavirus cases first reported