Breaking Down Sun Country Airlines Holdings, Inc. (SNCY) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on Sun Country Airlines Holdings, Inc. (SNCY) and wondering about its financial stability? Did you know that in 2024, Sun Country reported a record total revenue of $1.08 billion and an adjusted operating income margin of 10.4%? With a total liquidity of $205.6 million as of December 31, 2024, and strategic moves like adding a new C-tranche to their 2019-1 EETC, potentially saving approximately $0.8 million in interest expense in 2025, how well-positioned is Sun Country for future growth and profitability? Let's delve deeper into the key financial insights that can help you assess SNCY's financial health and make informed investment decisions.

Sun Country Airlines Holdings, Inc. (SNCY) Revenue Analysis

Understanding where Sun Country Airlines Holdings, Inc. (SNCY) generates its revenue is crucial for investors. A detailed look into the airline's revenue streams provides insights into its financial stability and growth potential. Let's break down the key components.

Sun Country Airlines Holdings, Inc.'s revenue is derived from several primary sources:

• Passenger Revenue: This includes revenue generated from the sale of airline tickets.
• Ancillary Revenue: This incorporates revenue from services such as baggage fees, seat upgrades, and onboard sales.
• Cargo Revenue: Revenue earned from transporting cargo.
• Other Revenue: This may include revenue from charter flights and other miscellaneous sources.

Analyzing the year-over-year revenue growth rate provides a clear picture of the company's performance. For the fiscal year 2023, Sun Country Airlines Holdings, Inc. reported a total operating revenue of $1.07 billion, which represents an increase of 14.7% compared to the $936.5 million reported in 2022. This growth indicates a positive trend in the company's financial performance.

Here’s a more detailed look at the revenue components for the fiscal year 2023:

• Passenger Revenue: $836.72 million in 2023, up from $733.41 million in 2022.
• Ancillary Revenue: $148.49 million in 2023, compared to $126.38 million in 2022.
• Cargo Revenue: $62.93 million in 2023, slightly down from $63.18 million in 2022.
• Other Revenue: $21.86 million in 2023, up from $13.53 million in 2022.

To provide a clearer picture, here is a table summarizing Sun Country Airlines Holdings, Inc.'s revenue streams for 2022 and 2023:

Passenger revenue consistently contributes the largest portion to the overall revenue. In 2023, passenger revenue accounted for approximately 78.2% of the total revenue. Ancillary revenue is the second largest contributor, making up about 13.9% of the total revenue. Cargo revenue and other revenue streams contribute smaller percentages.

Significant changes in revenue streams can indicate shifts in the company's strategic focus or market conditions. The notable increase in passenger and ancillary revenue in 2023 suggests a strong demand for air travel and the effectiveness of Sun Country Airlines Holdings, Inc.'s ancillary service offerings. The slight decrease in cargo revenue is not significant but could be monitored for future trends.

For more insights into the investors and ownership structure of Sun Country Airlines Holdings, Inc., check out: Exploring Sun Country Airlines Holdings, Inc. (SNCY) Investor Profile: Who’s Buying and Why?

Sun Country Airlines Holdings, Inc. (SNCY) Profitability Metrics

Understanding the profitability of Sun Country Airlines Holdings, Inc. (SNCY) requires a detailed look at its financial performance, specifically its gross profit, operating profit, and net profit margins. These metrics provide insights into the company's efficiency in managing costs and generating profits from its revenue.

For the full year 2024, Sun Country Airlines reported a total revenue of $1.08 billion, marking their highest full year on record. This financial achievement underscores the company's successful business strategies and operational execution.

Gross Profit: Gross profit is the revenue left over after deducting the cost of goods sold (COGS). It indicates how efficiently a company manages its production costs. For Sun Country Airlines, the gross profit for the year 2024 was $246.378 million. The gross margin, which is gross profit divided by total revenue, stood at 31.73% for the trailing twelve months (TTM).

Operating Profit: Operating profit (or operating income) is calculated by deducting operating expenses from gross profit. It reflects the profitability of a company's core business operations before interest and taxes. Sun Country Airlines reported a GAAP operating income of $26.1 million for the fourth quarter of 2024, resulting in an operating income margin of 10.0%. For the full year 2024, the operating income margin was 9.9%.

Net Profit: Net profit (or net income) is what remains after all expenses, including interest, taxes, and other non-operating expenses, are subtracted from revenue. It represents the actual profit the company earns for its shareholders. Sun Country Airlines' net income for 2024 was $52.903 million, a decrease from $72.181 million in 2023. The net profit margin for the TTM is 4.92%.

Here is a summary of Sun Country Airlines' profitability metrics:

Trends in Profitability Over Time: Examining the trends in profitability over several periods provides a clearer picture of the company's financial health. While specific historical data for each quarter isn't detailed, Sun Country Airlines has shown consistent profitability. For example, Q4 2024 marked the tenth consecutive quarter of profitability. The full year 2024 also marked the fourth consecutive year of profitability.

Comparison with Industry Averages: Comparing Sun Country Airlines' profitability ratios with industry averages helps to benchmark its performance. The airline industry is competitive, and margins can vary significantly based on factors like fuel costs, route network, and operational efficiency. While specific industry averages fluctuate, Sun Country aims to maintain margins at or near the top of the industry.

Analysis of Operational Efficiency: Operational efficiency is critical for maintaining and improving profitability. Sun Country Airlines focuses on cost management and flexibility across its Scheduled Service, Charter, and Cargo operations. In the second quarter of 2024, Sun Country demonstrated excellent cost management, with CASM (Cost per Available Seat Mile) falling 5.1% and adjusted CASM falling 4.9% year-over-year. In Q4 2024, cargo revenue grew by 13.1% to $28.6 million, despite a 2.5% decrease in cargo block hours. This was driven by rate changes in the Amazon agreement and annual rate adjustments.

Strategic initiatives such as adjusting capacity to match demand and growing the cargo segment contribute to strong financial results. For example, Sun Country reported that total fare for Q4 2024 increased 2.2%, and they foresee positive fare trends continuing.

For additional insights, you can explore: Breaking Down Sun Country Airlines Holdings, Inc. (SNCY) Financial Health: Key Insights for Investors

Sun Country Airlines Holdings, Inc. (SNCY) Debt vs. Equity Structure

Understanding how Sun Country Airlines Holdings, Inc. finances its operations and growth is crucial for investors. This involves analyzing the airline's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity to maintain financial stability and pursue expansion.

As of the end of 2024, Sun Country Airlines Holdings, Inc. reported a total debt of $465.8 million. This includes both short-term and long-term obligations, with long-term debt accounting for $438.9 million and short-term debt at $26.9 million. These figures provide a snapshot of the company's leverage and its reliance on borrowed funds to finance its activities.

The debt-to-equity ratio is a key metric for assessing a company's financial leverage. For Sun Country Airlines Holdings, Inc., the debt-to-equity ratio stands at 1.86. This ratio indicates that the company has $1.86 in debt for every dollar of equity. When compared to the industry average, it's important to consider the capital-intensive nature of the airline industry, where significant investments in aircraft and infrastructure are common.

Recent activities in debt management, such as new debt issuances, credit rating updates, or refinancing efforts, can provide insights into the company's financial strategy and health. For instance, any improvements in credit ratings could lower borrowing costs, while strategic refinancing might extend debt maturities and improve cash flow management.

Sun Country Airlines Holdings, Inc. strategically balances debt financing with equity funding to optimize its capital structure. The decision to use debt or equity depends on various factors, including market conditions, interest rates, and the company's growth plans. Maintaining an optimal balance is vital for ensuring financial flexibility and minimizing the cost of capital.

Airlines often use debt to finance expensive assets like aircraft, while equity can fund operational expansions or cover unforeseen expenses. Here’s a breakdown of Sun Country Airlines Holdings, Inc.'s approach:

• Aircraft Financing: Utilizing debt to acquire and maintain its fleet.
• Operational Expansion: Balancing debt and equity to fund new routes and services.
• Capital Investments: Strategic use of both debt and equity for infrastructure and technology upgrades.

Here is a table summarizing Sun Country Airlines Holdings, Inc.'s debt and equity structure:

Understanding these elements helps investors gauge the financial risk and stability of Sun Country Airlines Holdings, Inc., and make informed decisions.

To delve deeper into who is investing in Sun Country Airlines Holdings, Inc. and the motivations behind their investment decisions, check out: Exploring Sun Country Airlines Holdings, Inc. (SNCY) Investor Profile: Who’s Buying and Why?

Sun Country Airlines Holdings, Inc. (SNCY) Liquidity and Solvency

Liquidity is crucial in assessing a company's ability to meet its short-term obligations. For Sun Country Airlines Holdings, Inc. (SNCY), analyzing key ratios and cash flow trends provides insights into its financial health. Here's an evaluation of SNCY's liquidity position:

Current and Quick Ratios: These ratios measure a company's ability to cover its short-term liabilities with its short-term assets. A higher ratio generally indicates better liquidity.

• The most recent data shows Sun Country Airlines Holdings, Inc. (SNCY) with a current ratio of 0.90 and a quick ratio of 0.87.

Analysis of Working Capital Trends: Monitoring working capital, which is the difference between current assets and current liabilities, helps to understand the operational efficiency and short-term financial health of Sun Country Airlines Holdings, Inc. (SNCY). Declining working capital may indicate potential liquidity issues, while increasing working capital suggests improved short-term financial strength.

• Sun Country Airlines Holdings, Inc. (SNCY) had working capital of $79.548 million as of December 31, 2023.

Cash Flow Statements Overview: Examining the trends in operating, investing, and financing cash flows can reveal a lot about a company's financial stability. Positive operating cash flow indicates that a company can generate enough cash from its core business activities. Here's a brief look:

• Operating Cash Flow: For the year 2023, Sun Country Airlines Holdings, Inc. (SNCY) reported net cash provided by operating activities of $199.12 million.
• Investing Cash Flow: The net cash used for investing activities in 2023 was $140.699 million.
• Financing Cash Flow: Net cash used for financing activities totaled $15.598 million in 2023.

Potential Liquidity Concerns or Strengths:

• Sun Country Airlines Holdings, Inc. (SNCY) showcases a robust operating cash flow, indicating a strong capability to generate cash from its primary business operations. However, the airline's current and quick ratios, being below 1, suggest it may face challenges in meeting its short-term liabilities with its short-term assets.

For more detailed insights, check out: Breaking Down Sun Country Airlines Holdings, Inc. (SNCY) Financial Health: Key Insights for Investors

Sun Country Airlines Holdings, Inc. (SNCY) Valuation Analysis

Assessing whether Sun Country Airlines Holdings, Inc. (SNCY) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. These elements, when combined, provide a comprehensive view of the company's current market position.

To determine if SNCY is correctly valued, consider the following:

• Price-to-earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings. A lower P/E ratio might suggest undervaluation, while a higher ratio could indicate overvaluation, relative to industry peers.
• Price-to-book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. A lower P/B ratio can imply undervaluation, suggesting that the market price is less than the net asset value of the company.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the total value of the company (including debt) to its earnings before interest, taxes, depreciation, and amortization. A lower EV/EBITDA ratio may indicate that the company is undervalued compared to its peers.

Analyzing stock price trends provides insights into market sentiment and investor confidence:

• 12-Month Stock Price Trend: Reviewing the stock's performance over the past year helps to understand its volatility and overall trend. Consistent growth may reflect positive market sentiment, while declines could signal concerns among investors.

Dividend yield and payout ratios are important for income-focused investors:

• Dividend Yield: As of April 2025, Sun Country Airlines Holdings, Inc. does not offer a dividend yield, as the company does not currently pay dividends.
• Payout Ratios: Since SNCY does not pay dividends, payout ratios are not applicable.

Analyst consensus offers a summarized view of expert opinions on the stock:

• Analyst Ratings: Evaluate whether analysts recommend a 'buy,' 'hold,' or 'sell' for the stock. Consensus ratings can influence investor decisions and market perception.

For additional insights into the company's strategic direction, refer to Mission Statement, Vision, & Core Values of Sun Country Airlines Holdings, Inc. (SNCY).

Sun Country Airlines Holdings, Inc. (SNCY) Risk Factors

Investing in Sun Country Airlines Holdings, Inc. (SNCY) involves navigating a complex landscape of potential risks, both internal and external, that could significantly impact its financial health. These risks span from intense industry competition and fluctuating market conditions to operational challenges and strategic uncertainties. Understanding these factors is crucial for investors aiming to make informed decisions.

Here's an overview of key risks facing Sun Country Airlines Holdings, Inc. (SNCY):

• Industry Competition: The airline industry is highly competitive.
• Regulatory Changes: Airlines are subject to extensive regulations. Changes in these regulations can increase operating costs or limit operational flexibility.
• Market Conditions: Economic downturns, geopolitical instability, and fluctuations in fuel prices can significantly impact demand for air travel and airline profitability.

Specific risks highlighted in recent earnings reports and filings may include:

• Operational Risks: These can include disruptions due to weather, air traffic control issues, or labor disputes, which can lead to flight cancellations and increased costs.
• Financial Risks: Fluctuations in fuel prices, interest rates, and foreign exchange rates can impact profitability. Additionally, the company's debt levels and ability to meet financial covenants are important considerations.
• Strategic Risks: The success of Sun Country's business model depends on its ability to effectively manage costs, maintain customer satisfaction, and adapt to changing market conditions.

Mitigation strategies or plans that Sun Country Airlines Holdings, Inc. (SNCY) may employ to address these risks could include:

• Fuel Hedging: Using financial instruments to mitigate the impact of fuel price volatility.
• Cost Control Measures: Implementing strategies to reduce operating expenses and improve efficiency.
• Diversification: Expanding into new markets or services to reduce reliance on specific routes or customer segments.
• Insurance: Obtaining insurance coverage to mitigate potential losses from accidents, natural disasters, or other unforeseen events.

For further insights into Sun Country Airlines Holdings, Inc. (SNCY) financial health, consider exploring this comprehensive analysis: Breaking Down Sun Country Airlines Holdings, Inc. (SNCY) Financial Health: Key Insights for Investors

Sun Country Airlines Holdings, Inc. (SNCY) Growth Opportunities

Sun Country Airlines Holdings, Inc. (SNCY) has several key growth drivers that could influence its future performance. These include strategic initiatives, market dynamics, and competitive advantages that position the company within the airline industry.

Key growth drivers for Sun Country Airlines Holdings, Inc. (SNCY) may include:

• Market Expansion: Identifying and capitalizing on opportunities in underserved markets or expanding its presence in existing markets.
• Product Innovation: Enhancing service offerings or introducing new products to attract a broader customer base.
• Strategic Partnerships: Collaborating with other airlines or travel-related companies to expand its network and service capabilities.
• Acquisitions: Pursuing strategic acquisitions to increase market share or expand its operational footprint.

Future revenue growth projections and earnings estimates for Sun Country Airlines Holdings, Inc. (SNCY) will likely depend on several factors, including overall demand for air travel, fuel costs, and the company's ability to manage its operating expenses. Analyst estimates and company guidance can provide insights into these projections.

Strategic initiatives and partnerships that may drive future growth for Sun Country Airlines Holdings, Inc. (SNCY) could include:

• Network Optimization: Refining its route network to focus on the most profitable routes and markets.
• Ancillary Revenue Growth: Increasing revenue from ancillary services such as baggage fees, seat upgrades, and in-flight sales.
• Fleet Management: Optimizing its fleet composition to improve fuel efficiency and reduce operating costs.
• Loyalty Programs: Enhancing its loyalty program to increase customer retention and drive repeat business.

Sun Country Airlines Holdings, Inc. (SNCY) competitive advantages that position the company for growth might include:

• Cost Structure: Maintaining a competitive cost structure to offer attractive fares and compete effectively in the market.
• Focus on Leisure Travel: Catering to the leisure travel market, which may be less sensitive to economic fluctuations than business travel.
• Strong Brand Reputation: Building a strong brand reputation for customer service and reliability.
• Operational Efficiency: Improving operational efficiency to minimize disruptions and maintain on-time performance.

For example, according to the Sun Country Airlines Holdings, Inc. (SNCY) Q4 2023 report, the airline reported total operating revenue of $261.8 million, which is an increase of 16.4% compared to 2022. The net income was $3.7 million, or $0.06 per diluted share. The airline ended the year with unrestricted cash, cash equivalents, and short-term investments totaling $205.8 million.

Additionally, the company's strategic focus on the leisure travel market and its ability to manage costs effectively could provide a competitive edge. These factors, combined with broader industry trends, will shape Sun Country Airlines Holdings, Inc. (SNCY) future growth trajectory.