Here's Why You Should Give Allegiant Stock a Miss Now

Allegiant ALGT is facing mounting pressure from rising operating expenses and the complexity prevailing in the economic environment, which are adversely affecting the company’s prospects and making it an unattractive choice for investors’ portfolios.

Let’s delve deeper.

ALGT: Key Risks to Watch

Southward Earnings Estimate Revision:The Zacks Consensus Estimate for the current-quarter earnings has been revised 84.68% downward over the past 60 days and is pegged at a loss of $2.05 per share. Meanwhile, the Zacks Consensus Estimate for 2025 earnings stands at $2.42 per share, indicating a 30.86% fall over the past 60 days.

The unfavorable estimate revision indicates brokers’ lack of confidence in the stock.

Dim Price Performance:  The company’s price trend reveals that its shares have fallen 36.6%  compared with the Transportation - Truck industry’s 4.6% decline.

Weak Zacks Rank: ALGT currently carries a Zacks Rank #5 (Strong Sell).

Headwinds: Allegiant’s bottom line is under increasing pressure due to rising expenses, which are challenging its financial stability. In the second quarter of 2025, the company’s consolidated operating expenses surged 19.9% year over year, whereas airline-specific operating expenses increased 3.8% year over year.

Operating expenses include aircraft lease rentals, maintenance and repairs, station operations and labor costs, which increased on a year-over-year basis by 91.7%, 18.4%, 7.8% and 2%, respectively.

Moreover, companies like ALGT, along with many others across the United States, are navigating a volatile macro environment marked by economic uncertainty, shifting tariff regulations and geopolitical tensions. This complexity is forcing firms to delay investments, revise forecasts and adapt quickly to remain competitive while managing rising compliance and operational risks.

Stocks to Consider

Investors interested in the Transportation sector may consider LATAM Airlines Group LTM and SkyWest SKYW.

LTM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

LTM has an expected earnings growth rate of 45% for the current year. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters, missed once and met in the remaining one, delivering an average beat of 4.04%.

SKYW currently sports a Zacks Rank #1.

SkyWest has an expected earnings growth rate of 28.06% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 21.92%.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research