SkyWest's EPS Estimates Northbound: Should Investors Buy the Stock?

SkyWest, Inc. (SKYW) has been benefiting from flying contract rate increases, fleet modernization techniques and consistent shareholder-friendly initiatives. The positive sentiment surrounding SKYW stock is evident from the fact that the Zacks Consensus Estimate for the fourth quarter of 2025, as well as full-year 2025 earnings, has been revised upward in the past 60 days.

The Zacks Consensus Estimate for first-quarter 2026 and full-year 2026 earnings has also been projected northward in the past 60 days.

Given this encouraging backdrop, let’s delve deeper to find out whether it is worth buying, selling or holding the SKYW stock at current prices.

Tailwinds Working in Favor of SKYW Stock

SkyWest's top line benefits from flying contract rate increases. As of Sept. 30, 2025, SkyWest had cumulative deferred revenues of $269.40 million under its flying contracts. Revenues from flying agreements (contributing 96.1% to the top line) grew 16.5% year over year during the first nine months of 2025. The airline carried 12.3% more passengers during the first nine months of 2025 on a year-over-year basis. Departures increased 16.2% on a year-over-year basis.

SkyWest's fleet-modernization efforts to cater to the improvement in travel demand are commendable. In a bid to modernize its fleet, SKYW has fleet-related agreements with airline heavyweights like United Airlines UAL, Delta Air Lines DAL and Alaska Airlines ALK. SKYW had no E175 aircraft deliveries during the third quarter of 2025, consistent with prior expectations.

Concurrent with its third-quarter 2025 results, SkyWest also announced that it has inked a multi-year contract extension with United Airlines for up to 40 CRJ200 aircraft. Further, UAL is scheduled to deliver three E175 planes in the fourth quarter of 2025 and 10 in 2026. Alaska Airlines is expected to deliver one E175 in 2026. DAL is likely to deliver 10 E175 planes in 2027 and six in 2028.  Apart from deals with UAL, DAL and ALK, SkyWest is scheduled to purchase 16 E175s from Embraer, with delivery dates in 2027 and 2028. By 2028-end, SkyWest is expected to have nearly 300 E175 aircraft.

SkyWest’s solid balance sheet increases financial flexibility. The company ended third-quarter 2025 with cash and marketable securities of $753.35 million, higher than the current debt level of $519.51 million. This implies that the company has sufficient cash to meet its current debt obligations. Meanwhile, long-term debt level has decreased to $1.86 billion (which translates into a debt-to-capitalization of 49%) at the end of third-quarter 2025 from $2.19 billion (which translates into a debt-to-capitalization of 53.8%) at third-quarter 2024-end.

Long-Term Debt to Capitalization

A strong balance sheet enables the company to reward shareholders with share repurchases. As a reflection of its shareholder-friendly stance, in May 2025, SKYW's existing repurchase plan was increased by $250 million. SkyWest repurchased 244,000 shares for $26.6 million during the third quarter of 2025. As of Sept. 30, 2025, SKYW had $240 million available under its current share repurchase program. Buybacks not only reduce the total outstanding share count, thereby increasing earnings per share, but also signal management's belief in the intrinsic value of the stock.

Impressive Valuation Picture for SKYW Stock

From a valuation perspective, SKYW is trading at a discount compared to the industry, going by its trailing 12-month price-to-book (P/B)ratio.

The stock has a trailing 12-month P/B-TTM of 1.61X compared with 2.98X for the industry over the past five years. These factors indicate that the stock’s valuation is attractive. SKYW has a Value Score of A.

SKYW P/B Ratio (Trailing 12 months) Vs. Industry

Time to Buy SKYW Stock

It is understood that SKYW stock is attractively valued, and an increase in flying contracts is contributing to SKYW’s top line. Fleet modernization techniques and consistent shareholder-friendly initiatives act as other tailwinds. We believe that the positives surrounding the stock (as highlighted throughout the write-up) outweigh the concerns regarding macro-economic uncertainty, escalating operating expenses and pilot shortages (bothering regional carriers like SkyWest). We, therefore, suggest investors add SKYW stock to their portfolios for healthy returns. The company’s Zacks Rank #2 (Buy) further supports our thesis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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