Is Allegiant Travel Co. overvalued or undervalued?

As of 31 July 2024, the valuation grade for Allegiant Travel Co. has moved from very expensive to risky, indicating a significant shift in market perception. The company appears to be undervalued, particularly when considering its P/E ratio of 10, which is lower than the industry average, and an EV to EBITDA ratio of 5.14, suggesting potential for improvement in profitability metrics. Additionally, the PEG ratio stands at a notably low 0.27, reinforcing the notion that the stock may be undervalued relative to its growth prospects.
In comparison to peers, Allegiant's P/E ratio of 9.24 is lower than that of Alaska Air Group, which stands at 10.04, and significantly lower than SkyWest's 19.09. Meanwhile, Copa Holdings, which is rated very attractive, has a P/E of 7.63, indicating that Allegiant may still have room for valuation adjustment. The company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -45.21% compared to the index's 2.44%, highlighting the potential for recovery as market conditions improve.