Despite a challenging year, Sun Country Airlines (SNCY -1.43%) posted the industry's best completion factor and record-high revenue in 2022.

Considering that Sun Country's stock still trades more than 52% below its April 2021 high, and that last year's revenue came in 43% higher than in 2021, it certainly presents an interesting investment case. 

Let's look at Sun Country's fourth-quarter and full-year 2022 results to determine if this airline stock is a buy. 

Record-high revenue in 2022

Fourth-quarter revenue of $227 million landed near the upper end of the company's guidance range, a notable 31.6% increase year over year. Adjusted operating margin also came in toward the top of the range at 7%. Net income for the quarter reached $7.3 million, a significant improvement over 2021's fourth-quarter loss of $1 million.  

A successful holiday travel season helped boost fourth-quarter numbers as Sun Country reported the industry's best December completion factor (the percentage of scheduled flights that were actually flown) of 99.6%. In the quarter, system block hours (the total number of hours from the time each flight closes the door and leaves the gate until the door opens at the destination) jumped 37% from the same period in 2019.

Year over year, Sun Country's total revenue per available seat mile (TRASM) for scheduled service increased 27.3%, total fare climbed to over $177, and ticket plus ancillary revenue grew 45%. Chief financial officer Dave Davis said, "This strengthened unit revenue shows no signs of abating as we move into the first quarter."

For the year, scheduled-service TRASM soared nearly 37% and capacity reached 83.5%, the highest it's been yearly since 2018. And Sun Country set a company record with more than $894 million in revenue in 2022, 43.6% more year over year.

It was a turbulent year

While the company flourishes by several metrics, Sun Country faces myriad challenges in a recovering airline industry. The impact of the omicron virus strain early in the year, combined with a 71% increase in fuel prices versus 2021, set the tone for an arduous year.

Two main problems plagued Sun Country last year. First, due to crew and aircraft limitations, the airline ran a smaller operation than initially anticipated. 

Second, 2022 results include the added costs of Sun Country's new pilot agreement, signed at the end of 2021. As a result, cost per available seat mile increased 9% in 2022 versus 2021, producing a notable impact on net margin.

Another factor affecting profitability last year was the airline's partnership with Amazon for cargo shipments. In the first half of 2022, the maintenance of several Amazon aircraft drove down cargo block hours while hiking expenses. In addition, Sun Country increased its pilot pay for Amazon faster than expected, which CEO Jude Bricker says is just a "temporary issue."

Although full-year 2022 cargo revenue fell 1%, it grew 5% in the fourth quarter.

Things are looking up

During last month's earnings call, Bricker said that it was good to "get some of the challenges of last year behind us and focus on growth and execution."  Sun Country anticipates strong first-quarter bookings and unit revenue.

With roughly 80% of planned first-quarter passenger revenue already booked, Sun Country expects this momentum to carry throughout the quarter. Total quarterly revenue is estimated to reach $280 million to $290 million, which would mark a 24% to 28% improvement year over year. 

The first quarter is Sun Country's strongest quarter historically, and this year appears to be no exception. The quarter's operating margin is expected to hit 15% to 20%, and Bricker said margins will continue to expand moving into 2024.

Is Sun Country a buy?

Considering that last quarter's total system block hours exceeded pre-pandemic levels by 37%, and that the company's focus has shifted from crisis mitigation during the pandemic back to growth and profitability, I think Sun Country stock makes a great buy at current price levels. Record-high 2022 revenue doesn't hurt, either.

According to Yahoo! Finance, the airline's earnings are expected to grow 77.9% annually for the next five years. In the long run, an investment in Sun Country Airlines stock could really take off.