After three torturous years of selling, investors are once more buying JetBlue Airways
Given the airline industry's history of capital destruction, you've got to wonder if today's buyers are setting themselves up to become bagholders in the next year or so. Still, the numbers speak well for JetBlue:
Metric |
Estimate |
Actual |
Year-Ago |
---|---|---|---|
Revenue |
$1,030 million |
$1,030 million |
$854 million |
Per-share earnings |
$0.19 |
$0.18 |
$0.04 |
Gross margin |
Not available |
36.4% |
33% |
Free cash flow |
Not available |
Not available (Boooo!) |
$82 million |
Sources: Yahoo! Finance and Capital IQ, a division of Standard & Poor's.
Some of these gains appear to be attributable to industrywide gains. For example, peers US Airways
What makes the surge really interesting is the carrier's valuation. According to Capital IQ, JetBlue ended yesterday trading for 11 times Wall Street's average 2011 profit estimate. That's too little a premium to the 9.75% annual earnings improvement that analysts expect from JetBlue over the long term. As such, I've rated the stock to outperform in my Motley Fool CAPS portfolio.
Now it's your turn to weigh in. Do you like JetBlue at current prices? Please vote in the poll below and then leave a comment to explain your thinking.