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Air Transport Services Group Inc (ATSG)
NASDAQ:ATSG
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Air Transport Services
(NASDAQ:ATSG)
63Neutral
Air Transport Services (ATSG) vs. S&P 500 (SPY)
Market Cap
$1.48B
Dividend YieldN/A
Average Volume (3M)809.69K
Price to Earnings (P/E)55.8
Beta (1Y)1.10
Revenue Growth-5.25%
EPS Growth-49.90%
CountryUS
Employees4,745
SectorIndustrials
Sector Strength65
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)0.40
Shares Outstanding65,890,480
10 Day Avg. Volume726,956
30 Day Avg. Volume809,688
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.75
Price to Cash Flow (P/CF)2.80
P/FCF Ratio15.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.50Price Target Upside0.27% Upside
Rating ConsensusHold
Number of Analyst Covering0
Air Transport Services Business Overview & Revenue Model
Company DescriptionAir Transport Services Group, Inc., together with its subsidiaries, provides aircraft leasing and air cargo transportation and related services in the United States and internationally. The company offers aircraft, flight crews, aircraft maintenance, aircraft hull and liability insurance, and aviation fuel services; and aircraft maintenance and modification services, including airframe modification and heavy maintenance, component repairs, engineering services, and aircraft line maintenance. It also provides equipment maintenance services; cargo load transfer and package sorting services; crew training services; and airline express operation, line and heavy maintenance, and ground handling services. The company's ground support services include labor and management for cargo load transfer and sorting; design, installation, and maintenance of material handling equipment; leasing and maintenance of ground support equipment; and general facilities maintenance. In addition, it offers equipment installation and maintenance, vehicle maintenance and repair, jet fuel, and deicing services. Further, the company operates cargo and passenger transportation business; resells and brokers aircraft parts; and performs passenger-to-freighter and passenger-to-combi conversions of aircrafts. It provides its services to delivery companies, freight forwarders, airlines, air transportation, e-commerce, package delivery, and logistics industries, as well as government customers. As of December 31, 2021, the company's in-service aircraft fleet consisted of 107 owned aircraft and ten leased aircraft. The company was formerly known as ABX Holdings, Inc. Air Transport Services Group, Inc. was founded in 1980 and is based in Wilmington, Ohio.
How the Company Makes MoneyATSG generates revenue through multiple streams. A significant portion comes from leasing aircraft to customers, which includes both dry leasing (aircraft only) and wet leasing (aircraft, crew, maintenance, and insurance). Additionally, ATSG offers air cargo transportation services, primarily through its subsidiary airlines. The company also provides aircraft maintenance and repair services, further diversifying its income sources. Key partnerships, such as long-term agreements with major delivery companies like Amazon and DHL, play a critical role in ATSG's revenue generation, ensuring steady and predictable income.
Air Transport Services Financial Statement Overview
Summary
Air Transport Services shows a mixed financial performance with robust profitability and improved cash flows, despite a decline in revenue. The company's balance sheet is strengthened by reduced leverage and increased equity, enhancing financial stability. However, the decline in EBIT margin poses operational challenges. Overall, the financial health is solid with room for growth in revenue and operational efficiency.Income Statement
The income statement reveals mixed performance for Air Transport Services. While the company experienced a decline in total revenue by approximately 5.2% in 2024 compared to 2023, there was a notable improvement in gross profit margin, rising to 43.5% in 2024 from 9.6% in 2023. Net profit margin improved slightly from 2.9% to 2.9%. The EBIT margin, however, showed a considerable decrease, reflecting operational challenges. Overall, the financial performance indicates positive profitability margins but declining revenue growth.65
Positive
Balance Sheet
The balance sheet shows a strengthened equity position with stockholders' equity increasing to $1.484 billion in 2024. The debt-to-equity ratio has significantly improved from 1.33 in 2023 to 0.04 in 2024, indicating lower leverage. However, the equity ratio slightly decreased from 35.3% in 2023 to 38.1% in 2024, indicating a stable capital structure. Overall, the balance sheet reflects a solid financial foundation with reduced debt levels.70
Positive
Cash Flow
The cash flow statement highlights robust cash generation capabilities, with operating cash flow remaining stable at $654 million in 2024. The free cash flow turned positive to $654 million in 2024 from negative $139 million in 2023, demonstrating improved cash management. The operating cash flow to net income ratio is strong, reflecting effective cash conversion. These factors indicate solid liquidity and financial flexibility.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.96B | 2.07B | 2.05B | 2.05B | 1.73B | Gross Profit |
| 344.93M | 199.83M | 485.77M | 485.77M | 373.93M | EBIT |
| 127.80M | 199.83M | 285.48M | -57.51M | -11.83M | EBITDA |
| 540.66M | 507.65M | 638.42M | 674.95M | 382.35M | Net Income Common Stockholders |
| 27.43M | 60.33M | 198.58M | 231.42M | 231.42M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 60.58M | 53.55M | 27.13M | 27.13M | 69.50M | Total Assets |
| 3.89B | 3.88B | 3.59B | 3.59B | 3.27B | Total Debt |
| 54.54M | 1.82B | 1.54B | 1.54B | 1.36B | Net Debt |
| -6.04M | 1.76B | 1.51B | 1.51B | 1.29B | Total Liabilities |
| 2.41B | 2.51B | 2.18B | 2.18B | 1.94B | Stockholders Equity |
| 1.48B | 1.37B | 1.41B | 1.41B | 1.32B |
| Cash Flow | Free Cash Flow | |||
| 654.08M | -139.37M | -127.31M | -127.31M | 78.81M | Operating Cash Flow |
| 654.08M | 654.08M | 472.12M | 472.12M | 583.56M | Investing Cash Flow |
| -765.93M | -765.93M | -600.06M | -600.06M | -487.48M | Financing Cash Flow |
| 138.27M | 138.27M | 85.58M | 85.58M | -66.30M |
Air Transport Services Technical Analysis
Positive
22.44
Price Trends
22.29
Positive
22.14
Positive
18.67
Positive
Market Momentum
0.04
Negative
71.80
Negative
88.41
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATSG, the sentiment is Positive. The current price of 22.44 is above the 20-day moving average (MA) of 22.33, above the 50-day MA of 22.29, and above the 200-day MA of 18.67, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 71.80 is Negative, neither overbought nor oversold. The STOCH value of 88.41 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ATSG.
Air Transport Services Risk Analysis
Air Transport Services disclosed 48 risk factors in its most recent earnings report. Air Transport Services reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Air Transport Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $57.91B | 15.18 | 14.74% | 2.23% | 0.34% | -8.45% | |
72 Outperform | $92.99B | 16.22 | 33.99% | 5.95% | 0.16% | -13.41% | |
72 Outperform | $22.99B | 7.32 | 28.63% | ― | 6.23% | 20.08% | |
70 Outperform | $28.32B | 8.22 | 26.19% | 1.25% | 6.19% | -25.26% | |
67 Neutral | $19.91B | 44.53 | 4.50% | 2.14% | 5.34% | -6.20% | |
63 Neutral | $1.48B | 55.75 | 1.92% | ― | -5.25% | -49.90% | |
62 Neutral | $8.05B | 13.60 | 4.04% | 3.11% | 3.70% | -14.19% |
* Industrials Sector Average
Performance Comparison
ATSG
Air Transport Services
22.44
9.12
68.47%
DAL
Delta Air Lines
43.60
-4.10
-8.60%
FDX
FedEx
243.78
-30.60
-11.15%
LUV
Southwest Airlines
33.58
5.08
17.82%
UAL
United Airlines Holdings
69.05
21.70
45.83%
UPS
United Parcel
109.99
-30.41
-21.66%
Air Transport Services Earnings Call Summary
Earnings Call Date: Mar 3, 2025 | % Change Since: 0.54% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements, such as the expansion with Amazon, positive free cash flow, and reduced capital expenditures. However, these were tempered by declining revenues and earnings, as well as losses in the ACMI Services segment. The call underscores a strategic focus on overcoming current challenges and leveraging growth opportunities.Highlights
Expanded Agreement with Amazon
ATSG expanded and extended their flying agreement with Amazon, adding 10 additional aircraft, bringing the total to 51 767 aircraft operated for Amazon, including 30 leased to them.
Positive Free Cash Flow
ATSG generated $107 million of free cash flow through June 2024, with expectations of additional positive free cash flow for the rest of the year.
Leasing Success and Market Expansion
ATSG leased four additional 767 freighters to external customers since June and has lease commitments for two converted Airbus 330 aircraft expected to deliver in Q4, indicating strong demand in international markets.
Reduced Capital Expenditures
Capital expenditure outlook for 2024 decreased to $390 million, down from $410 million, with a $400 million reduction compared to 2023.
Debt Reduction and Improved Liquidity
Total debt was reduced by $131 million since the beginning of the year, and the company maintains healthy liquidity with $1.4 billion in unencumbered aircraft assets.
Lowlights
Revenue and Earnings Decline
Revenues were down $41 million or 8% year-over-year to $488 million. GAAP pretax earnings fell from $49.7 million to $10.7 million, and diluted EPS dropped from $0.49 to $0.11.
ACMI Services Segment Loss
ACMI Services reported a pretax loss of $7 million compared with a gain of $24 million in the same quarter last year, affected by fewer block hours and increased expenses.
Decline in Adjusted EBITDA
Second quarter adjusted EBITDA was $130 million, down $27 million from the prior year period, driven by fewer block hours and increased expenses in ACMI Services.
Company Guidance
During the Q2 2024 earnings call for Air Transport Services Group (ATSG), several key metrics and projections were discussed. The company reported revenues of $488 million, a decline of 8% from the previous year, and GAAP pretax earnings of $10.7 million, down from $49.7 million. Adjusted pretax earnings decreased by $41 million to $17 million, with adjusted EPS down by $0.38 to $0.19. Despite these reductions, ATSG generated $107 million in free cash flow through June, and the adjusted EBITDA outlook for 2024 was raised to $526 million. The capital expenditure outlook was lowered to $390 million, with significant reductions in both growth and sustaining CapEx. Additionally, the company plans to reduce its adjusted EBITDA leverage ratio to 2.9x by the end of the year. ATSG highlighted its Lease Plus strategy and continued demand for its midsized freighters, including 51 Boeing 767 aircraft operated for Amazon, as key growth drivers.Air Transport Services Corporate Events
Private Placements and FinancingM&A TransactionsFinancial Disclosures
Air Transport Services Awaits Acquisition and Financial Disclosure
Neutral
Jan 27, 2025
Air Transport Services Group, Inc. is set to be acquired by Stonepeak Nile Parent LLC and Stonepeak Nile MergerCo Inc., as part of a pending acquisition. The company is preparing to release preliminary estimated unaudited financial results for the three months and year ended December 31, 2024, to prospective lenders in connection with a potential debt financing transaction.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.