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Surf Air Mobility, Inc. (SRFM)
NYSE:SRFM
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Surf Air Mobility, Inc.
(NYSE:SRFM)
41Neutral
Positive Factors
Earnings
Surf Air Mobility reported its first quarterly GAAP net profit since going public, attributed to removing unprofitable routes and better performance in the On-Demand flight services segment.
Strategic Initiatives
The advancement of the Cessna Grand Caravan electric/hybrid powertrain program and the potential for a joint venture agreement are seen as major catalysts.
Negative Factors
Financial Constraints
Capital remains a significant constraint to the business, with only about $21.7M of cash remaining on the balance sheet, which may necessitate raising equity.
Revenue Decline
Scheduled Air Service revenues dropped primarily due to the elimination of many unprofitable routes, indicating challenges in that segment.
Surf Air Mobility, Inc. (SRFM) vs. S&P 500 (SPY)
Market Cap
$58.81M
Dividend YieldN/A
Average Volume (3M)252.08K
Price to Earnings (P/E)―
Beta (1Y)4.06
Revenue Growth97.38%
EPS Growth72.63%
CountryUS
Employees556
SectorIndustrials
Sector Strength70
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)-6.52
Shares Outstanding16,946,981
10 Day Avg. Volume221,290
30 Day Avg. Volume252,082
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.63
Price to Cash Flow (P/CF)-1.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.88Price Target Upside127.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Surf Air Mobility, Inc. Business Overview & Revenue Model
Company DescriptionSurf Air Mobility Inc. operates as an electric aviation and air travel company in the United States. It offers an air mobility platform with scheduled routes and on demand charter flights operated by third parties; and air cargo services. The company is headquartered in Hawthorne, California.
How the Company Makes MoneySurf Air Mobility makes money through a combination of its membership-based air travel services and its efforts in developing hybrid-electric propulsion systems. The company's primary revenue stream comes from offering subscription-based regional air travel services, providing members with access to a network of scheduled flights. Additionally, Surf Air Mobility generates income through strategic partnerships and collaborations with aircraft manufacturers and other aviation companies, focusing on the commercialization of its hybrid-electric technology. These partnerships may involve licensing agreements, joint ventures, or other forms of collaboration that leverage the company's innovative propulsion systems, contributing to its overall earnings.
Surf Air Mobility, Inc. Financial Statement Overview
Summary
Surf Air Mobility, Inc. is facing significant financial challenges with persistent losses and negative equity, which points to serious concerns about its financial health and sustainability. Revenue growth is a positive sign, but the company needs to address operational inefficiencies and stabilize its financial structure to improve its financial standing.Income Statement
The income statement shows a significant challenge with profitability as evidenced by negative net income and EBIT margins. Although there is revenue growth from $60.5M in 2023 to $118.2M in 2024, the company continues to face high operating losses, with a net profit margin of -158.39% in TTM (Trailing-Twelve-Months), reflecting substantial inefficiencies.35
Negative
Balance Sheet
The balance sheet reveals a precarious financial position with negative stockholders' equity at -$135.61M as of TTM, indicating potential solvency issues. The debt-to-equity ratio cannot be calculated due to negative equity, highlighting financial instability. The equity ratio is also negative, suggesting that liabilities exceed assets.30
Negative
Cash Flow
Cash flow analysis indicates operational challenges with negative free cash flow and operating cash flow. However, the company has managed to increase its financing cash flow, which might provide some short-term relief. The ratio of operating cash flow to net income remains negative, indicating cash flow struggles relative to accounting losses.40
Negative
| Breakdown | ||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 118.21M | 60.51M | 100.61M | 11.80M | 7.50M |
| Gross Profit | ||||
| 962.00K | -5.17M | 6.19M | -3.75M | -3.53M |
| EBIT | ||||
| -116.86M | -196.77M | -110.68M | -33.35M | -20.76M |
| EBITDA | ||||
| -171.94M | -247.27M | -72.74M | -32.59M | -19.04M |
| Net Income Common Stockholders | ||||
| -187.17M | -250.70M | -117.15M | -35.78M | -23.44M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.00K | 1.72M | 6.00K | 719.00K | 7.40M |
| Total Assets | ||||
| 13.70M | 110.99M | 13.70M | 7.56M | 11.71M |
| Total Debt | ||||
| 30.25M | 47.45M | 30.25M | 23.47M | 20.39M |
| Net Debt | ||||
| 30.24M | 45.73M | 30.24M | 22.75M | 12.99M |
| Total Liabilities | ||||
| 235.79M | 188.47M | 235.79M | 180.58M | 153.25M |
| Stockholders Equity | ||||
| -222.09M | -77.48M | -222.09M | -173.03M | -141.54M |
| Cash Flow | Free Cash Flow | |||
| -48.69M | -72.15M | -28.34M | -24.19M | -9.03M |
| Operating Cash Flow | ||||
| -50.04M | -64.37M | -28.04M | -23.93M | -8.73M |
| Investing Cash Flow | ||||
| -442.00K | -7.10M | -298.00K | -261.00K | 302.00K |
| Financing Cash Flow | ||||
| 44.78M | 72.99M | 27.67M | 18.25M | 14.18M |
Surf Air Mobility, Inc. Technical Analysis
Negative
3.47
Price Trends
4.02
Negative
3.77
Negative
2.86
Positive
Market Momentum
-0.12
Positive
42.38
Neutral
10.01
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SRFM, the sentiment is Negative. The current price of 3.47 is below the 20-day moving average (MA) of 3.72, below the 50-day MA of 4.02, and above the 200-day MA of 2.86, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 42.38 is Neutral, neither overbought nor oversold. The STOCH value of 10.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SRFM.
Surf Air Mobility, Inc. Risk Analysis
Surf Air Mobility, Inc. disclosed 77 risk factors in its most recent earnings report. Surf Air Mobility, Inc. reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Surf Air Mobility, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $8.05B | 13.61 | 3.91% | 3.08% | 3.83% | -13.91% | |
56 Neutral | $237.47M | ― | -11.97% | ― | 12.04% | -30.50% | |
54 Neutral | $3.94B | ― | -95.88% | ― | ― | 17.43% | |
41 Neutral | $58.81M | ― | 138.02% | ― | 97.38% | 72.63% | |
40 Underperform | $5.07B | ― | -62.47% | ― | -86.82% | -7.68% | |
37 Underperform | $1.06B | ― | -95.63% | ― | ― | -2.94% | |
33 Underperform | $754.70M | ― | -2416.94% | ― | -36.80% | 96.50% |
* Industrials Sector Average
Performance Comparison
SRFM
Surf Air Mobility, Inc.
3.33
-1.92
-36.57%
BLDE
Blade Air Mobility
2.80
-0.33
-10.54%
JOBY
Joby Aviation
6.11
0.97
18.87%
EVEX
Eve Holding
3.49
-1.80
-34.03%
UP
Wheels Up Experience
1.02
-1.86
-64.58%
ACHR
Archer Aviation
7.26
2.76
61.33%
Surf Air Mobility, Inc. Earnings Call Summary
Earnings Call Date: Mar 18, 2025 | % Change Since: -9.64% | Next Earnings Date: May 20, 2025
Earnings Call Sentiment Positive
The earnings call highlights significant achievements such as revenue growth exceeding guidance, improvement in adjusted EBITDA, successful financing, and advancements in strategic initiatives like SurfOS and electrification. However, there are challenges, including a decline in scheduled service revenue, maintenance backlog issues, and liquidity constraints that were addressed by the end of the year.Highlights
Revenue Growth and Exceeded Guidance
Fourth quarter revenue rose 5% to $28.05 million, exceeding the high end of the revenue guidance of $25 million to $28 million. Full year revenue rose 6% to $119.4 million.
Improvement in Adjusted EBITDA
Adjusted EBITDA loss improved by $11.5 million or 63% for the fourth quarter of 2024 and by $6.8 million or 13% for the full year.
Successful Financing and Capital Structure Improvement
Secured a $50 million term loan at attractive rates, extended the maturity of secured debt, and reduced liabilities by over $42 million.
SurfOS Platform Development
Rolled out SurfOS to beta users, introduced several new features, and established multilingual and multi-currency marketplace capabilities.
Electrification Initiatives Progress
Engaged with FAA on certification planning for the Cessna Caravan Supplemental Type Certificate, and established a Cessna Electrification Customer Advisory Board.
Lowlights
Scheduled Service Revenue Decline
Scheduled service revenue decreased by 6% in the fourth quarter, primarily due to the elimination of unprofitable routes.
Maintenance Backlog and Aircraft Availability Issues
Deployment of capital raised in November towards clearing the aircraft maintenance backlog and addressing interior and corrosion items, which impacted aircraft availability.
Liquidity Challenges
Faced significant financial constraints throughout the year, although these were addressed by the end of the year.
Company Guidance
During the Surf Air Mobility fourth quarter and full year 2024 earnings call, several key metrics and guidance for future performance were discussed. The company reported fourth-quarter revenue of $28.05 million, surpassing the upper end of their guidance range of $25 million to $28 million. Notably, the adjusted EBITDA loss for the quarter improved by $11.5 million, or 63%, reaching $6.9 million, within the guidance range of $5 million to $8 million. For the full year, revenue increased by 6% year-over-year to $119.4 million, while the adjusted EBITDA loss improved by $6.8 million, or 13%, to $44.1 million. Looking ahead to 2025, the company aims to achieve profitability in its airline operations, defined as positive adjusted EBITDA, by focusing on process improvements, exiting unprofitable routes, and leveraging their proprietary SurfOS platform. For Q1 2025, the company guides revenue between $21 million and $24 million and an adjusted EBITDA loss of $12 million to $15 million. Additionally, Surf Air Mobility plans to continue developing its electrification initiatives, with the Cessna Caravan Supplemental Type Certificate on track for completion in 2027, and aims to commercialize the SurfOS platform by 2026.Surf Air Mobility, Inc. Corporate Events
Business Operations and Strategy
Surf Air Mobility Unveils New Profitability Strategy
Positive
Feb 14, 2025
On February 14, 2025, Surf Air Mobility Inc. released a new video in its business plan series, detailing strategies to achieve profitability in its airline operations by 2025. The video, presented by CEO Deanna White, highlights the company’s focus on optimizing its operations as part of its ongoing transformation plan. The announcement of this strategic initiative is indicative of Surf Air Mobility’s efforts to solidify its position within the regional air mobility sector and demonstrates a commitment to innovation and operational efficiency, which could have significant implications for its stakeholders.
Product-Related AnnouncementsBusiness Operations and Strategy
Surf Air Mobility Unveils New Video Series
Positive
Jan 29, 2025
On January 29, 2025, Surf Air Mobility Inc. announced the release of a new video series outlining its business plan and operations, as part of its comprehensive Transformation Plan. This initiative aims to highlight growth opportunities in the air mobility and air technology sectors, potentially enhancing the company’s positioning within the industry.
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.