Now trading at a price of $99.53, Ryanair has moved -7.4% so far today.
Over the same period, the stock outperformed the S&P 500 index by 3043.0%. More recently, the company's 50-day average price was $106.44. Ryanair Holdings plc, together with its subsidiaries, provides scheduled-passenger airline services in Ireland, the United Kingdom, Italy, Spain, Germany, and other European countries. The large-cap Consumer Discretionary company is headquartered in Swords, Ireland. Ryanair has not offered a regular dividend during the last year.
Growing Revenues With Increasing Reinvestment in the Business:
| 2020-03-31 | 2021-03-31 | 2022-03-31 | 2023-03-31 | |
|---|---|---|---|---|
| Revenue (MM) | $8,495 | $1,636 | $4,801 | $10,775 |
| Gross Margins | 20.1% | -39.0% | 1.5% | 19.6% |
| Operating Margins | 13.3% | -51.3% | -7.1% | 13.4% |
| Net Margins | 7.64% | -62.06% | -5.02% | 12.19% |
| Net Income (MM) | $649 | -$1,015 | -$241 | $1,314 |
| Net Interest Expense (MM) | -$52 | -$54 | -$91 | -$34 |
| Depreciation & Amort. (MM) | -$749 | -$571 | -$719 | -$923 |
| Earnings Per Share | $2.9 | -$4.57 | -$1.06 | $6.31 |
| EPS Growth | n/a | -257.59% | 76.81% | 695.28% |
| Diluted Shares (MM) | 224 | 222 | 226 | 1,655 |
| Free Cash Flow (MM) | $910 | -$2,743 | $759 | $1,976 |
| Capital Expenditures (MM) | -$1,196 | -$295 | -$1,182 | -$1,915 |
| Net Current Assets (MM) | -$5,285 | -$4,223 | -$4,129 | -$4,852 |
| Current Ratio | 0.82 | 0.98 | 1.01 | 0.8 |
| Long Term Debt (MM) | $3,583 | $3,518 | $3,715 | $2,853 |
| Net Debt / EBITDA | 1.0 | -5.47 | 6.11 | 0.15 |
Ryanair has growing revenues and increasing reinvestment in the business, exceptional EPS growth, and low leverage. However, the firm suffers from slimmer gross margins than its peers and consistently negative margins with a stable trend. Finally, we note that Ryanair has irregular cash flows.
A Very Low P/E Ratio but Trades Above Its Graham Number:
Ryanair has a trailing twelve month P/E ratio of 16.9, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of $10.52, the company has a forward P/E ratio of 10.1. According to the 29.4% compound average growth rate of Ryanair's historical and projected earnings per share, the company's PEG ratio is 0.57. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 10.8%. On this basis, the company's PEG ratio is 1.57. This suggests that these shares are overvalued. Furthermore, Ryanair is likely overvalued compared to the book value of its equity, since its P/B ratio of 32.14 is higher than the sector average of 3.12. The company's shares are currently trading 1163.9% above their Graham number. Ultimately, Ryanair's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Ryanair Has an Analyst Consensus of Strong Upside Potential:
The 4 analysts following Ryanair have set target prices ranging from $126.0 to $155.0 per share, for an average of $139.0 with a buy rating. As of April 2023, the company is trading -23.4% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
The largest shareholder is Capital International Investors, whose 5% stake in the company is worth $1,098,119,652.
