SkyWest's EPS Estimates Northbound: Should Investors Buy the Stock?

SkyWest, Inc. (SKYW) has been benefiting from flying contract rate increases, fleet modernization techniques and consistent shareholder-friendly initiatives. The positive sentiment surrounding SKYW stock is evident from the fact that the Zacks Consensus Estimate for full-year 2026 and 2027 earnings has been revised upward in the past 90 days. The consensus mark for second-quarter 2026 earnings has also been projected northward in the past 90 days.

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The favorable estimate revisions indicate brokers’ confidence in the stock.

Given this encouraging backdrop, let’s delve deeper to find out whether it is worth buying, selling or holding the SKYW stock at current prices.

Tailwinds Working in Favor of SKYW Stock

SkyWest's top line benefits from flying contract rate increases. As of Dec. 31, 2025, SkyWest had cumulative deferred revenues of $264.60 million under its flying contracts. Revenues from flying agreements (contributing 95.7% to the top line) grew 13.8% year over year during 2025. The airline carried 8.7% more passengers during 2025 on a year-over-year basis. Departures increased 12.6% on a year-over-year basis.

SkyWest's fleet-modernization efforts to cater to the improvement in travel demand are commendable. In a bid to modernize its fleet, SKYW has fleet-related agreements with airline heavyweights like United Airlines UAL, Delta Air Lines DAL and Alaska Airlines ALK. SkyWest had five E175 aircraft deliveries during the fourth quarter of 2025.

Concurrent with its fourth-quarter 2025 results, SkyWest also announced that it has inked a multi-year contract extension with United Airlines for 40 E175 aircraft in January 2026. SkyWest also reached a multi-year contract extension with Delta Air Lines for 13 E175 aircraft in January 2026. Further, UAL is scheduled to deliver eight E175 planes in 2026. Alaska Airlines is expected to deliver one E175 in 2026. DAL is likely to deliver 10 E175 planes in 2027 and six in 2028. By 2028-end, SkyWest anticipates having nearly 300 E175 aircraft in its fleet. As previously announced, SkyWest entered into a purchase agreement with Embraer, which secures delivery positions for 44 additional E175s from 2028 through 2032 for potential future flying opportunities. SkyWest also secured purchase rights on 50 additional E175s from Embraer.

SkyWest’s solid balance sheet increases financial flexibility. The company ended fourth-quarter 2025 with cash and marketable securities of $706.9 million, higher than the current debt level of $546.81 million. This implies that the company has sufficient cash to meet its current debt obligations. Meanwhile, the long-term debt level has decreased to $1.84 billion (which translates into a debt-to-capitalization of 46.6%) at the end of fourth-quarter 2025 from $2.14 billion (which translates into a debt-to-capitalization of 52.6%) at the end of fourth-quarter 2024.

A strong balance sheet enables the company to reward shareholders with share repurchases. As a reflection of its shareholder-friendly stance, in May 2025, SKYW's existing repurchase plan was increased by $250 million. SkyWest repurchased 268,000 shares for $27 million during the fourth quarter of 2025. As of Dec. 31, 2025, SkyWest had $213 million available under its current share repurchase program. Buybacks not only reduce the total outstanding share count, thereby increasing earnings per share, but also signal management's belief in the intrinsic value of the stock.

Long-Term Debt to Capitalization

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Impressive Valuation Picture for SKYW Stock

SkyWest looks cheap from a valuation standpoint. Considering the trailing 12-month price-to-book (P/B)ratio, SkyWest is trading at a discount compared to the industry.

The stock has a trailing 12-month P/B-TTM of 1.33X compared with 2.49X for the industry over the past five years. These factors indicate that the stock’s valuation is attractive. SKYW has a Value Score of A.

SKYW P/B Ratio (Trailing 12 months) Vs. Industry

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Time to Buy SKYW Stock

SKYW stock is attractively valued, and an increase in flying contracts is contributing to its top line. Fleet modernization techniquesand consistent shareholder-friendly initiatives act as other tailwinds. We believe that the positives surrounding the stock (as highlighted throughout the write-up) outweigh the concerns regarding macro-economic uncertainty, escalating operating expenses and pilot shortages (bothering regional carriers like SkyWest). We, therefore, suggest investors add SKYW stock to their portfolios for healthy returns. The company’s Zacks Rank #2 (Buy) further supports our thesis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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