We assign a fundamental rating of 5 out of 10 to SKYW. SKYW was compared to 22 industry peers in the Passenger Airlines industry. SKYW has an excellent profitability rating, but there are some minor concerns on its financial health. SKYW scores decently on growth, while it is valued quite cheap. This could make an interesting combination.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

SKYW had positive earnings in the past year.
In the past year SKYW had a positive cash flow from operations.
SKYW had positive earnings in 4 of the past 5 years.
Of the past 5 years SKYW 4 years had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of 5.69%, SKYW belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
SKYW has a Return On Equity of 15.80%. This is in the better half of the industry: SKYW outperforms 77.27% of its industry peers.
With a decent Return On Invested Capital value of 8.18%, SKYW is doing good in the industry, outperforming 77.27% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SKYW is significantly below the industry average of 20.52%.
The last Return On Invested Capital (8.18%) for SKYW is above the 3 year average (3.59%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	5.69%
ROE	15.8%
ROIC	8.18%

ROA(3y)2%

ROA(5y)1.49%

ROE(3y)6.05%

ROE(5y)4.54%

ROIC(3y)3.59%

ROIC(5y)N/A

1.3 Margins

SKYW has a better Profit Margin (10.62%) than 90.91% of its industry peers.
In the last couple of years the Profit Margin of SKYW has declined.
With an excellent Operating Margin value of 15.23%, SKYW belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Operating Margin of SKYW has declined.
With an excellent Gross Margin value of 73.08%, SKYW belongs to the best of the industry, outperforming 95.45% of the companies in the same industry.
In the last couple of years the Gross Margin of SKYW has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	15.23%
PM (TTM)	10.62%
GM	73.08%

OM growth 3YN/A

OM growth 5Y-4.69%

PM growth 3Y30.45%

PM growth 5Y-4.37%

GM growth 3Y7.76%

GM growth 5Y0.68%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SKYW is destroying value.
There is no outstanding debt for SKYW. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

SKYW has an Altman-Z score of 1.82. This is not the best score and indicates that SKYW is in the grey zone with still only limited risk for bankruptcy at the moment.
SKYW has a better Altman-Z score (1.82) than 77.27% of its industry peers.
SKYW has a debt to FCF ratio of 9.85. This is a negative value and a sign of low solvency as SKYW would need 9.85 years to pay back of all of its debts.
SKYW has a Debt to FCF ratio of 9.85. This is in the better half of the industry: SKYW outperforms 68.18% of its industry peers.
SKYW has a Debt/Equity ratio of 0.78. This is a neutral value indicating SKYW is somewhat dependend on debt financing.
SKYW has a Debt to Equity ratio of 0.78. This is in the better half of the industry: SKYW outperforms 68.18% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.78
Debt/FCF	9.85
Altman-Z	1.82

ROIC/WACC0.93

WACC8.84%

2.3 Liquidity

SKYW has a Current Ratio of 0.73. This is a bad value and indicates that SKYW is not financially healthy enough and could expect problems in meeting its short term obligations.
SKYW's Current ratio of 0.73 is fine compared to the rest of the industry. SKYW outperforms 72.73% of its industry peers.
A Quick Ratio of 0.63 indicates that SKYW may have some problems paying its short term obligations.
SKYW's Quick ratio of 0.63 is fine compared to the rest of the industry. SKYW outperforms 63.64% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.73
Quick Ratio	0.63

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

SKYW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 33.20%, which is quite impressive.
SKYW shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 92.54% yearly.

EPS 1Y (TTM)33.2%

EPS 3Y92.54%

EPS 5YN/A

EPS Q2Q%-5.56%

Revenue 1Y (TTM)N/A

Revenue growth 3YN/A

Revenue growth 5YN/A

Sales Q2Q%8.48%

3.2 Future

SKYW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.03% yearly.
Based on estimates for the next years, SKYW will show a small growth in Revenue. The Revenue will grow by 3.98% on average per year.

EPS Next Y9.55%

EPS Next 2Y9.03%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year4.29%

Revenue Next 2Y3.98%

Revenue Next 3YN/A

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

SKYW is valuated reasonably with a Price/Earnings ratio of 9.81.
Based on the Price/Earnings ratio, SKYW is valued cheaper than 90.91% of the companies in the same industry.
SKYW is valuated cheaply when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 8.95 indicates a reasonable valuation of SKYW.
Based on the Price/Forward Earnings ratio, SKYW is valued cheaper than 86.36% of the companies in the same industry.
SKYW's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.72.

		Industry Rank	Sector Rank
PE	9.81
Fwd PE	8.95

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SKYW is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SKYW indicates a somewhat cheap valuation: SKYW is cheaper than 63.64% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	16.07
EV/EBITDA	5.33

4.3 Compensation for Growth

SKYW's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of SKYW may justify a higher PE ratio.