The airline company Goal Linhas Arias Intelligents (GOL) has expanded its operations over the past month. However, the company expects its EPS to remain negative in the first quarter of its fiscal year. So, is it wise to buy GOL shares now? Read on to find out our perspective.
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Airlines Flying Gol Linhas Aéreas Inteligentes SA (The goalHeadquartered in Sওo Paulo, Brazil, it provides passenger and cargo services and aircraft and cargo maintenance services in Brazil, the rest of South America, the Caribbean and the United States. The company also offers the Smiles Frequent Flyer program, which allows its clients to collect and redeem miles.
The total demand of the company, revenue is measured in passenger kilometers (RPK), March saw an increase of 113.9% year on year. Its total seats increased by 100.5%, while the total number of departures increased by 101.5% year on year. In addition, the company Resumes its regular activities In Asuncion, the capital of Paraguay. GOL has three weekly flights from Sao Paulo and 420 seats per week.
In addition, GOL makes an expectation EBITDA margin 11% for first quarter of 2022, Its negative 15.9% indicates a significant increase over the previous year margin, while its passenger unit revenue is forecast to increase by 45% per annum. However, the company expects a loss of approximately R $ 1.98 per share and an estimated loss of 7 0.78 per ADS. But GOL’s stock prices fell 13.8% last year and 1.4% in the last six months. Last month, the stock rose 18% year-to-date and 37.3% to close at 14 7.14 in yesterday’s trading session. Also, the 12-month median price target of $ 8.50 indicates a 19.1% potential uptrend.
Here’s how to shape GOL’s performance in the near future:
Decent finances
For the fiscal quarter of 2021, GOL’s net operating revenue grew 54.5% year on year to R $ 2.92 billion ($ 621.57 million). The company’s consistent EBITDA and adjusted EBIT increased 88.4% and 146.9% to R $ 1.05 billion ($ 223.78 million) and R $ 856.60 million ($ 182.20 million) from the previous quarter, respectively.
Mixed analyst feeling
For the fiscal quarter ending March 31, 2022, GOL’s EPS is expected to grow 96.1% year-over-year, with its revenue expected to grow 112.9% year-on-year to $ 610.87 million. And for the fiscal quarter ending June 30, 2022, analysts expect the company’s revenue to grow 226.8% over the same period last year to $ 634.68 million. However, its EPS for the same quarter is expected to decline by 185.2% year on year.
Also, among the three Wall Street analysts who gave GOL ratings, Rate it for twoWhen someone rated to buy it.
Mixed assessment
In terms of its forward EV / sales, GOL is currently trading at 2.04x, up 24.2% from the 1.65 industry average. In contrast, the stock’s 0.48 forward price / sales multiple is currently trading 63.4% lower than the 1.30 industry average.
POWR rating
GOL has an overall C rating, which is equal to the neutrality we own POWR rating Method. POWR ratings are calculated taking into account 118 individual factors, each factor weighing to an optimal degree.
GOL has a value grade C, consistent with its mixed evaluation.
The stock has a D grade for stability, which is justified by its 1.56 five year monthly beta.
In the 31-stock, F-rated airlines industry, GOL ranks # 21. Click here View additional POWR ratings for GOL (Growth, Momentum, Sentiment, and Quality).
View all top-rated stocks in the airlines industry Here.
The last row
GOL is expanding its operations as Kovid-19-related restrictions are relaxed, which is evident in its solid top-line growth. However, the company expects its EPS to remain negative for the quarter ending March 31, 2022, and indicating its high beta volatility, we think it may be wise to wait for better entry into the stock.
GOL shares were unchanged in pre-market trading on Tuesday. Year-to-date, GOL rose 18.02% over the same period as the benchmark S&P 500 Index rose -6.11%.
About the author: Anushka Dutt
Anushka is an analyst whose interest in understanding the impact of major economic changes in the financial markets has inspired her to pursue a career in investment research.
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