SKYW: Hold
Published 16 Sep 2026, 12:49 BST. This is the frozen version, not the current recommendation.
Why this assessment was issued
First recorded assessment.
Neither a positive nor a negative classification meets the stated requirements. Review price and return, downside balance, business evidence, earnings support.
Supporting evidence
More cash remains for each dollar of profit
Cash after capital spending / profit: 1.3× for SKYW, against 0.3× across 7 comparable peers.
Borrowing is lower relative to earnings
Net debt / EBITDA: 2.3× for SKYW, against 4.3× across 12 comparable peers.
Opposing evidence
The profit margin narrowed
The latest quarterly operating margin was 14.1%, -2.3 percentage points from a year earlier. Compare the sales and margin contributions below.
Year-to-date profit is lower
Across 2 completed quarters since 2025-12-31, net income was 202.4m versus 220.8m in the matching prior-year periods (USD). Check whether the latest quarter changes that direction.
The original scenarios
| Scenario | Sales growth | Profit margin | Model value |
|---|---|---|---|
| Weaker | -0.3% | 3.6% | $25.65 |
| Central | 7.7% | 7.0% | $90.77 |
| Stronger | 15.7% | 10.3% | $205.52 |
Method: Earnings and historical valuation. A sufficiently complete, positive earnings record allows the stock's own P/E history to be used. These scenarios are not probability intervals.
Original assumptions and checks
| eps | 10.06 |
|---|---|
| cash | 81407000.0 |
| debt | 2296458000.0 |
| years | 1.212867898699521 |
| growth | 7.6521664350744025 |
| margin | 9.781913532872858 |
| profit | 409906000.0 |
| cash_ok | True |
| debt_ok | True |
| growths | [15.035616234254245, 8.480392883539011, 6.823939986609795, 6.522627404424353] |
| revenue | 4190448000.0 |
| downside | 73.32265164655462 |
| leverage | 2.3182817688867585 |
| multiple | 11.607551487414188 |
| free_cash | 519885000.0 |
| buy_hurdle | 21.02545444870144 |
| volatility | 32.05090889740288 |
| history_end | 2026-09-11 |
| reward_risk | 0.0 |
| annual_years | 5 |
| usable_weeks | 137 |
| history_start | 2023-09-15 |
| history_weeks | 157 |
| financial_date | 2026-06-30 |
| interest_cover | 5.86964813483505 |
| operating_cash | 948620000.0 |
| uncapped_growth | 7.6521664350744025 |
| current_multiple | 9.55666003976143 |
| projected_margin | 6.953060528711668 |
| historical_margin | 4.124207524550478 |
Recent price · Passed. Weekly close dated 2026-09-11.
Suitable business model · Passed. Keep weak and strong years in the record and value cash flow across the cycle. Peak earnings alone are not a target basis.
Four quarters · Passed. Four quarters ending 2026-06-30.
Current financials · Passed. Statements through 2026-06-30; factor prices dated 2026-09-11.
Annual record · Passed. 5 consecutive annual profit margins, including loss years.
Comparable earnings history · Passed. P/E is usable in 137 of 157 weeks. At least 52 usable weeks and 70% coverage are required; excluding too many loss or missing weeks would bias the target.
Earnings and price dates · Passed. Earnings-release EPS $10.06, for four quarters ending 2026-06-30.
Price risk · Passed. Risk uses the latest 52 weekly price changes.
Comparable sales growth · Passed. Growth uses the median of four quarterly year-on-year comparisons.
Positive statement earnings · Passed. Trailing statement profit is positive.
Earnings reconciliation · Passed. Release EPS is $10.06; statement-derived EPS is $10.56. The difference is within the 5% review threshold; this does not prove there are no unusual items.
Statement totals · Passed. The latest four quarters agree with the trailing snapshot within 5%.
Cash and borrowing · Passed. Cash generation, debt and interest-cover figures are available.
Target publication review · Passed. The model estimate is within SM's automatic publication range of one quarter to four times the current price. This is a review threshold, not evidence that the market price is correct.
Policy sm-review-2-research · Model sm-assessment-13-assumption-review · Data f96813a90ccf.