SkyWest, Inc.’s SKYW shares had an unimpressive run over the past six months. Shares of the company have plunged 8.3% in the same period, underperforming the Transportation - Airline industry’s 2% fall and the S&P 500’s 4.7% decline.
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Given the unimpressive price performance, let's take a deeper dive into the factors driving this transportation stock’s decline. In this write-up, we assess whether SKYW, which currently carries a Zacks Rank #3 (Hold), is likely to suffer more going forward.
Surging expenses and weak liquidity are key factors weighing on the outlook of SkyWest. Profitability is being pressured as total operating expenses increased 13.4% year over year at the end of 2025, primarily driven by a 15% increase in block hour production. Costs are likely to remain elevated throughout 2026, hurting the bottom line. As capacity expansion is being undertaken, cost burdens are being intensified, thereby limiting margin improvement.
Liquidity concerns are being reinforced by the company’s persistently weak and volatile current ratio. A decline from 1.04 in 2020 to 0.89 in 2021 was followed by a temporary recovery to 1.17 in 2022, after which the ratio was reduced again to 0.90 in 2023, 0.78 in 2024 and 0.65 in 2025. Through this trend, sustained pressure on the company’s ability to meet short-term obligations is being indicated, raising concerns about financial flexibility.
Operations are being affected by a challenging macroeconomic environment. Economic uncertainty, evolving tariff policies and heightened geopolitical tensions are elevating operational and compliance risks. Under such conditions, investments are being delayed, forecasts are being reassessed and increased agility is being required, adding further uncertainty to its performance in the current year.
SKYW’s Estimate Revisions Continue Heading South
Driven by the aforementioned headwinds, the Zacks Consensus Estimate for the March- quarter earnings has been revised 10.6% downward over the past 60 days and is pegged at $2.19 per share. Meanwhile, on a year-over-year basis, earnings for the first quarter of 2026 have been revised downward by 9.5%.
Stocks to Consider
Investors interested in the Zacks Transportation sector may consider Seanergy Maritime Holdings SHIP and Air Lease AL.
SHIP currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Seanergy Maritime has an expected earnings growth rate of 53.13% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 76.43%.
AL currently carries a Zacks Rank #2 (Buy).
AL has an expected earnings growth rate of 14.1% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in three of the trailing four quarters and missed once in the remaining, delivering an average beat of 14.58%.
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Air Lease Corporation (AL): Free Stock Analysis Report
SkyWest, Inc. (SKYW): Free Stock Analysis Report
Seanergy Maritime Holdings Corp (SHIP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).