A Look At Frontier Group Holdings (ULCC) Valuation After James Dempsey’s Appointment As Permanent CEO

Leadership transition at Frontier Group Holdings

Frontier Group Holdings (ULCC) has formally appointed James G. Dempsey as Chief Executive Officer and President, transitioning him from his interim CEO role and adding him to the Board, a move that clarifies long term leadership.

See our latest analysis for Frontier Group Holdings.

The leadership news lands as Frontier’s share price sits at US$5.27, with a 29.17% 90 day share price return and a 15.32% year to date share price return. The 1 year total shareholder return of 38.58% and 3 year total shareholder return of 56.73% indicate that longer term holders have faced pressure despite more recent momentum.

If this leadership change has you looking beyond airlines, it could be a good moment to widen your search with aerospace and defense stocks as another pocket of the transportation and travel space to consider.

With the stock at US$5.27, trading close to analyst targets and supported by recent revenue growth but a US$137 million net loss, the question is whether Frontier is still undervalued or if the market is already pricing in any future recovery.

Most Popular Narrative: 7% Undervalued

With Frontier Group Holdings last closing at US$5.27 and the most followed narrative pointing to a fair value of US$5.67, the gap between market price and implied value is modest but clear, and it all hinges on what future revenue, margins and earnings could look like under current assumptions.

• The expansion of premium product offerings (e.g., first-class seating, UpFront Plus), increased loyalty cardholder engagement, and enhanced ancillary service monetization are driving higher non-fare revenue per passenger, supporting both top-line growth and margin expansion over the medium term.

Read the complete narrative.

Curious what kind of revenue climb, margin shift and earnings profile would need to line up to support that fair value gap and the implied future earnings multiple? The full narrative spells out those projections in detail and shows how they connect back to today’s share price.

Result: Fair Value of $5.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on leisure demand holding up and on Frontier successfully absorbing fixed costs tied to surplus crews and underused aircraft, which could otherwise pressure margins.

Find out about the key risks to this Frontier Group Holdings narrative.

Build Your Own Frontier Group Holdings Narrative

If the fair value story here does not quite fit how you see Frontier, you can run the numbers yourself, stress test the assumptions and then Do it your way in just a few minutes.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Frontier Group Holdings.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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