Mesa Air Intrinsic Value Calculation – MESA AIR Group,: Bankruptcy Not Inevitable Despite Pricing Errors

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MESA AIR ($NASDAQ:MESA) Group, Inc., commonly known as Mesa Air, is an American regional airline based in Phoenix, Arizona. Despite their success in the industry, Mesa Air recently fell under scrutiny for alleged pricing errors that have caused them to be inaccurately priced for bankruptcy.

However, despite the pricing errors, Mesa Air has made several changes to their business model in order to ensure that a bankruptcy is not inevitable. The airline has been able to reduce their debt in recent years and have seen increased revenue and a decrease in operational costs due to their efforts to become more financially efficient. Furthermore, Mesa Air has been able to secure new and more lucrative contracts with major airlines that have enabled them to generate more profits. Mesa Air has also increased its liquidity and strengthened its balance sheet by liquidating assets that were not related to the core operations of the airline. This has enabled them to have better access to cash which can then be used to pay off debts and cover other expenses. In addition to these measures, Mesa Air has implemented cost-cutting measures that have helped them reduce their expenses and make their operations more efficient. Overall, despite the pricing errors that have put Mesa Air at risk of bankruptcy, the airline is taking proactive steps to ensure that a bankruptcy is not inevitable. Through a combination of asset liquidation, cost-cutting, and new contracts with major airlines, Mesa Air is well-positioned to remain financially solvent in the future.

Stock Price

MESA AIR Group, Inc., the holding company of Mesa Airlines, Inc., has recently been in the news as their stock closed at $0.8 on Friday, a 8.3% rise from last closing price of 0.7. Despite the recent pricing errors, bankruptcy for MESA AIR is not yet inevitable. The pricing errors were attributed to the accelerated pricing structure of the stock, which saw an increase in short-term trading activity. Consequently, the stock prices rapidly shifted causing confusion in the market.

The company’s management has since undertaken steps to prevent any further mishaps such as issuing corrections to investors and suspending trading of its stock. Furthermore, they have also taken steps to address long-term financial issues by refinancing debt and improving their liquidity position. Through their proactive steps, they have been able to reassure their investors and maintain a healthy liquidity position. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Mesa Air. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Mesa Air. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Mesa Air. More…

Key Ratios Snapshot

Some of the financial key ratios for Mesa Air are shown below. More…

Analysis – Mesa Air Intrinsic Value Calculation

GoodWhale recently conducted a thorough analysis of MESA AIR‘s wellbeing and our proprietary Valuation Line has calculated the intrinsic value of MESA AIR share to be around $2.3. Currently, MESA AIR stock is being traded at $0.8, which means it is undervalued by 65.6%. This presents a great opportunity for investors looking to buy MESA AIR and reap the benefits of a potential return on investment. More…

Peers

Mesa Air Group Inc. is an American regional airline company based in Phoenix, Arizona. They provide scheduled passenger and cargo services in North America, as well as in the Caribbean and Pacific region. Mesa Air Group Inc. faces competition from Norwegian Air Shuttle ASA, T’way Air Co Ltd, and Sun Country Airlines Holdings Inc, all of which are established players in the aviation industry and provide similar services to Mesa Air Group Inc.

– Norwegian Air Shuttle ASA ($LTS:0FGH)

Norwegian Air Shuttle ASA is one of the largest airlines in Europe and the ninth largest low-cost airline in the world. As of 2023, the company has a market cap of 10B and an impressive return on equity of 27.16%. Norwegian Air Shuttle ASA is a low-cost carrier that provides short-haul and long-haul flights, as well as charter services to and from European and North African countries. The company was founded in 1993 and has grown to become one of the most successful airlines in Europe, offering competitive pricing and a vast network of flights. The airline’s market cap reflects its continued success and strong financial performance.

– T’way Air Co Ltd ($KOSE:091810)

T’way Air Co Ltd is a Korean air transport company that provides domestic and international air transport services. With a market cap of 696.24B as of 2023, the company is doing well financially. However, its Return on Equity of -163.16% is concerning, which indicates that its investments are not generating sufficient returns. The company should look into its investment strategies to increase its Return on Equity and strengthen its financial position in the long run.

– Sun Country Airlines Holdings Inc ($NASDAQ:SNCY)

Sun Country Airlines Holdings Inc is an airline holding company that provides air transportation services. The company is headquartered in Minnesota, United States and currently has a market capitalization of 1.16 billion dollars as of 2023. Sun Country Airlines also boasts a Return on Equity of 6.87%, which is fairly higher than most of its peers. This indicates that the company has managed to generate a good amount of profit from its invested capital. Sun Country Airlines operates over 130 flights per day and serves more than 80 destinations around the world.

Summary

Analysts believe that this increase in stock price may have been due to the potential for some investors to see a potential upside from Mesa’s restructuring plan. As a result, many investors are now looking at Mesa as a potential investment opportunity, despite its current bankruptcy status. Investors should be aware of the risks involved in investing in a company currently undergoing bankruptcy proceedings, however, and should be mindful of any potential hidden liabilities that may arise from Mesa’s bankruptcy proceedings.