Cathay Pacific Airways (OTCMKTS:CPCAY) versus Frontier Group (NASDAQ:ULCC) Critical Review

Cathay Pacific Airways (OTCMKTS:CPCAYGet Rating) and Frontier Group (NASDAQ:ULCCGet Rating) are both mid-cap transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares Cathay Pacific Airways and Frontier Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cathay Pacific Airways N/A N/A N/A
Frontier Group -5.51% -45.52% -5.56%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Cathay Pacific Airways and Frontier Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cathay Pacific Airways 1 0 1 0 2.00
Frontier Group 0 0 8 0 3.00

Frontier Group has a consensus target price of $20.08, indicating a potential upside of 91.93%. Given Frontier Group’s stronger consensus rating and higher possible upside, analysts plainly believe Frontier Group is more favorable than Cathay Pacific Airways.

Insider & Institutional Ownership

99.5% of Frontier Group shares are owned by institutional investors. 85.8% of Frontier Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Cathay Pacific Airways and Frontier Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cathay Pacific Airways $5.86 billion 0.71 -$711.33 million N/A N/A
Frontier Group $2.06 billion 1.10 -$102.00 million ($0.62) -16.87

Frontier Group has lower revenue, but higher earnings than Cathay Pacific Airways.

Summary

Frontier Group beats Cathay Pacific Airways on 7 of the 11 factors compared between the two stocks.

About Cathay Pacific Airways (Get Rating)

Cathay Pacific Airways Limited, together with its subsidiaries, operates as a carrier of international passengers and air cargo. The company conducts airline operations principally to and from Hong Kong. It also provides property investment, travel reward program, travel tour operator, financial, aircraft leasing and acquisition facilitation, airline catering, information processing, aircraft ramp handling, laundry and dry cleaning, ground handling, aircraft engineering, cargo carriage, airport ground engineering support and equipment maintenance, and inventory technical management services. In addition, the company operates a computer network for interchange of air cargo related information; and offers repair and maintenance services for transportation companies. It operates in the Americas, Europe, Southeast Asia, Southwest Pacific, North Asia, South Asia, the Middle East, and Africa. As of December 31, 2021, it operated 234 aircraft directly connecting Hong Kong to 119 destinations in 35 countries worldwide, including 26 destinations in China. Cathay Pacific Airways Limited was founded in 1946 and is headquartered in Lantau Island, Hong Kong.

About Frontier Group (Get Rating)

Frontier Group Holdings, Inc., a low-fare airline company, provides air transportation for passengers. The company operates an airline that serves approximately 120 airports throughout the United States and international destinations in the Americas. It offers its services through direct distribution channels, including its website, mobile app, and call center. As of December 31, 2021, the company had a fleet of 110 Airbus single-aisle aircraft comprising, 16 A320ceos, 73 A320neos, and 21 A321ceos. Frontier Group Holdings, Inc. was incorporated in 2013 and is headquartered in Denver, Colorado.

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