Breaking Down Sun Country Airlines Holdings, Inc. (SNCY) Financial Health: Key Insights for Investors

You're looking at Sun Country Airlines Holdings, Inc. (SNCY) and seeing a low-cost carrier, but the real story is their strategic pivot, and that's where the investment opportunity sits. Honestly, the company has defintely moved past being just a passenger airline; they are a hybrid model now, which is why they hit their thirteenth consecutive profitable quarter in Q3 2025. You need to focus on the cargo segment, which drove a 51% year-over-year surge in Cargo revenue, reaching $44.0 million in the third quarter. This diversification is critical for stability, especially as the full-year 2025 revenue is forecasted to hit approximately $1.12 billion. That cargo and charter business accounts for nearly 40% of their total revenue, cushioning the volatility of the scheduled passenger service. The market sees this, too: analysts have a consensus price target around $19.43, suggesting a significant upside from current levels. So, let's break down the financials to see if that projected $1.03 in full-year 2025 Earnings Per Share (EPS) is a solid floor or a launching pad.

Revenue Analysis

You're looking at Sun Country Airlines Holdings, Inc. (SNCY) because its diversified business model-mixing scheduled passenger service with robust charter and cargo operations-offers a unique hedge in the volatile airline industry. The direct takeaway for 2025 is that while total revenue growth is steady, the composition is shifting dramatically: Cargo revenue is the primary engine of growth, surging by over 50% in the third quarter alone, which is offsetting a planned reduction in scheduled passenger capacity.

For the trailing twelve months (TTM) ending September 30, 2025, Sun Country Airlines Holdings, Inc. reported total revenue of approximately $1.11 Billion, representing a 4.27% year-over-year increase. This growth rate is slower than the high double-digit increases seen in the post-pandemic recovery years of 2021-2023, but it shows a deliberate, profitable expansion, marking the company's thirteenth consecutive profitable quarter. The full-year 2025 consensus revenue estimate sits slightly higher at $1.14 Billion.

The company's revenue streams break down into three primary segments: Scheduled Service (including ancillary revenue), Charter Service, and Cargo Service. This diversification is the core of their strategy, limiting exposure to fuel price volatility and seasonal passenger demand.

• Scheduled Service: The largest segment, but capacity is intentionally down.
• Charter Service: A stable, growing source, up 15.6% in Q3 2025 to $58.7 million.
• Cargo Service: The fastest-growing segment, primarily driven by the Amazon contract.

Here's the quick math on the revenue contribution for the third quarter of 2025, which totaled $255.5 million:

Scheduled Service ASMs (Available Seat Miles) actually decreased 10.2% year-over-year in Q3 2025, but a 1.6% increase in scheduled service TRASM (Total Revenue per Available Seat Mile) helped mitigate the capacity cut.

The most significant change is the completion of the cargo segment transformation. By September 2025, Sun Country Airlines Holdings, Inc. had fully deployed its entire fleet of 20 freighter aircraft for Amazon, which is a 14% expansion in total operating aircraft compared to the start of the year. This strategic pivot means the company is deliberately pulling back on some scheduled service flights-scheduled service block hours decreased 10.9% in Q3 2025-to allocate resources to the higher-growth, contracted cargo business. This is a temporary, but defintely notable, shift in resource allocation that underpins the stability of their earnings power. You can read more about this strategic shift in the context of overall financial health at Breaking Down Sun Country Airlines Holdings, Inc. (SNCY) Financial Health: Key Insights for Investors.

So, the near-term risk is lower scheduled passenger capacity, but the opportunity is the predictable, high-growth revenue from the fully deployed cargo fleet. The company anticipates a return to scheduled service growth in the second half of 2026, once the cargo segment is fully annualized.

Profitability Metrics

You want to know if Sun Country Airlines Holdings, Inc. (SNCY) is a lean, mean profit machine, and the 2025 numbers show a story of seasonal strength and a strategic shift. The direct takeaway is this: SNCY's diversified model delivered a strong year-to-date net margin of 5.3%, outperforming the global airline industry's expected 3.6% net margin for 2025, but its profitability is clearly softening as the year progresses due to a strategic pivot.

Here's the quick math on the first nine months of 2025. Sun Country Airlines Holdings, Inc. generated $845.81 million in total revenue, translating to a net income of $44.66 million. That 5.3% net profit margin (Net Income / Total Revenue) is solid, especially compared to the global airline industry's projected margin of 3.6%.

Gross, Operating, and Net Margins

Since Sun Country Airlines Holdings, Inc. is a low-cost carrier (LCC), the operating margin is your best indicator of core efficiency. For the first three quarters of 2025, the operating margin showed a sharp decline, which is the key trend to watch:

• Q1 2025 Operating Margin: 17.2%
• Q2 2025 Operating Margin: 6.2%
• Q3 2025 Operating Margin: 3.9%

This drop is significant. The Q1 margin of 17.2% is exceptional, far exceeding the North American carrier EBIT margin forecast of 11% for 2025. But the Q3 margin of 3.9% is much closer to the global average and shows the impact of the company's current strategic choices. What this estimate hides is the seasonality; Q1 is historically strong for leisure carriers. Still, the trend is defintely downward quarter-over-quarter.

For a proxy on gross profitability, we look at the last full year: the 2024 Gross Profit was $512 million on $1,076 million in revenue, yielding a Gross Margin of roughly 47.6%. This high margin is typical for an LCC that successfully unbundles its fares and generates significant ancillary revenue.

Profitability Trends and Industry Standing

Sun Country Airlines Holdings, Inc. has achieved its thirteenth consecutive profitable quarter as of Q3 2025. That's a testament to its diversified model, but the margins are getting thinner. The Q3 2025 net income of just $1.6 million is a 33.7% decrease from the prior year's Q3.

When you compare the profitability ratios, the picture is complex:

SNCY's year-to-date operating margin of approximately 9.7% is better than the overall US airline average of 7.6% in Q2 2025. Crucially, it is miles ahead of the -3% operating margin reported by North American low-cost carriers in Q1 2025. This shows the power of the high-margin cargo and charter segments offsetting passenger softness. You can dive deeper into the business model here: Exploring Sun Country Airlines Holdings, Inc. (SNCY) Investor Profile: Who's Buying and Why?

Operational Efficiency and Cost Management

The main driver of the declining margins is a strategic, costly shift. Sun Country Airlines Holdings, Inc. completed the full deployment of 20 freighter aircraft for Amazon by September 2025. This cargo expansion is a huge growth driver-cargo revenue was up 50.9% year-over-year in Q3 2025. But, it forced the company to reduce its scheduled passenger service, with available seat miles (ASMs) declining 6.2% in Q2 2025.

This strategic trade-off has pushed up costs. Adjusted Cost per Available Seat Mile (CASM) ex-fuel-a key efficiency metric-increased by 11.3% in Q2 2025 year-over-year. Management expects this elevated CASM to persist until the latter half of 2026 as they annualize the cargo growth and then resume scheduled passenger service expansion. The near-term risk is that the high costs eat into the net profit too quickly, but the long-term opportunity is a more resilient, diversified revenue stream.

Debt vs. Equity Structure

You need to know how Sun Country Airlines Holdings, Inc. (SNCY) pays for its growth, and the simple answer is: a calculated mix, but with a heavier lean on debt. This isn't necessarily a bad thing for an asset-heavy business like an airline, but it does amplify risk if revenue stalls. As of the 2025 fiscal year, the company's total debt load-combining short-term liabilities and long-term commitments-sits around $850 million.

Here's the quick math on their financing structure. The company's Debt-to-Equity (D/E) ratio is currently sitting at about 2.13. This ratio, which tells us how much debt is used to finance assets compared to shareholder equity, is higher than the typical airline industry average, which we see closer to 1.8 for similar-sized carriers. That higher number means SNCY is using more borrowing to fund its fleet and operational expansion than its own capital. It's a defintely aggressive growth strategy.

To be fair, a lot of this debt is tied to aircraft financing, which is standard practice. The total debt breaks down roughly into:

• Long-term Debt: $780 million (mostly aircraft mortgages).
• Short-term Debt: $70 million (operational lines and current portions of long-term debt).

This debt structure reflects the company's focus on asset-light operations where possible, but still requires significant capital for owned aircraft and infrastructure. You can see their strategic focus on efficient operation in their Mission Statement, Vision, & Core Values of Sun Country Airlines Holdings, Inc. (SNCY).

Looking at recent activity, SNCY has been smart about managing its existing debt. In Q1 2025, the company completed a refinancing of an existing term loan, securing a new facility of $150 million at a more favorable interest rate. This move didn't increase the total debt significantly, but it did improve the company's credit profile and cash flow management, which is a key action when you're carrying a D/E ratio above the peer average.

The balance is clear: SNCY uses debt to fuel faster expansion and capitalize on market opportunities, especially in the charter and cargo segments. But still, a higher D/E ratio means a bigger interest expense bite out of earnings, and less cushion if the economy or travel demand slows down. Equity funding, which comes from retained earnings and stock issuances, has been a secondary, though consistent, source of capital to maintain a manageable, if leveraged, balance sheet.

Liquidity and Solvency

You want to know if Sun Country Airlines Holdings, Inc. (SNCY) has enough cash to cover its near-term bills, and the simple answer is nuanced, as it is with most airlines. If you look only at the classic liquidity ratios, the picture looks tight, but the cash flow tells a better story.

As of the most recent quarter, the company's Current Ratio sits at about 0.76, and the Quick Ratio is around 0.60. A ratio below 1.0 means current liabilities (debts due within a year) are greater than current assets (cash, receivables, etc.). But for an airline, this is defintely not a red flag; it's the nature of the business.

The low ratio is largely driven by a high balance of Air Traffic Liabilities (ATLs), which is the industry term for unearned revenue-money from tickets you bought for a flight in the future. That cash is in the bank now, but it's technically a short-term liability until the flight happens. This is why you must look beyond the simple ratio.

• Current Ratio: 0.76 (Current Liabilities > Current Assets).
• Quick Ratio: 0.60 (A tight short-term position, typical for airlines).
• Total Liquidity: A strong $299 million as of September 30, 2025.

The working capital trend is seasonal, as CEO commentary noted, because those ATLs fluctuate with booking cycles, but the underlying cash generation is strong. Honestly, the real measure of liquidity here is cash flow and total liquidity, which is healthy at nearly $300 million.

Cash Flow: Where the Money is Moving

The cash flow statement for Sun Country Airlines Holdings, Inc. (SNCY) shows a business that is generating cash from its operations and is actively managing its capital structure.

Here's the quick math on the first nine months of 2025:

Operating Cash Flow (OCF) is robust, bringing in $78.2 million through September 30, 2025. Plus, the last twelve months' (LTM) Free Cash Flow (FCF) was an impressive $135 million, significantly exceeding their statutory profit. This is good cash conversion.

On the Investing side, the company spent $29.1 million on property and equipment in the first nine months, which is part of their strategic cargo fleet expansion. They expect total capital expenditures (CapEx) for the full year 2025 to be between $80 million and $90 million. This capital deployment is focused and tied to their long-term growth strategy.

In Financing activities, SNCY is active in managing its debt and returning capital. They closed a new $108 million term loan in Q3 2025, using $54 million to pay off a higher-rate loan and refinance aircraft. They also repurchased $20 million in stock year-to-date, showing confidence in their valuation. The net debt position of $406 million as of September 30, 2025, is manageable relative to the cash flow generation.

Liquidity Strengths and Actionable Insight

The primary liquidity strength is SNCY's ability to generate significant cash from operations, a hallmark of their hybrid business model that balances scheduled service, charter, and cargo operations. You can read more about their strategy in their Mission Statement, Vision, & Core Values of Sun Country Airlines Holdings, Inc. (SNCY).

The low current and quick ratios are a structural feature, not a sign of distress, because the business is cash-positive. The key action for investors is to prioritize the Free Cash Flow and Total Liquidity figures over the static balance sheet ratios. The company has financial flexibility, evidenced by the opportunistic debt refinancing and the share buybacks. The risk to watch is any unexpected surge in maintenance costs, which increased 13.5% year-over-year in Q3 2025 due to unplanned events, which could temporarily pressure operating cash flow.

Valuation Analysis

You're looking at Sun Country Airlines Holdings, Inc. (SNCY) and wondering if the market has it right. The quick answer is that the stock looks undervalued based on core metrics, but you need to understand why the market price is still lagging. The analyst consensus is a clear 'Buy,' but the stock has been a tough hold this year.

Here's the quick math on why a seasoned analyst sees a discount. The company's valuation ratios for the 2025 fiscal year are compellingly low, especially when compared to the broader Industrials sector average. This suggests the market is pricing in near-term risks-like competitive pressures or execution risk on their cargo expansion-more heavily than the potential for future earnings growth.

• The trailing twelve-month (TTM) Price-to-Earnings (P/E) ratio is around 11.05 to 11.58 as of November 2025, which is a significant discount to the Industrials sector average of roughly 25.79.
• The Price-to-Book (P/B) ratio sits at a low 0.98. A P/B ratio under 1.0 often signals a stock is undervalued, meaning the market values the company for less than its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) is between 4.90 and 5.19. This is a very attractive multiple in the airline industry, indicating strong cash flow relative to its total enterprise value (market cap plus net debt).

This is a classic value-trap signal, but the underlying fundamentals look solid.

The stock price trend over the last 12 months tells a story of volatility and investor skepticism. The 52-week range has been wide, moving from a low of $8.10 to a high of $18.59. As of mid-November 2025, the stock price is sitting around $11.76. To be defintely fair, the stock price has decreased by nearly 19.68% over the last 52 weeks, and it was down 14.8% in 2025 alone. That's a brutal run, but it's what creates the current valuation opportunity.

When it comes to shareholder returns, remember that Sun Country Airlines Holdings, Inc. is a growth-focused airline, not an income stock. They do not currently pay a dividend, so the dividend yield and payout ratio are 0.00%. All capital is being reinvested into fleet expansion and the high-margin cargo business, which is the right move for a company focused on long-term growth and margin expansion.

The Wall Street consensus is overwhelmingly positive, despite the recent price action. The average analyst price target is in the range of $18.13 to $19.43. With the stock trading around $11.76, that implies an upside of 63.08% to 71.48%. The consensus rating is a 'Buy' or 'Moderate Buy' from the 9 analysts covering the stock, with 6 'Buy' ratings, 2 'Hold' ratings, and only 1 'Sell' rating. This strong analyst support is a key signal that the current price is a disconnect, not a fair reflection of their 2025 earnings power and future potential.

For a deeper dive into the operational side-like the impact of their cargo contracts and passenger yield performance-check out the full post: Breaking Down Sun Country Airlines Holdings, Inc. (SNCY) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at Sun Country Airlines Holdings, Inc. (SNCY) and seeing a profitable, diversified model, but you need to map the near-term risks. The biggest takeaway for 2025 is this: While the cargo segment is a powerhouse, it's creating a cost friction that's dragging on the core passenger business.

The company is definitely navigating a tough external environment, still dealing with the fallout of overcapacity in the domestic leisure market. This competition, mainly from peers like Spirit and Frontier, continues to pressure pricing power, even as SNCY strategically pulled back scheduled service capacity. For example, scheduled service Available Seat Miles (ASMs) decreased by 10.2% in the third quarter of 2025 to support cargo growth, but Scheduled Service Total Revenue per Available Seat Mile (TRASM) only increased by 1.6% year-over-year, showing how hard it is to push unit revenue in this market. Fuel costs are still a volatile wildcard.

Internally, operational and financial risks are clear in the 2025 numbers. The rapid expansion of the cargo fleet-now at 20 freighter aircraft fully deployed for Amazon as of September 2025-is a strategic win, but it creates staffing and cost headaches. You can see this tension in the Q2 2025 financials:

• Salaries, Wages, and Benefits: Increased by 13% in Q2 2025 due to headcount growth and contractual increases.
• Maintenance Costs: Unplanned maintenance events drove a 13.5% year-over-year increase in maintenance expense in Q3 2025.
• Pilot Utilization: The need to hire pilots for the growing cargo fleet led to temporary pilot surpluses and cost headwinds, as aircraft induction timing varied. That's a defintely a classic growth pain point.

Here's the quick math on the financial health: as of September 30, 2025, Total Liquidity was a solid $299 million, but Net Debt stood at $406 million. While the debt-to-EBITDA ratio seems reasonable, the company's ability to convert earnings into cash is still weaker than you'd want, with free cash flow historically translating to only about 38% of its Earnings Before Interest and Taxes (EBIT). That weak cash conversion makes managing that debt load a continuous priority.

The core mitigation strategy is simply the hybrid business model, which is working. The strength of the Cargo and Charter segments is designed to offset scheduled service weakness. Cargo revenue, for instance, grew by a massive 50.9% in Q3 2025, hitting $44 million, driven by the full fleet deployment and new Amazon contract rates. This diversification is why, even with these cost pressures, SNCY reported its thirteenth consecutive profitable quarter in Q3 2025, with an Adjusted Diluted EPS of $0.07 on $255.5 million in revenue. The management is also returning value, completing $10 million in stock repurchases during Q3 2025.

You can dive deeper into the full picture of the company's financial trajectory in Breaking Down Sun Country Airlines Holdings, Inc. (SNCY) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Sun Country Airlines Holdings, Inc. (SNCY) and seeing a low-cost carrier, but the real story is in its diversified model. The key takeaway for 2025 is that the massive cargo expansion is driving immediate revenue growth, even as scheduled passenger service takes a near-term dip to accommodate the fleet transition.

The company's ability to shift capacity between its three segments-Scheduled Service, Charter, and Cargo-is its primary competitive advantage, allowing it to reliably deliver profitability through different economic cycles. That flexibility is defintely a rare trait in the airline industry. This unique structure is what earned Sun Country Airlines Holdings, Inc. the worldwide Airline Industry Achievement Market Leader Award of 2025 from Aviation Week's Air Transport World.

Future revenue growth is heavily anchored in the cargo segment. The full-year 2025 consensus revenue estimate sits around $1.14 billion, with earnings per share (EPS) expected to be approximately $1.69. For context, analysts project annual earnings to surge by about 36.8%. Here's the quick math: the cargo segment's revenue was already up 50.9% year-on-year in Q3 2025, reaching $44 million, and this momentum is crucial for the full-year numbers.

The biggest growth driver is the strategic initiative to significantly expand the cargo fleet. This is not a small move; it involves an expanded agreement with Amazon, which extends the partnership through 2030 with options until 2037. This deal increased the number of dedicated Boeing 737-800 freighter aircraft from 12 to 20 by Q3 2025, a 66% jump in capacity. This huge shift meant a strategic, temporary reduction in scheduled service, with Q4 2025 available seat miles (ASMs) expected to decline between 8% and 9% year-over-year.

The diversified approach helps mitigate the volatility of the leisure travel market. While scheduled service is temporarily constrained, the Charter business remains robust, with revenue growing 15.6% in Q3 2025, driven by steady long-term contracts. Also, the company is focused on operational efficiency through product innovations like the launch of a new mobile app to enhance the customer experience. They are also expanding their operational footprint by launching a new pilot base outside of Minneapolis.

The company's competitive advantages position it well for sustained growth:

• Flexible Capacity Allocation: Quickly pivot aircraft between scheduled, charter, and cargo operations.
• Long-Term Cargo Contracts: Stability from the extended Amazon partnership through 2037.
• Cost-Efficient Operations: A low-cost carrier model that maintains industry-leading profitability.

What this estimate hides is the execution risk of integrating eight new freighter aircraft and training the associated crews, which can create transitional costs and uneven asset utilization in the near-term. Still, the long-term outlook remains strong, with a target of $1.5 billion in revenue and $300 million in EBITDA by 2027. You can find more details on their long-term vision in the Mission Statement, Vision, & Core Values of Sun Country Airlines Holdings, Inc. (SNCY).

Here is a summary of the 2025 analyst consensus for the full fiscal year:

Next step: Check the Q4 2025 guidance for any updates on the scheduled service capacity reduction, which will tell you how quickly the passenger segment is recovering from the cargo transition.