Critical Review: Controladora Vuela Compania de Aviacion (NYSE:VLRS) versus Cebu Air (OTCMKTS:CEBUY)

Controladora Vuela Compania de Aviacion (NYSE:VLRS) and Cebu Air (OTCMKTS:CEBUY) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, dividends and analyst recommendations.

Institutional & Insider Ownership

53.3% of Controladora Vuela Compania de Aviacion shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Controladora Vuela Compania de Aviacion and Cebu Air, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Controladora Vuela Compania de Aviacion	2	5	4	0	2.18
Cebu Air	0	0	0	0	0.00

Controladora Vuela Compania de Aviacion currently has a consensus price target of $9.42, indicating a potential upside of 21.03%. Given Controladora Vuela Compania de Aviacion’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Controladora Vuela Compania de Aviacion is more favorable than Cebu Air.

Valuation & Earnings

This table compares Controladora Vuela Compania de Aviacion and Cebu Air”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Controladora Vuela Compania de Aviacion	$3.04 billion	0.30	-$103.87 million	($1.64)	-4.75
Cebu Air	N/A	N/A	N/A	$15.90	0.16

Cebu Air has lower revenue, but higher earnings than Controladora Vuela Compania de Aviacion. Controladora Vuela Compania de Aviacion is trading at a lower price-to-earnings ratio than Cebu Air, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Controladora Vuela Compania de Aviacion and Cebu Air’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Controladora Vuela Compania de Aviacion	-5.71%	-93.91%	-3.29%
Cebu Air	N/A	N/A	N/A

About Controladora Vuela Compania de Aviacion

Controladora Vuela Compañía de Aviación, S.A.B. de C.V., through its subsidiary, Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., provides air transportation services for passengers, cargo, and mail in Mexico and internationally. The company operates approximately 590 daily flights on routes connecting 43 cities in Mexico, 22 cities in the United States, 4 cities in Central America, and 2 cities in South America. As of December 31, 2022, it leased 116 aircrafts and 23 spare engines. The company also offers merchandising, travel agency, and loyalty program, as well as specialized and aeronautical technical services. Controladora Vuela Compañía de Aviación, S.A.B. de C.V. was incorporated in 2005 and is headquartered in Mexico City, Mexico.

About Cebu Air

Cebu Air, Inc., an airline, provides international and domestic air transportation services. The company offers scheduled air travel services to passengers, as well as airport-to-airport cargo services on its domestic and international routes. It also provides ancillary services, such as cancellation and rebooking options; in-flight merchandising, including sale of duty-free products on international flights; baggage services; and travel-related products and services. In addition, the company offers line maintenance services comprising certification and mechanic assistance; technical ramp, equipment handling; water and toilet servicing; aircraft ground support equipment operation; and light maintenance aircraft checks services. As of December 31, 2023, it operated a fleet of 85 aircrafts. The company was incorporated in 1988 and is headquartered in Pasay City, the Philippines. Cebu Air, Inc. is a subsidiary of CP Air Holdings, Inc.