Skywest IncSKYW · Nasdaq

Why the market may be pricing it low

• On most routes major partners set pricing, schedules and seat inventories while SkyWest merely operates the flights for a fixed fee.

  the major airline partner controls scheduling, ticketing, pricing and seat inventoriesBusiness

• About 44% of contracted aircraft fly for United alone, making results highly exposed to one partner's decisions.

  approximately 44.4% of our aircraft in scheduled service or under contract were operated for UnitedMD&A

What could close the gap

• If management's stated goal of improving profitability via dual-class fleet upgrades shows up in results, it could prompt a re-rating.

  Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraftMD&A

How a buyer could still lose (value trap)

• With $2.3B in borrowings against just $345M cash, enterprise value is 1.5x market cap; the leverage behind the seemingly safe fixed-fee model could surface as fragility.

  Based on the figures below

• The number of aircraft under contract fell from 492 to 487 year over year, hinting the contracted fleet base is shrinking even as revenue grows.

  the number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements decreased from 492 as of December 31, 2024, to 487 as of December 31, 2025MD&A

Financial quality (Piotroski F-score)

• ✓Profitable (ROA > 0)
• ✓Positive operating cash flow
• ✓ROA up on last year
• ✓Cash flow exceeds net profit
• ✓Leverage down on last year
• ✗Current ratio up on last year
• ✓No new shares issued
• –Gross margin up on last yearno data
• –Asset turnover up on last yearno data

Scored out of the checks with data, scaled to 9. Compares the latest year with the year before.

Figures

Sales

$3.0bn

Operating profit

$588m

Net profit

$410m

Operating cash flow

$949m

Cash

$345m

Debt

$2.3bn

Equity

$2.8bn

Latest twelve months to 2026-06-30; F-score for the fiscal year to 2025-12-31