Travel companies like Allegiant Travel were growing fast as the pandemic faded. The WHO on Saturday declared the Covid pandemic over, which should wedge the economy further open. Allegiant posted superb numbers the past few quarters and Allegiant stock got an upgrade Monday as its Relative Strength Rating climbed to 76.
Additionally, the Fed is likely done or nearly done raising interest rates that crimped the economy. The question now is: Will Allegiant be able to capitalize on all this good news and continue its recent growth spurt?
Allegiant Travel Key Metrics Rising
The raised 76 RS Rating means that Allegiant stock is performing in the top 25% of all stocks in terms of price performance. It's now a few points below a benchmark. Market research shows that the best stocks to buy and watch typically have an RS Rating north of 80 in the early stages of their moves.
Allegiant reported $3.04 earning per share last quarter, a powerful reversal from a 12-cent-per-share loss the same quarter a year ago. Meanwhile, its revenue shot up 30% to $649.7 million. The quarter before that, it posted a 169% jump in EPS on 23% higher sales.
Allegiant Travel is just below a buy range after breaking out past a 105.61 buy point in a cup without handle. The proper buying range extends to 5% above the initial entry. On Monday, Allegiant stock fell a bit more than 2% to 104.57.
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Other Key Ratings Up There Too
For its other key ratings, Allegiant Travel has an 88 Composite Rating, out of 99. That puts the Las Vegas-based travel company in the top 12% of stocks on a group of fundamental and technical metrics. Again, it's close but not in the top tier. Top stocks generally have a 90 or higher Composite. It has an 80 Earnings Per Share Rating and the travel group as a whole has a strong B Group Relative Strength Rating. Additionally, reflecting its improved but not yet great market position, Allegiant has a D+ Accumulation/Distribution Rating on an A+ to E scale. The D+ rating shows that institutions like insurance funds and mutual funds are selling more shares than buying. Look for that rating to improve to at least a C.
Allegiant Travel holds the No. 3 rank among its peers in the Transportation-Airline industry group. A pair of airlines take the No. 1 and 2 spots on the group's top-five highest-rated stocks list. Copa Airlines is No. 1 and Ryanair No. 2 on the list.
When considering what names to put on a watchlist, investors often look for stocks with an 80 or higher RS Rating.
IBD's unique Relative Strength Rating tracks share price movement with a 1 (worst) to 99 (best) score. The rating shows how a stock's price behavior over the trailing 52 weeks holds up against all the other stocks in our database.
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