Wheels Up (UP) Announced Record Revenue Q2 Growth of 113% - Time to buy?
Is it time to buy Wheels Up, an on-demand and membership aviation company that primarily serves members in the United States? Founded in 2013, the company has seen rapid growth and expansion while also quickly recovering from the pandemic.
Revenue increased 113% year-over-year to $285.6 million.
Active Members grew 47% year-over-year to 10,515 in total.
Live Flight Legs increased 146% year-over-year to 18,234 in total.
Net loss increased by $1.6 million year-over-year to $(29.0) million.
Adjusted EBITDA improved by $7.6 million year-over-year to $(8.5) million.
By: Allan R Kirby
Wheels Up (UP)
Dividend Rate ($0.00 per Quarter).
Yield (0.0%) *Wheels Up currently does not pay a dividend.
Wheels Up, possible opportunity?
Wheels Up Experience Inc. (Wheels Up), was founded as a leading demand generator in private aviation, that offers a total private aviation solution that includes world-class safety, service, and flexibility through on-demand flights and membership programs. The company recently completed its merger with Aspirational Consumer Lifestyle Corp. on July 13, 2021, with shares commencing trading on the New York Stock Exchange on July 14, 2021, under the "UP" ticker symbol. Since the merger shares have tanked to as low as $7.10 but their recent quarterly results were not all bad, and in fact, their results showed this could be a possible opportunity to buy into this company at a reasonable price.
Wheels Up Quarterly results
Second Quarter 2021 Highlights
Active Members grew 47% year-over-year to 10,515 driven by strong new member additions and Core membership retention as well as continued success converting legacy Wheels Up Private Jets LLC Jet Cardholders into Wheels Up Members.
Active Users grew 27% to 11,281 year-over-year primarily driven by the growth in Active Members.
Live Flight Legs increased by 146% year-over-year to 18,234 with strong flight demand across all cabin classes driven by the growth in Active Members and Active Users and the impact of COVID-19 on 2020 results. The acquisitions of Mountain Aviation, LLC and Wheels Up Private Jets LLC also contributed to the growth.
Revenue per Live Flight Leg increased 3% year-over-year to $11,663 as a result of a higher mix of larger cabin flying and partially offset by a decrease in average flight stage length.
Revenue increased 113% year-over-year driven by strong flight demand, the impact of COVID-19 on 2020 results, and recent acquisitions.
Adjusted EBITDA of $(8.5) million, improving $7.6 million year-over-year, due to operating leverage of the business.
"The accelerating growth in our revenue is a great way to mark our first reported results as a public company and creates a solid foundation to build upon," said Kenny Dichter, Wheels Up Chairman & CEO. "Our iconic brand, combined with our compelling membership model and exclusive partnerships and experiences, has uniquely positioned us to gain market share during this time of robust demand. As always, I want to recognize our hardworking team for their tireless efforts and thank our loyal Members and Customers for their trust in us."
"The demand in the first half of the year has increased across all cabin classes and our diverse fleet of aircraft is contributing to our success in attracting new members, retaining existing Members, and driving an increase in live flight legs," said Eric Jacobs, Wheels Up Chief Financial Officer. "Our strategic initiatives are resonating with Members and Customers, and we believe that our investments in operations, technology, product development, and customer service will help ensure a premium experience and drive future operating efficiencies."
Partnered with American Express as the exclusive private jet partner for the new American Express Premium Private Jet Program for all Platinum® Card Members.
Launched "UP for Business", a new customizable solution established within Wheels Up to meet the travel needs of corporate clients.
Added iconic luxury brands to the robust Member Benefits platform including Porsche Cars North America and Abercrombie & Kent, the world's leading luxury travel company.
Continued to build on the Company's technology capabilities with the conversion of Wheels Up's Mountain Aviation, LLC fleet onto the Avianis Flight Management System in June, providing the ability to better optimize supply.
Improved forecasting capabilities powered by machine learning, which facilitates the Company's ability to make short- and long-term commitments to secure supply.
Increased partnerships with third-party operators through Guaranteed Rate Programs (GRPs) to secure additional supply.
Other Recent Highlights
Completed merger with Aspirational Consumer Lifestyle Corp. on July 13, 2021, with shares commencing trading on the New York Stock Exchange on July 14, 2021 under the "UP" ticker symbol.
Continued to focus on diversity, equity and inclusion with C200, the preeminent organization of women business leaders representing $1.4 trillion in combined revenue, by hosting a unique Porsche driving experience event, and announced a partnership with the NFL Players Association and will be participating in its Community MVP program.
"Wheels Up wants to be 'Uber of the sky,' CEO says Kenny Dichter."
What do Analysts think of Wheels Up?
Wheels Up is liked by analysts with several buys ratings and an average price estimate of $12.50. TipRanks for example recently reported that Barrington analyst Gary Prestopino maintained a Buy rating on Wheels Up Experience and set a price target of $20.00 while Jefferies also assigned a Buy rating to the stock with a $13.00 price target
Is Wheels Up a stock to buy?
The stock has seen a 52 Week Range of $7.10 - $15.00 however it currently sites near its 52 week low of $7.69 as it appears there is no appetite for high growth stocks. But if the company continues to execute, increase sales, and efficiently manage supply the stock of Wheels Up will recover from its current low levels. Additionally, its clear private jet companies such as Wheels Up have seen a quick recovery in sales as the wealthy flock to private jets and avoid the major airlines. This is reflected in Wheels up active members growing 47% year-over-year to 10,515 and Live Flight Legs increasing by an astounding 146% year-over-year.
With the rapid recovery in private jet flights Wheels Up looks to have a great risk-reward and could be considered a speculative stock to add to your portfolio. So do your research and see if Wheels Up is a stock to Buy, we like the story.
Other Stocks to Buy
See previous reviews of Levi Strauss & Co. (LEVI) and Tapestry (TPR).
Stocks to buy is a segment of the MySmallBank.com blog written by Allan R Kirby, who writes and produces Personal Finance articles and videos.
Disclosure: mysmallbank.com nor the author received any compensation from any securities highlighted in this article. The article is our opinion only and is written to help readers learn more about the stocks mentioned in this article. Consider this as basic information only and utilize professional services and additional sources before making an investment decision. #investing #stocks #stockstobuy #UP #fly #travel #vacation