Analyzing Surf Air Mobility (NYSE:SRFM) & Frontier Group (NASDAQ:ULCC)

Frontier Group (NASDAQ:ULCC) and Surf Air Mobility (NYSE:SRFM) are both small-cap transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Institutional and Insider Ownership

17.7% of Surf Air Mobility shares are held by institutional investors. 48.0% of Frontier Group shares are held by company insiders. Comparatively, 8.0% of Surf Air Mobility shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Frontier Group and Surf Air Mobility”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontier Group	$3.78 billion	0.32	$85.00 million	($0.61)	-8.59
Surf Air Mobility	$119.43 million	1.25	-$74.91 million	($2.48)	-0.96

Frontier Group has higher revenue and earnings than Surf Air Mobility. Frontier Group is trading at a lower price-to-earnings ratio than Surf Air Mobility, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Frontier Group has a beta of 2.55, suggesting that its stock price is 155% more volatile than the S&P 500. Comparatively, Surf Air Mobility has a beta of 3.03, suggesting that its stock price is 203% more volatile than the S&P 500.

Profitability

This table compares Frontier Group and Surf Air Mobility’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontier Group	-3.65%	-25.73%	-2.10%
Surf Air Mobility	-66.95%	N/A	-58.16%

Analyst Ratings

This is a summary of current ratings and price targets for Frontier Group and Surf Air Mobility, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontier Group	2	5	2	0	2.00
Surf Air Mobility	1	1	2	0	2.25

Frontier Group currently has a consensus target price of $6.38, suggesting a potential upside of 21.66%. Surf Air Mobility has a consensus target price of $6.50, suggesting a potential upside of 172.54%. Given Surf Air Mobility’s stronger consensus rating and higher probable upside, analysts clearly believe Surf Air Mobility is more favorable than Frontier Group.

Summary

Surf Air Mobility beats Frontier Group on 7 of the 13 factors compared between the two stocks.

About Frontier Group

Frontier Group Holdings, Inc., provides low-fare passenger airline services to leisure travelers in the United States and Latin America. The company sells its products through direct distribution channels, including its website, mobile app, and contact centers. As of December 31, 2023, it had a fleet of 136 Airbus single-aisle aircrafts. Frontier Group Holdings, Inc. was founded in 1994 and is headquartered in Denver, Colorado.

About Surf Air Mobility

Surf Air Mobility Inc. operates as an electric aviation and air travel company in the United States. The company offers an air mobility platform with scheduled routes and on demand charter flights operated by third parties. Surf Air Mobility Inc. is headquartered in Hawthorne, California.