In today’s content analysis, we discuss about RyanAir Holdings – ADR (RYAAY), a low-cost airline company based in Ireland. RyanAir operates mainly in Europe, this explains why we’re not so familiar with the name here in North America. As a reference, the company offers round-trips such as London – Madrid at a cost of around $75 USD. 
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In less than a year, RyanAir’s intrinsic value went from $30 to $80, a 165% increase thanks to the NOPAT which doubled since March 2014. Over the same period, the return on capital jumped from 8.7% to 17.0%, by far the highest number observed in the past 5 years. The stock still trades at a slight premium; the P/IV ratio is at 1.12 as of May 26th.
The positive Future Growth Value (FGV) of 25% indicates that the total market value of the company is higher than its Current Operating Value (COV), which is common for growth companies. The market’s enthusiasm towards the bright future for low-cost airlines translates into a premium we have to pay for positive expected growth.
The economic value added (EVA) has also quickly increased since March 2014, and the growth rate is particularly impressive since June 2015.
RyanAir is not a very reliable dividend payer. The company does pay dividends sometimes, but very irregularly from both a frequency and dollar amount perspective. However, the company does not hesitate to buy back shares; RyanAir bought back about 16.5% of its outstanding shares over the past 5 years.
Here is attached Download a performance summary table in which you will find key metrics for RyanAir but also for the other main airline companies, both traditional and low-cost. You will quickly see that growth has been way better in the low-cost segment.
