Air Transport Services Group, Inc. (ATSG) | Investment Case

1. Company Snapshot

1.a. Company Description

Air Transport Services Group, Inc., together with its subsidiaries, provides aircraft leasing and air cargo transportation and related services in the United States and internationally.The company offers aircraft, flight crews, aircraft maintenance, aircraft hull and liability insurance, and aviation fuel services; and aircraft maintenance and modification services, including airframe modification and heavy maintenance, component repairs, engineering services, and aircraft line maintenance.It also provides equipment maintenance services; cargo load transfer and package sorting services; crew training services; and airline express operation, line and heavy maintenance, and ground handling services.

The company's ground support services include labor and management for cargo load transfer and sorting; design, installation, and maintenance of material handling equipment; leasing and maintenance of ground support equipment; and general facilities maintenance.In addition, it offers equipment installation and maintenance, vehicle maintenance and repair, jet fuel, and deicing services.Further, the company operates cargo and passenger transportation business; resells and brokers aircraft parts; and performs passenger-to-freighter and passenger-to-combi conversions of aircrafts.

It provides its services to delivery companies, freight forwarders, airlines, air transportation, e-commerce, package delivery, and logistics industries, as well as government customers.As of December 31, 2021, the company's in-service aircraft fleet consisted of 107 owned aircraft and ten leased aircraft.The company was formerly known as ABX Holdings, Inc.

Air Transport Services Group, Inc.was founded in 1980 and is based in Wilmington, Ohio.

Show Full description

1.b. Last Insights on ATSG

Air Transport Services Group's recent performance was driven by strong Q4 earnings of $0.40 per share, beating estimates of $0.35 per share, and a 122% year-over-year increase in earnings. The company's revenue decline was partly offset by a solid earnings beat. Additionally, ATSG's stockholders approved the proposed merger with Stonepeak, positioning the company for future growth. This positive development, combined with a strong earnings release, contributed to the company's recent momentum.

1.c. Company Highlights

Last Price	22.48
Change Percentage	-0.04%
Open	22.48
Previous Close	22.48
Market Cap ( Millions)	1481
Volume	4627099
Year High	22.49
Year Low	11.69
M A 50	22.32
M A 200	19.06

FCF Yield	12.00%
Dividend Yield	0.00%
ROE	1.02%
Debt / Equity	3.67%
Net Debt / EBIDTA	-1.71%
Price To Book	0.99
Price Earnings Ratio	96.89
Price To FCF	8.34
Price To sales	1.0
EV / EBITDA	4.17

2. Transcript Summary

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3. NewsRoom

Frontier Scientific Solutions and Air Transport Services Group Announce Strategic Partnership to Launch Dedicated Air Services for Life Sciences

Oct -15

Source: businesswire.com

Air Transport Services Group Hosts Girls in Aviation Day 2025

Sep -30

Source: businesswire.com

Air Transport Services Group Appoints Greg Mays as President

Sep -08

Source: businesswire.com

ATSG Awards Six Scholarships to Business and STEM Students

Aug -18

Source: businesswire.com

ATSG Delivers Second A330 Converted Freighter to ULS Airlines Cargo

Aug -14

Source: businesswire.com

ATSG Leases First EASA-Certified A321 Converted Freighter To Warsaw Cargo

Jul -17

Source: businesswire.com

Air Transport Services Group, Inc. Provides Notice of Fundamental Change and Make-Whole Fundamental Change to Holders of its 3.875% Convertible Senior Notes Due 2029

Apr -11

Source: businesswire.com

Stonepeak Completes Acquisition of ATSG

Apr -11

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.52%)

6. Segments

Aircraft, Crew, Maintenance and Insurance Services

Expected Growth: 2.5%

Aircraft segment growth driven by increasing cargo demand and fleet expansion. Crew segment growth fueled by rising pilot and technician hiring. Maintenance segment growth driven by increasing aircraft utilization and aging fleet. Insurance Services growth driven by rising premiums and expanded product offerings, all contributing to 2.5% growth.

Cargo Aircraft Management

Expected Growth: 3.5%

Strong demand for e-commerce and express air cargo, increasing global trade, and growing need for time-sensitive shipments drive growth. Additionally, ATSG's diversified customer base, including major logistics providers, and its ability to provide customized cargo aircraft solutions contribute to the 3.5% growth.

All Other

Expected Growth: 1.5%

All Other segment of Air Transport Services Group, Inc. grew 1.5% driven by increased demand for logistics and supply chain services, expansion of e-commerce, and strategic acquisitions. Additionally, growth in passenger air travel and cargo transportation contributed to the segment's growth.

7. Detailed Products

Cargo Aircraft Leasing

Air Transport Services Group, Inc. provides cargo aircraft leasing services to airlines, freight forwarders, and other logistics companies.

Air Cargo Transportation

The company offers air cargo transportation services, providing fast and reliable transportation of goods to destinations around the world.

Ground Handling Services

Air Transport Services Group, Inc. provides ground handling services, including cargo handling, warehousing, and delivery services.

Aircraft Maintenance and Repair

The company offers aircraft maintenance and repair services, including routine maintenance, repairs, and modifications.

Aircraft Modification and Conversion

Air Transport Services Group, Inc. provides aircraft modification and conversion services, including passenger-to-freighter conversions and other custom modifications.

8. Air Transport Services Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for Air Transport Services Group, Inc. due to the lack of alternative modes of transportation for time-sensitive and high-value cargo.

Bargaining Power Of Customers

The bargaining power of customers is medium for Air Transport Services Group, Inc. as customers have some flexibility to choose from different air cargo carriers, but the company's specialized services and long-term contracts mitigate this power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for Air Transport Services Group, Inc. as the company has a diverse supplier base and is not heavily dependent on a single supplier.

Threat Of New Entrants

The threat of new entrants is low for Air Transport Services Group, Inc. due to the high barriers to entry in the air cargo industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high for Air Transport Services Group, Inc. due to the competitive nature of the air cargo industry, with multiple players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	56.57%
Debt Cost	6.35%
Equity Weight	43.43%
Equity Cost	8.23%
WACC	7.17%
Leverage	130.23%

11. Quality Control: Air Transport Services Group, Inc. passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Air Transport Services Group

A-Score: 5.1/10

Value: 6.7

Growth: 4.9

Quality: 4.8

Yield: 0.0

Momentum: 9.0

Volatility: 5.0

1-Year Total Return ->

Sun Country Airlines

A-Score: 4.8/10

Value: 7.2

Growth: 6.7

Quality: 5.7

Yield: 0.0

Momentum: 6.5

Volatility: 3.0

1-Year Total Return ->

Blade Air Mobility

A-Score: 3.9/10

Value: 8.2

Growth: 5.4

Quality: 3.1

Yield: 0.0

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

Spirit Airlines

A-Score: 3.7/10

Value: 9.8

Growth: 1.6

Quality: 2.9

Yield: 3.0

Momentum: 1.5

Volatility: 3.7

1-Year Total Return ->

Allegiant Travel

A-Score: 3.2/10

Value: 6.1

Growth: 3.0

Quality: 1.7

Yield: 0.0

Momentum: 5.5

Volatility: 2.7

1-Year Total Return ->

Frontier

A-Score: 2.8/10

Value: 7.0

Growth: 3.9

Quality: 2.9

Yield: 0.0

Momentum: 2.0

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-10.06%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.17%

Air Transport Services Group, Inc. - US00922R1059

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ATSG

1.c. Company Highlights

Weak Momentum

Cheaper

Lower Quality

Earnings Beats

Revenues Miss

Average Growth

Earnings Miss

Fairly Valued

Strong Momentum

Average Yield

Revenues Beats

Medium Volatility

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.52%)

6. Segments

Aircraft, Crew, Maintenance and Insurance Services

Expected Growth: 2.5%

Cargo Aircraft Management

Expected Growth: 3.5%

All Other

Expected Growth: 1.5%

7. Detailed Products

Cargo Aircraft Leasing

Air Cargo Transportation

Ground Handling Services

Aircraft Maintenance and Repair

Aircraft Modification and Conversion

8. Air Transport Services Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Air Transport Services Group, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.48$

Current Price

22.48$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA