Down 98%, Is It Time to Buy Spirit Airlines Stock?

Spirit Airlines Stock Has Been Decimated

Spirit Airlines stock (NYSE: SAVE) has been absolutely decimated in recent months. Since hitting a 52-week high of $47.49 in April, the stock has plunged over 98% to close at just $0.84 on Monday. This massive decline has been driven by a number of factors, including the impact of the COVID-19 pandemic on air travel, the company's financial struggles, and a recent downgrade by an analyst.

The Impact of COVID-19 on Air Travel

The COVID-19 pandemic has had a devastating impact on the airline industry. Air travel demand has plummeted as people have been forced to stay home and avoid non-essential travel. This has led to a sharp decline in revenue for airlines, including Spirit Airlines. In the second quarter of 2020, Spirit Airlines reported a net loss of $286 million, compared to a net income of $123 million in the same period last year.

Spirit Airlines' Financial Struggles

Even before the COVID-19 pandemic, Spirit Airlines was facing a number of financial challenges. The company has been struggling with high costs and low margins. In 2019, Spirit Airlines reported a net loss of $301 million. The company's financial struggles have been exacerbated by the COVID-19 pandemic.

Recent Downgrade by Analyst

On Monday, Credit Suisse downgraded Spirit Airlines stock from "neutral" to "underperform." The analyst cited the company's financial struggles and the impact of the COVID-19 pandemic on air travel. The downgrade sent Spirit Airlines stock down 12% on Monday.

Is It Time to Buy Spirit Airlines Stock?

Given the significant challenges facing Spirit Airlines, it is difficult to recommend buying the stock at this time. The company's financial struggles and the impact of the COVID-19 pandemic on air travel are likely to continue to weigh on the stock price. However, the stock could be a good long-term investment for investors who are willing to take on risk. The company has a strong brand and a loyal customer base. If the airline industry recovers from the COVID-19 pandemic, Spirit Airlines could be well-positioned to benefit.