Wizz Air shares plunge 24% on weak FY26 outlook, EBITDA miss

Wizz Air shares plummeted over 24% following disappointing fiscal year 2026 guidance, including lower-than-expected ASK growth in the first half and revenue expectations below consensus, despite a fiscal year 2025 net profit beat driven by tax credits. The airline's FY25 EBITDA also missed estimates, and net debt to EBITDA rose to 4.4x, while cost pressures are expected to increase due to higher depreciation, amortization, and maintenance, contrasting with consensus expectations of a decrease.

Analysis

Wizz Air shares plummeted over 24% following the release of disappointing fiscal year 2026 guidance and an EBITDA miss for fiscal year 2025, which overshadowed a net profit beat. For FY25, the airline reported group sales of €5.27 billion, marginally missing the €5.30 billion consensus, while EBITDA of €1.13 billion fell short of the €1.20 billion consensus. Although FY25 net profit of €214 million exceeded the €155 million consensus and company guidance, this outperformance was primarily driven by larger-than-expected income tax credits, raising questions about the quality of earnings. The company's net debt to EBITDA ratio increased to 4.4x, compared to 4x at the third quarter of fiscal year 2025. Looking ahead to FY26, Wizz Air projects "low to mid-teens" Available Seat Kilometer (ASK) growth for the first half, below the 17% consensus, though full-year ASK growth is guided at 20%, marginally above the 19% consensus. However, FY26 revenue guidance of "higher than FY25" is notably vague compared to the 18% increase analysts had projected. Critically, Cost per Available Seat Kilometer (CASK) excluding fuel is expected to be "slightly higher" in FY26 due to increased depreciation, amortization, and maintenance costs, a significant divergence from the consensus expectation of a 6% decrease. This follows a challenging FY25 where overall CASK rose 10.9% and CASK ex-fuel surged 19.9% year-over-year, despite a 3.9% Revenue per Available Seat Kilometer (RASK) increase and a 1 percentage point improvement in load factor to 91.2%.

Key Decisions for Investors

• Investors should exercise caution, recognizing the FY25 net profit beat was substantially influenced by income tax credits, masking an underlying EBITDA miss and concerning forward guidance.
• Close monitoring of Wizz Air's ability to manage escalating non-fuel costs (CASK ex-fuel) and achieve its FY26 revenue and ASK growth targets is crucial, particularly given the significant negative deviation of its CASK ex-fuel guidance from consensus.
• The increase in net debt to EBITDA to 4.4x signals heightened financial risk and should be carefully tracked, especially in light of projected cost pressures and uncertain revenue growth.