SkyWest (SKYW) is back in focus after releasing second quarter 2026 results that show higher revenue than a year earlier, along with lower net income, and pairing those figures with an expanded share repurchase program.

SkyWest's recent earnings release and expanded buyback came after a period where the share price has gained 11.79% over the past 90 days, while the 1 year total shareholder return is down 13.43%. This suggests improving short term momentum after a weaker stretch for longer term holders.

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Given SkyWest's stronger share price over the past quarter, softer recent earnings and a larger buyback, the real test now is valuation: does the current price still leave enough upside to justify the risks?

Most Popular Narrative: 21% Undervalued

SkyWest's most followed valuation narrative puts fair value at $121.50 per share, above the latest $96.24 close, which naturally raises questions about what is built into that view.

Expansion of revenue streams through new flying agreements (including capacity purchase and prorate with major carriers, as well as potential enhanced charter services) decreases reliance on legacy CPAs, leading to a more diversified and predictable recurring revenue profile that could underpin long-term EPS growth.

Want to see what sits behind that growth story and fair value? Contract mix, margin assumptions and future earnings multiples all matter. The full narrative joins those dots.

Result: Fair Value of $121.50 (UNDERVALUED)

However, SkyWest's story can shift if the ongoing global pilot shortage further increases labor costs or if major airline partners push to renegotiate key flying contracts.

Next Steps

With mixed signals around SkyWest's outlook, it helps to move quickly, review the underlying data directly, and weigh both concerns and potential upside using the 5 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.