Frontier Group Holdings (ULCC) is back in focus after Frontier Airlines renewed its long term exclusive credit card partnership with Barclays US Consumer Bank, underscoring continued investment in its loyalty and rewards ecosystem.

Despite a sharp 1 day share price return of down 9.87% to US$6.94 following the credit card renewal announcement, Frontier Group Holdings still has a 30 day share price return of 25.38% and a 1 year total shareholder return of 66.83%. This hints that recent momentum has strengthened even as the longer term 3 year and 5 year total shareholder returns remain weak.

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Frontier Group Holdings now has a long running credit card partnership locked in and a sharply higher share price over the past quarter, so the real question is whether the stock already reflects that strength or still offers value.

Most Popular Narrative: 42% Overvalued

Frontier Group Holdings closed at $6.94, while the most followed narrative assigns a fair value of $4.89, so the current price sits well above that estimate.

The expansion of premium product offerings (e.g., first-class seating, UpFront Plus), increased loyalty cardholder engagement, and enhanced ancillary service monetization are driving higher non-fare revenue per passenger, supporting both top-line growth and margin expansion over the medium term.

Read the complete narrative. Read the complete narrative.

Want to see how a planned profit turnaround, faster revenue growth and a lower future earnings multiple still point to a lower fair value? The narrative lays out a detailed path from current losses to future profitability and then discounts those cash flows at a precise required return. Curious which assumptions really move that $4.89 figure? The full breakdown is a quick way to pressure test your own view.

Result: Fair Value of $4.89 (OVERVALUED)

However, Frontier Group Holdings still faces pressure from potential domestic oversupply and higher non fuel costs. Either factor could quickly challenge the current fair value narrative.

Another View: Frontier Group Holdings Through Sales Multiples

While the most popular Frontier Group Holdings narrative sees the stock as 42% overvalued versus a $4.89 fair value, the current P/S of 0.4x looks different. It sits below both the global airlines industry average and peer average of 0.6x, and also matches the fair ratio of 0.4x.

That alignment suggests the market price already reflects what the fair ratio implies, yet leaves a gap versus industry and peers that could either close or widen over time. The key question is which signal you treat as the more important one.

Next Steps

If the combination of upside potential and real concerns surrounding Frontier Group Holdings leaves you undecided, take a closer look at the underlying trends and risk signals yourself. Then, round out your view with 2 key rewards and 2 important warning signs

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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.