VLRS Should I Buy
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VLRS is not a good buy right now for an impatient investor. The chart is extended (RSI 70.7) and price is sitting just below near-term resistance (R1 ~9.80), while the latest quarter showed sharp profit deterioration. Despite improving Wall Street targets and very bullish options positioning, the risk/reward at $9.73 looks less attractive until it either clears ~$9.80 convincingly (breakout confirmation) or pulls back toward stronger support ($9.23 pivot).
Trend is bullish but stretched. Moving averages are aligned bullishly (SMA_5 > SMA_20 > SMA_200), and MACD histogram is positive and expanding (momentum still up). However, RSI_6 at ~70.65 suggests the stock is near overbought/extended. Price ($9.73) is also close to resistance at ~9.80 (R1) with the next resistance near ~10.16 (R2). Key levels: support ~9.23 (pivot), then ~8.66 (S1). Near-term setup favors a pause/pullback risk rather than a clean immediate entry.
Wall Street tone is improving: multiple target raises and Buy/Outperform stances recently (Goldman raised PT to $11.70; BofA raised PT to $11.20; Bradesco upgraded to Outperform with $12). Merger with Viva Aerobus framed by BofA as a positive surprise with potential synergies. Barclays notes easier comps in 1H 2026 and a more favorable U.S.-Mexico travel outlook.
and price is near resistance (~9.80), increasing the odds of a near-term stall/pullback. No supportive near-term news flow in the past week. Hedge funds/insiders show neutral activity (no clear accumulation signal). No recent congress trading data to corroborate sentiment.
2025/Q3: Revenue declined to $784.3M (-3.51% YoY). Net income fell sharply to $6.0M (-83.77% YoY). EPS was $0.01 (-66.67% YoY). Overall, growth/profit trends deteriorated materially in the latest quarter, which undermines conviction for an immediate buy at resistance.
Recent analyst trend is net positive: targets have been raised across multiple firms and ratings skew bullish (Goldman Buy with higher PT; BofA Buy with higher PT; Bradesco upgrade to Outperform; only Barclays remains Equal Weight though with a higher PT). Wall Street pros: merger synergy potential, improving comps and travel outlook. Cons: recent earnings/profitability weakness and execution risk implied by sharp YoY net income decline.
