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New Alert: Surf Air Mobility Inc. (NYSE: SRFM)
SRFM is our new NYSE alert.
We were among the very first to bring SRFM to your attention in November.
Following our previous alert of the company, when it was trading at just 3.55, it rallied to a high of 6.72, gains of +89%.
Now, with recent market volatility, SRFM could be poised for another breakout opportunity.
SRFM is positioned at the intersection of one of the hottest growth industries today – electrification, technology, air mobility and AI.
This NYSE listed company is spearheading the "beginning of a massive growth industry".
Imagine:
- "Why drive to your neighboring city or region when you can fly?"
Over the past 30 years or so, the standard response has been because driving is cheaper, more convenient, and probably faster door to door.
That may not be true for much longer, however.
Advances in aerospace technology, new attitudes about travel, and a growing ecosystem of established players and startups could drive a resurgence in regional air mobility.
SRFM is a NYSE listed "Los Angeles-based regional air mobility platform".
SRFM is "one of the largest commuter airlines in the U.S. by scheduled departures as well as the largest passenger operator of Cessna Caravans in the U.S", "flying over 370K passenger per year" on "72K" flights every year.
As the company states:
- "We've flown millions of passengers over millions of miles"
According to a recent report from McKinsey & Company: "Short-haul flying redefined: The promise of regional air mobility"
- "Innovative propulsion and flight-control technologies, combined with a better customer experience, could usher in a new era of frequent, convenient passenger flights on small regional aircraft."
Importantly, as McKinsey further notes, this is "a potential multi-billion-dollar market in the making".
Some models suggest a total addressable market of "passenger revenue of $75 billion to $115 billion by 2035".
In addition to its airline operations, SRFM is "currently developing an AI-powered airline software operating system and is working toward certification of electric powertrain technology".
SRFM is "dedicated to transforming regional air travel through [software and] electrification".
SRFM "partners with commercial leaders to develop innovative powertrain technology for smaller aircraft, facilitating the electrification of existing fleets and the widespread adoption of electric aircraft".
The company's "mission is to drive substantial cost reductions and environmental benefits to make regional flying more accessible and affordable".
SRFM plans to offer its "technology solutions to the entire regional air mobility industry to improve safety, efficiency, profitability and reduce emissions".
Not only does the company have "Deep management expertise across aviation, software, and electrification", they have an impressive roster of "Top 5 Shareholders" which includes "Palantir", the more than $180 billion dollar company by market cap.
Importantly:
- "Recurring government contracts currently drive ~41% of total revenue"
As the company explains:
"Created by Congress in 1978, the EAS program ensures that small communities receive air service to connect them with the large U.S. aviation infrastructure. The Department of Transportation (DOT) selects air carriers to provide service to eligible communities with subsidies."
As of "September 30, 2024", Surf Air Mobility supported "20 EAS communities in network".
The company's "robust network in Hawaii demonstrates the potential of regional air mobility".
The company has announced multiple accomplishments recently.
In November, the company announced:
"Surf Air Mobility Secures $50 Million Financing to Fund Transformation Plan and Path to Profitability"
Here are the highlights from this press release:
- "Company Receives Four Year Term Loan from Comvest Partners, a Multi-Billion-Dollar Investment Management Firm"
- "At SOFR +5%, Term Loan Lowers Company's Cost of Capital and Minimizes Dilution"
- "Robust Cash Position Enables New Management Team to Advance Four Phase Transformation Plan"
In addition, in December, the company announced:
"Surf Air Mobility Announces Approximately 90% Reduction to Contemplated Future Equity Dilution"
- "Previously announced credit facility expected to facilitate reduction in contemplated future equity dilution"
- "Company plans registration statement amendment to reduce share subscription facility shares from 40,000,000 shares to $15,000,000 (~4.4M shares at today's price)"
- "Reduction of potential dilution unlocks ability to create significant shareholder value over time"
Importantly, as the company explained in this press release:
"As previously noted, during 2025 the Company intends to exit unprofitable flight routes, deploy four recently acquired new aircraft to more efficiently service certain routes, address maintenance backlogs, and leverage its SurfOS software platform to drive efficiencies. With a renewed focus on profitability of its airline operations over revenue growth in the coming year, the Company expects that revenue in 2025 will still exceed $100 million. Also, as previously noted, the Company expects that it will achieve profitability in its airline operations in 2025."
In addition, here are some other recent noteworthy announcements:
- "Surf Air Mobility Announces Open Market Purchases of Company Stock by Board Members"
- "Surf Air Mobility Relocates Air Operations Center to Addison, TX"
- "Surf Air Mobility Strengthens Aviation Leadership Team with Key Executive Appointments"
In March, the company announced:
"Surf Air Mobility Announces Launch Customers for SurfOS™ Software"
Here are the comments from this press release:
"SurfOS is building an end-to-end solution that will allow us to seamlessly sell our charter flights directly to consumers and integrates the operational complexities we face daily with an intuitive interface that our entire team—from dispatchers to pilots—has embraced," said Toby Woods, Founder and CEO of Direct2, one of Surf Air Mobility's SurfOS launch customers. "It's challenging as an on-demand air carrier to find software partners who not only have both the skills to develop top-notch user interfaces, but also truly understand the detail and precision required by aviation's dynamic operational and stringent regulatory environment."
Importantly:
"We believe that SurfOS will be the category-defining technology platform for the advanced air mobility industry. We are creating an operating system that is addressing the needs of aircraft operators, brokers, and owners, all of whom have a real need for modern aviation software enhanced with AI and big data," said Sudhin Shahani, Co-founder and Board Member of Surf Air Mobility. "Individually, those industry participants could not affordably develop this broad suite of customized applications or organize their data onto a single platform. Given that we work with over 400 air operators through our On Demand platform, we are well positioned to bring SurfOS to market at scale."
Yesterday, the company announced:
- "Surf Air Mobility Reports Fourth Quarter and Full Year 2024 Financial Results"
Make sure to do your own due diligence.
Sources: McKinsey, Presentation, PR1, PR2, PR3, PR4, PR5, PR6, PR7, PR8, PR9, PR10, YF, Website, Chart
Happy Trading!
The SmallCapStocks.com Team
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