What is the expected impact of the new leasing and construction activities on cash flow and capital expenditures in the next quarters?

Fundamental outlook

Sky Harbour’s Q2 filing confirms that the new campus at Centennial Airport is now operational and that the company has accelerated both leasing‑related activities (new “Home Base Operator” contracts) and construction of additional facilities. Leasing activity is a cash‑generating line‑item – the company will begin to collect monthly base‑fees and ancillary services from business‑aircraft operators, which should lift operating cash flow in the next two quarters. By contrast, the construction program is still in the build‑out phase, so capital expenditures (CapEx) will rise sharply as the firm funds additional hangars, aprons and ground‑support infrastructure. In short, we can expect a near‑term cash‑flow boost from the newly‑leased capacity, but net‑free‑cash‑flow will be compressed as CapEx outlays outpace the incremental cash inflows until the new campuses reach full utilization.

Market and trading implications

The cash‑flow lift is a positive signal for the “cash‑burn” narrative that has weighed on SKYH’s valuation, and it underpins the company’s decision to keep its 2025 guidance unchanged. However, the heightened CapEx trajectory introduces short‑term execution risk: if the leasing pipeline stalls or occupancy rates lag, free cash flow could dip below expectations, prompting a sell‑off. From a technical standpoint, SKYH has been trading in a tight 10‑day range around $4.20‑$4.45, with the 20‑day SMA acting as a modest support near $4.25. A breakout above $4.45 on volume would signal that the market is pricing in a smoother cash‑flow transition and could be a buying opportunity. Conversely, a breach below $4.25 with widening bid‑ask spreads may reflect concerns over the CapEx drag and could trigger a short‑position or stop‑loss for existing longs.

Actionable take‑away

• Long side: If the stock holds above $4.45 on solid volume, consider adding to positions as the leasing cash‑flow lift begins to materialize and the company stays on track with its 2025 guidance.
  
• Short side / defensive: Keep a watch‑list for any downward break below $4.25; a sustained move lower could indicate that construction‑related outlays are outweighing leasing inflows, warranting a defensive trim or short‑position.
  

Overall, the next two quarters should see improved operating cash flow but a temporary rise in CapEx; the net effect will be reflected in free‑cash‑flow trends and price action around the $4.25‑$4.45 band.