Overall AAL gets a fundamental rating of 4 out of 10. We evaluated AAL against 22 industry peers in the Passenger Airlines industry. AAL has a medium profitability rating, but doesn't score so well on its financial health evaluation. AAL has a correct valuation and a medium growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

AAL had positive earnings in the past year.
In the past year AAL had a positive cash flow from operations.
Of the past 5 years AAL 4 years were profitable.
Of the past 5 years AAL 4 years had a positive operating cash flow.

1.2 Ratios

AAL has a Return On Assets of 0.97%. This is in the better half of the industry: AAL outperforms 63.64% of its industry peers.
With a decent Return On Invested Capital value of 4.03%, AAL is doing good in the industry, outperforming 63.64% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AAL is significantly below the industry average of 20.53%.

		Industry Rank	Sector Rank
ROA	0.97%
ROE	N/A
ROIC	4.03%

ROA(3y)0.95%

ROA(5y)0.01%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)5.01%

ROIC(5y)N/A

1.3 Margins

Looking at the Profit Margin, with a value of 1.11%, AAL is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
In the last couple of years the Profit Margin of AAL has declined.
With a Operating Margin value of 4.22%, AAL perfoms like the industry average, outperforming 59.09% of the companies in the same industry.
In the last couple of years the Operating Margin of AAL has declined.
AAL's Gross Margin of 65.01% is fine compared to the rest of the industry. AAL outperforms 77.27% of its industry peers.
AAL's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	4.22%
PM (TTM)	1.11%
GM	65.01%

OM growth 3Y-6.88%

OM growth 5YN/A

PM growth 3Y-7.81%

PM growth 5YN/A

GM growth 3Y3.78%

GM growth 5Y8.12%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AAL is destroying value.
The number of shares outstanding for AAL has been increased compared to 1 year ago.
The number of shares outstanding for AAL has been increased compared to 5 years ago.
AAL has a better debt/assets ratio than last year.

2.2 Solvency

AAL has an Altman-Z score of 0.70. This is a bad value and indicates that AAL is not financially healthy and even has some risk of bankruptcy.
AAL has a Altman-Z score of 0.70. This is comparable to the rest of the industry: AAL outperforms 54.55% of its industry peers.
The Debt to FCF ratio of AAL is 32.56, which is on the high side as it means it would take AAL, 32.56 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AAL (32.56) is better than 63.64% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	32.56
Altman-Z	0.7

ROIC/WACC0.58

WACC6.96%

2.3 Liquidity

A Current Ratio of 0.54 indicates that AAL may have some problems paying its short term obligations.
With a Current ratio value of 0.54, AAL perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
A Quick Ratio of 0.42 indicates that AAL may have some problems paying its short term obligations.
AAL has a Quick ratio (0.42) which is in line with its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.54
Quick Ratio	0.42

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

AAL shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -81.68%.
Measured over the past 5 years, AAL shows a small growth in Earnings Per Share. The EPS has been growing by 5.27% on average per year.
The Revenue has been growing slightly by 0.78% in the past year.
The Revenue has been growing by 25.80% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)-81.68%

EPS 3Y5.27%

EPS 5YN/A

EPS Q2Q%-81.4%

Revenue 1Y (TTM)0.78%

Revenue growth 3Y3.71%

Revenue growth 5Y25.8%

Sales Q2Q%2.48%

3.2 Future

The Earnings Per Share is expected to grow by 81.37% on average over the next years. This is a very strong growth
Based on estimates for the next years, AAL will show a small growth in Revenue. The Revenue will grow by 4.43% on average per year.

EPS Next Y469.46%

EPS Next 2Y175.13%

EPS Next 3Y111.64%

EPS Next 5Y81.37%

Revenue Next Year7.19%

Revenue Next 2Y6.1%

Revenue Next 3Y4.97%

Revenue Next 5Y4.43%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 38.40 indicates a quite expensive valuation of AAL.
Based on the Price/Earnings ratio, AAL is valued a bit cheaper than 63.64% of the companies in the same industry.
AAL is valuated rather expensively when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 6.74 indicates a rather cheap valuation of AAL.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AAL indicates a rather cheap valuation: AAL is cheaper than 100.00% of the companies listed in the same industry.
AAL's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.

		Industry Rank	Sector Rank
PE	38.4
Fwd PE	6.74

4.2 Price Multiples

90.91% of the companies in the same industry are more expensive than AAL, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	10.06
EV/EBITDA	N/A

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
AAL's earnings are expected to grow with 111.64% in the coming years. This may justify a more expensive valuation.