AMERICAN AIRLINES GROUP INC (AAL) Stock Fundamental Analysis
NASDAQ:AAL - Nasdaq - US02376R1023 - Common Stock - Currency: USD
AAL gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 23 industry peers in the Passenger Airlines industry. While AAL is still in line with the averages on profitability rating, there are concerns on its financial health. AAL scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
AAL had positive earnings in the past year.
AAL had a positive operating cash flow in the past year.
In multiple years AAL reported negative net income over the last 5 years.
AAL had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.09%, AAL is in the better half of the industry, outperforming 60.87% of the companies in the same industry.
AAL has a Return On Invested Capital of 5.98%. This is in the better half of the industry: AAL outperforms 60.87% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AAL is below the industry average of 10.40%.
The last Return On Invested Capital (5.98%) for AAL is above the 3 year average (5.54%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.09% | ||
| ROE | N/A | ||
| ROIC | 5.98% |
ROA(3y)0.96%
ROA(5y)-2.89%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)5.54%
ROIC(5y)N/A
1.3 Margins
AAL has a Profit Margin (1.26%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of AAL has declined.
AAL has a Operating Margin (5.50%) which is in line with its industry peers.
In the last couple of years the Operating Margin of AAL has declined.
AAL has a better Gross Margin (64.23%) than 78.26% of its industry peers.
In the last couple of years the Gross Margin of AAL has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.5% | ||
| PM (TTM) | 1.26% | ||
| GM | 64.23% |
OM growth 3YN/A
OM growth 5Y-5.79%
PM growth 3YN/A
PM growth 5Y-15.78%
GM growth 3Y3.63%
GM growth 5Y0.67%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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
Based on the Altman-Z score of 0.69, we must say that AAL is in the distress zone and has some risk of bankruptcy.
AAL has a Altman-Z score of 0.69. This is comparable to the rest of the industry: AAL outperforms 52.17% of its industry peers.
The Debt to FCF ratio of AAL is 18.68, which is on the high side as it means it would take AAL, 18.68 years of fcf income to pay off all of its debts.
AAL's Debt to FCF ratio of 18.68 is fine compared to the rest of the industry. AAL outperforms 60.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 18.68 | ||
| Altman-Z | 0.69 |
ROIC/WACC0.88
WACC6.77%
2.3 Liquidity
A Current Ratio of 0.52 indicates that AAL may have some problems paying its short term obligations.
AAL has a worse Current ratio (0.52) than 65.22% of its industry peers.
AAL has a Quick Ratio of 0.52. This is a bad value and indicates that AAL is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.42, AAL is not doing good in the industry: 69.57% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.42 |
3. Growth
3.1 Past
AAL shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -26.22%.
Measured over the past years, AAL shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -17.21% on average per year.
AAL shows a small growth in Revenue. In the last year, the Revenue has grown by 1.92%.
Measured over the past years, AAL shows a small growth in Revenue. The Revenue has been growing by 3.44% on average per year.
EPS 1Y (TTM)-26.22%
EPS 3YN/A
EPS 5Y-17.21%
EPS Q2Q%-73.53%
Revenue 1Y (TTM)1.92%
Revenue growth 3Y21.96%
Revenue growth 5Y3.44%
Sales Q2Q%-0.15%
3.2 Future
AAL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.02% yearly.
The Revenue is expected to grow by 3.27% on average over the next years.
EPS Next Y-51.88%
EPS Next 2Y3.86%
EPS Next 3Y11.51%
EPS Next 5Y17.02%
Revenue Next Year1.29%
Revenue Next 2Y3.62%
Revenue Next 3Y4.06%
Revenue Next 5Y3.27%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
AAL is valuated cheaply with a Price/Earnings ratio of 6.66.
AAL's Price/Earnings ratio is rather cheap when compared to the industry. AAL is cheaper than 100.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.59. AAL is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 5.37, the valuation of AAL can be described as very cheap.
Based on the Price/Forward Earnings ratio, AAL is valued cheaper than 86.96% of the companies 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 22.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.66 | ||
| Fwd PE | 5.37 |
4.2 Price Multiples
82.61% of the companies in the same industry are more expensive than AAL, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AAL indicates a rather cheap valuation: AAL is cheaper than 86.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.63 | ||
| EV/EBITDA | 4.22 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y3.86%
EPS Next 3Y11.51%
5. Dividend
5.1 Amount
AAL does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
11.0575
-0.78 (-6.61%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners68.64%
Inst Owner Change-0.34%
Ins Owners1.18%
Ins Owner Change8.38%
Market Cap7.29B
Analysts73.33
Price Target13.55 (22.54%)
Short Float %10.38%
Short Ratio1.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)21.44%
Min EPS beat(2)9.67%
Max EPS beat(2)33.2%
EPS beat(4)4
Avg EPS beat(4)33.85%
Min EPS beat(4)2.97%
Max EPS beat(4)89.57%
EPS beat(8)7
Avg EPS beat(8)45.93%
EPS beat(12)9
Avg EPS beat(12)31.66%
EPS beat(16)13
Avg EPS beat(16)25.59%
Revenue beat(2)1
Avg Revenue beat(2)-0.22%
Min Revenue beat(2)-1.41%
Max Revenue beat(2)0.97%
Revenue beat(4)2
Avg Revenue beat(4)-0.36%
Min Revenue beat(4)-1.41%
Max Revenue beat(4)0.97%
Revenue beat(8)3
Avg Revenue beat(8)-0.41%
Revenue beat(12)3
Avg Revenue beat(12)-0.58%
Revenue beat(16)4
Avg Revenue beat(16)-0.46%
PT rev (1m)-9.41%
PT rev (3m)-36.64%
EPS NQ rev (1m)1.39%
EPS NQ rev (3m)-44.7%
EPS NY rev (1m)-38.7%
EPS NY rev (3m)-62.11%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)-7.02%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-4.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.66 | ||
| Fwd PE | 5.37 | ||
| P/S | 0.13 | ||
| P/FCF | 4.63 | ||
| P/OCF | 1.71 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 4.22 |
EPS(TTM)1.66
EY15.01%
EPS(NY)2.06
Fwd EY18.63%
FCF(TTM)2.39
FCFY21.61%
OCF(TTM)6.46
OCFY58.4%
SpS82.17
BVpS-6.84
TBVpS-16.13
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.09% | ||
| ROE | N/A | ||
| ROCE | 8.16% | ||
| ROIC | 5.98% | ||
| ROICexc | 7.67% | ||
| ROICexgc | 9.77% | ||
| OM | 5.5% | ||
| PM (TTM) | 1.26% | ||
| GM | 64.23% | ||
| FCFM | 2.91% |
ROA(3y)0.96%
ROA(5y)-2.89%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)5.54%
ROIC(5y)N/A
ROICexc(3y)6.89%
ROICexc(5y)N/A
ROICexgc(3y)8.52%
ROICexgc(5y)N/A
ROCE(3y)7.55%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y3.25%
ROICexc growth 3YN/A
ROICexc growth 5Y2.18%
OM growth 3YN/A
OM growth 5Y-5.79%
PM growth 3YN/A
PM growth 5Y-15.78%
GM growth 3Y3.63%
GM growth 5Y0.67%
F-Score7
Asset Turnover0.87
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 18.68 | ||
| Debt/EBITDA | 4.73 | ||
| Cap/Depr | 119.51% | ||
| Cap/Sales | 4.95% | ||
| Interest Coverage | 1.57 | ||
| Cash Conversion | 81.53% | ||
| Profit Quality | 230.07% | ||
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.42 | ||
| Altman-Z | 0.69 |
F-Score7
WACC6.77%
ROIC/WACC0.88
Cap/Depr(3y)120.38%
Cap/Depr(5y)92.28%
Cap/Sales(3y)5.27%
Cap/Sales(5y)5.69%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-26.22%
EPS 3YN/A
EPS 5Y-17.21%
EPS Q2Q%-73.53%
EPS Next Y-51.88%
EPS Next 2Y3.86%
EPS Next 3Y11.51%
EPS Next 5Y17.02%
Revenue 1Y (TTM)1.92%
Revenue growth 3Y21.96%
Revenue growth 5Y3.44%
Sales Q2Q%-0.15%
Revenue Next Year1.29%
Revenue Next 2Y3.62%
Revenue Next 3Y4.06%
Revenue Next 5Y3.27%
EBIT growth 1Y-18.14%
EBIT growth 3YN/A
EBIT growth 5Y-2.55%
EBIT Next Year43.06%
EBIT Next 3Y26.24%
EBIT Next 5Y28.58%
FCF growth 1Y-11.41%
FCF growth 3Y64.51%
FCF growth 5YN/A
OCF growth 1Y-1.43%
OCF growth 3Y78.19%
OCF growth 5Y0.87%