American Airlines Group Inc. (AAL) Stock Analysis — Fair Value, Risk & Moat Rating
NMS · Industrials · Airlines
Is American Airlines Group Inc. a safe investment right now?
American Airlines Group Inc.'s Altman Z-Score of 0.72 places it in the distress zone. Our DCF model estimates intrinsic value at $21.79, suggesting the stock may be undervalued by 44%. Moat rating: 2.3/5 stars.
Could American Airlines Group Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 0.72 falls below the 1.8 distress threshold, indicating significant financial stress.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives AAL's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | -0.1803 | 1.2 | -0.22 |
| B · Retained Earnings / Total Assets | RE / TA | -0.1108 | 1.4 | -0.16 |
| C · EBIT / Total Assets | EBIT / TA | 0.0491 | 3.3 | 0.16 |
| D · Market Cap / Total Liabilities | MCap / TL | 0.1308 | 0.6 | 0.08 |
| E · Revenue / Total Assets | Rev / TA | 0.8544 | 1.0 | 0.85 |
How has AAL's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2016 | 0.26 | Distress |
| 2017 | 0.46 | Distress |
| 2018 | 0.99 | Distress |
| 2019 | 0.84 | Distress |
| 2020 | 0.82 | Distress |
| 2021 | 0.72 | Distress |
| 2022 | -0.4 | Distress |
| 2023 | 0.18 | Distress |
| 2024 | 0.61 | Distress |
| 2025 | 0.72 | Distress |
Source: Calculated from AAL's latest 10-K filing on SEC EDGAR.
What could American Airlines Group Inc. be worth? (High Uncertainty)
Fair value range: $6.80 — $46.77
Valuation Methods Used
| Method | Fair Value | Weight | Detail |
|---|---|---|---|
| Historical PE × Forward EPS | $6.80 | 50% | 40.0x avg PE (4 years) × $0.17 forward EPS |
| DCF (Discounted Cash Flow) | $46.77 | 30% | Two-stage DCF: $0.8B TTM FCF, 20.0% growth, 7.0% WACC |
Assumptions & Data Sources
| Parameter | Value | Source |
|---|---|---|
| FCF Growth Rate (Stage 1) | 20.0% | 70% analyst consensus + 30% historical |
| Analyst EPS Growth (This Year) | -109.3% | Consensus (24 analysts) |
| Analyst EPS Growth (Next Year) | 7281.4% | Consensus |
| Historical 5Y FCF CAGR | 130.9% | SEC EDGAR |
| Terminal Growth Rate | 2.5% | Long-term GDP proxy |
| Discount Rate (WACC) | 7.0% | CAPM (Rf=4.3% + 1.25*5.5%) |
| Net Cash / (Debt) | $-30,415M | Balance sheet |
| Base FCF (TTM) | $0.8B | Trailing 12 months |
| Shares Outstanding | 660,304,573 | Latest |
Sensitivity Analysis
| Growth Rate | 8% WACC | 10% WACC | 7.0% WACC | 13% WACC |
|---|---|---|---|---|
| 0% | $20.28 | $14.99 | $24.69 | $10.82 |
| 2.5% | $23.48 | $17.22 | $28.70 | $12.30 |
| 5.0% | $27.15 | $19.77 | $33.31 | $13.99 |
| 7.5% | $32.16 | $23.19 | $39.66 | $16.20 |
Free Cash Flow History
| Year | FCF | Growth |
|---|---|---|
| 2016 | $−2.2B | — |
| 2017 | $0.1B | N/A |
| 2018 | $0.8B | +709.2% |
| 2019 | $−1.2B | N/A |
| 2020 | $−0.2B | N/A |
| 2021 | $−0.5B | N/A |
| 2022 | $−8.5B | N/A |
| 2023 | $0.5B | N/A |
| 2024 | $−0.4B | N/A |
| 2025 | $1.2B | N/A |
Source: FCF data from SEC EDGAR filings. Price via Yahoo Finance.
Does American Airlines Group Inc. have a durable competitive advantage?
Moat rating: 2.3/5.
What makes up AAL's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 2/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 3/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 2/5.
How stable is AAL's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2016 | 12.2% | — |
| 2017 | 16.6% | Rising |
| 2018 | 13.5% | Declining |
| 2019 | 10.0% | Declining |
| 2020 | 6.4% | Declining |
| 2021 | 6.8% | Stable |
| 2022 | -22.0% | Declining |
| 2023 | -2.5% | Rising |
| 2024 | 3.9% | Rising |
| 2025 | 8.1% | Rising |
Source: ROIC calculated from SEC EDGAR filings.
Is American Airlines Group Inc.'s dividend safe?
American Airlines Group Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $52.8B | $49.0B | $17.3B | Rising |
| Net Income | $0.8B | $0.1B | −$8.9B | Rising |
| Free Cash Flow | $1.2B | −$0.4B | −$8.5B | Rising |
Common questions about American Airlines Group Inc.
Is American Airlines Group Inc. at risk of going bankrupt?
American Airlines Group Inc.'s Altman Z-Score of 0.72 places it in the distress zone. This metric uses balance sheet ratios to predict bankruptcy probability within 2 years. A score below 1.8 signals distress, while above 3.0 indicates safety.
What is American Airlines Group Inc.'s intrinsic value based on DCF?
Our DCF model estimates American Airlines Group Inc.'s intrinsic value at $21.79 per share. The current margin of safety is 43.8%. This estimate is based on historical free cash flow trends and a risk-adjusted discount rate.
Does American Airlines Group Inc. have a competitive moat?
American Airlines Group Inc. receives a moat rating of 2.3 out of 5 stars, based on ROIC stability, gross margin trends, and estimated switching costs. A rating above 3.5 suggests a durable competitive advantage.
Does American Airlines Group Inc. pay a dividend?
American Airlines Group Inc. does not currently pay a regular dividend, or has suspended its dividend. Check the dividend safety section for the latest status.
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 20, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
AAL analysis methodology: How we calculate fair value, Z-Scores, and moat ratings