American Airlines Group (AAL)vsSouthwest Airlines Company (LUV)
AAL
American Airlines Group
$10.43
-3.43%
INDUSTRIALS · Cap: $7.17B
LUV
Southwest Airlines Company
$39.41
-3.57%
INDUSTRIALS · Cap: $20.78B
Smart Verdict
WallStSmart Research — data-driven comparison
American Airlines Group generates 95% more annual revenue ($54.63B vs $28.06B). AAL leads profitability with a 20.0% profit margin vs 1.6%. AAL appears more attractively valued with a PEG of 0.09. LUV earns a higher WallStSmart Score of 63/100 (C+).
AAL
Hold44
out of 100
Grade: D
LUV
Buy63
out of 100
Grade: C+
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
-1076.2%
Fair Value
$1.22
Current Price
$10.43
$9.21 premium
Margin of Safety
-39.1%
Fair Value
$36.97
Current Price
$39.41
$2.44 premium
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Growing faster than its price suggests
Keeps 20 of every $100 in revenue as profit
Growing faster than its price suggests
Earnings expanding 50.8% YoY
Reasonable price relative to book value
Areas to Watch
2.5% revenue growth
ROE of 0.0% — below average capital efficiency
Operating margin of 3.6%
Weak financial health signals
Grey zone — moderate risk
ROE of 4.8% — below average capital efficiency
1.6% margin — thin
Premium valuation, high expectations priced in
Comparative Analysis Report
WallStSmart ResearchBull Case : AAL
The strongest argument for AAL centers on PEG Ratio, Profit Margin. Profitability is solid with margins at 20.0% and operating margin at 3.6%. PEG of 0.09 suggests the stock is reasonably priced for its growth.
Bull Case : LUV
The strongest argument for LUV centers on PEG Ratio, EPS Growth, Price/Book. PEG of 0.20 suggests the stock is reasonably priced for its growth.
Bear Case : AAL
The primary concerns for AAL are Revenue Growth, Return on Equity, Operating Margin. A P/E of 60.3x leaves little room for execution misses.
Bear Case : LUV
The primary concerns for LUV are Altman Z-Score, Return on Equity, Profit Margin. A P/E of 50.9x leaves little room for execution misses. Thin 1.6% margins leave little buffer for downturns.
Key Dynamics to Monitor
AAL carries more volatility with a beta of 1.19 — expect wider price swings.
LUV is growing revenue faster at 7.4% — sustainability is the question.
LUV generates stronger free cash flow (-564M), providing more financial flexibility.
Monitor AIRLINES industry trends, competitive dynamics, and regulatory changes.
Bottom Line
LUV scores higher overall (63/100 vs 44/100). Both earn "Buy" and "Hold" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
American Airlines Group
INDUSTRIALS · AIRLINES · USA
American Airlines Group Inc. is an American publicly traded airline holding company headquartered in Fort Worth, Texas.
Southwest Airlines Company
INDUSTRIALS · AIRLINES · USA
Southwest Airlines Co., typically referred to as Southwest, is one of the major airlines of the United States and the world's largest low-cost carrier airline. It is headquartered in Dallas, Texas.
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