American Airlines Group (AAL)vsSouthwest Airlines Company (LUV)
AAL
American Airlines Group
$12.79
-4.19%
INDUSTRIALS · Cap: $8.46B
LUV
Southwest Airlines Company
$39.99
-3.20%
INDUSTRIALS · Cap: $19.55B
Smart Verdict
WallStSmart Research — data-driven comparison
American Airlines Group generates 94% more annual revenue ($55.99B vs $28.88B). LUV leads profitability with a 2.8% profit margin vs 0.4%. LUV appears more attractively valued with a PEG of 0.24. LUV earns a higher WallStSmart Score of 68/100 (B-).
AAL
Hold47
out of 100
Grade: D+
LUV
Strong Buy68
out of 100
Grade: B-
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
+72.3%
Fair Value
$51.88
Current Price
$12.79
$39.09 discount
Margin of Safety
+64.5%
Fair Value
$144.78
Current Price
$39.99
$104.79 discount
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Growing faster than its price suggests
Generating 3.4B in free cash flow
Growing faster than its price suggests
Earnings expanding 50.8% YoY
Reasonable price relative to book value
Areas to Watch
ROE of 0.0% — below average capital efficiency
0.4% margin — thin
Weak financial health signals
Premium valuation, high expectations priced in
Moderate valuation
Grey zone — moderate risk
2.8% margin — thin
Operating margin of 4.5%
Comparative Analysis Report
WallStSmart ResearchBull Case : AAL
The strongest argument for AAL centers on PEG Ratio, Free Cash Flow. Revenue growth of 10.8% demonstrates continued momentum. PEG of 0.51 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. Revenue growth of 12.8% demonstrates continued momentum. PEG of 0.24 suggests the stock is reasonably priced for its growth.
Bear Case : AAL
The primary concerns for AAL are Return on Equity, Profit Margin, Piotroski F-Score. A P/E of 41.3x leaves little room for execution misses. Thin 0.4% margins leave little buffer for downturns.
Bear Case : LUV
The primary concerns for LUV are P/E Ratio, Altman Z-Score, Profit Margin. Thin 2.8% margins leave little buffer for downturns.
Key Dynamics to Monitor
AAL carries more volatility with a beta of 1.28 — expect wider price swings.
LUV is growing revenue faster at 12.8% — sustainability is the question.
AAL generates stronger free cash flow (3.4B), providing more financial flexibility.
Monitor AIRLINES industry trends, competitive dynamics, and regulatory changes.
Bottom Line
LUV scores higher overall (68/100 vs 47/100) and 12.8% revenue growth. AAL offers better value entry with a 72.3% margin of safety. Both earn "Strong 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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