Long-established in the Transportation industry, United Airlines Holdings Inc (UAL, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 0.87%, juxtaposed with a three-month change of 114.83%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of United Airlines Holdings Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 6/10
- Growth rank: 5/10
- GF Value rank: 1/10
- Momentum rank: 9/10
Based on the above method, GuruFocus assigned United Airlines Holdings Inc a GF Score of 68 out of 100, which signals poor future outperformance potential.
Understanding United Airlines Holdings Inc Business
United Airlines Holdings Inc, with a market cap of $29.72 billion and sales of $55.99 billion, operates a major network carrier system through hubs in key U.S. cities and focuses significantly on international and long-haul travel. The company's operating margin stands at 8.36%, reflecting its operational efficiency despite the complex logistics of its widespread network.
Financial Strength Breakdown
United Airlines Holdings Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The interest coverage ratio of 3.09 positions it worse than 69.19% of 818 companies in the Transportation industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt.
The company's Altman Z-Score is just 1.33, which is below the distress zone of 1.81, suggesting potential financial distress in the coming years. Additionally, the low cash-to-debt ratio at 0.46 indicates struggles in managing existing debt levels. The debt-to-equity ratio of 2.67, which is worse than 92.29% of 882 companies in the Transportation industry, and a debt-to-Ebitda ratio of 5.94 further underscore the financial vulnerabilities.
Conclusion
Considering United Airlines Holdings Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. Investors should be cautious and monitor these metrics closely as they could significantly impact the company's future performance.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
