Frontier Group (NASDAQ:ULCC) versus American Airlines Group (NASDAQ:AAL) Head-To-Head Analysis

Frontier Group (NASDAQ:ULCC) and American Airlines Group (NASDAQ:AAL) are both transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Profitability

This table compares Frontier Group and American Airlines Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Frontier Group N/A N/A N/A
American Airlines Group -61.53% N/A -17.25%

Institutional & Insider Ownership

51.4% of American Airlines Group shares are held by institutional investors. 0.7% of American Airlines Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Frontier Group and American Airlines Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Frontier Group N/A N/A N/A N/A N/A
American Airlines Group $17.34 billion 0.87 -$8.89 billion ($19.66) -1.20

Frontier Group has higher earnings, but lower revenue than American Airlines Group.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Frontier Group and American Airlines Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontier Group 0 2 8 0 2.80
American Airlines Group 4 8 2 0 1.86

Frontier Group presently has a consensus target price of $24.00, suggesting a potential upside of 26.45%. American Airlines Group has a consensus target price of $18.15, suggesting a potential downside of 23.21%. Given Frontier Group’s stronger consensus rating and higher probable upside, analysts clearly believe Frontier Group is more favorable than American Airlines Group.

Summary

Frontier Group beats American Airlines Group on 5 of the 8 factors compared between the two stocks.

About Frontier Group

Frontier Group Holdings, Inc., a low-fare airline company, provides air transportation for passengers. The company operates an airline that serves approximately 110 airports throughout the United States and international destinations in the Americas. As of December 31, 2020, it had a fleet of 104 Airbus single-aisle aircraft comprising 4 A319ceos, 19 A320ceos, 60 A320neos, and 21 A321ceos. The company offers its services through direct distribution channels, including its website, mobile app, and call center. Frontier Group Holdings, Inc. was incorporated in 2013 and is headquartered in Denver, Colorado.

About American Airlines Group

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. The company provides scheduled air transportation services for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C., as well as through partner gateways in London, Madrid, Seattle/Tacoma, Sydney, and Tokyo. As of December 31, 2020, it operated a mainline fleet of 855 aircraft. The company was formerly known as AMR Corporation and changed its name to American Airlines Group Inc. in December 2013. American Airlines Group Inc. was founded in 1930 and is headquartered in Fort Worth, Texas.

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