United Airlines Holdings Inc (UAL)

Conclusion

United Airlines Holdings operates passenger and cargo air transportation through mainline and regional fleets across the United States, Canada, the Atlantic, the Pacific and Latin America. On 2026-11-09 the share price was 120.38 USD, giving a market capitalisation of 39.11 billion USD.

The verdict is fair. The fair value band runs from 82.98 to 124.47 USD with a midpoint of 103.72 USD, and the margin of safety is -13.8% at the current price. The P/E of 10.93 is close to its ten-year median of 10.21, while price to free cash flow of 35.05 sits far above its median of 11.11. The DCF gives 95.08 USD per share at a discount rate of 11.73%, and the fair value from historical multiples is 112.37 USD. The reverse DCF implies growth of 18.9% a year, against five-year revenue growth of 30.9% and ten-year growth of 4.6%.

The strongest numbers are ROIC of 11.4% against a WACC of 8.0%, a Piotroski score of 8 out of 9, and five-year free cash flow conversion of 92.9%. The weakest are the Altman Z-score of 1.44, the current ratio of 0.75, and the current-year estimate revision of -31.1% over 90 days.

Financial health

Financial strength is red. The current ratio of 0.75 and the Altman Z-score of 1.44 pull it down, while net debt to EBITDA of 2.30 and interest coverage of 4.06 are assessed as neutral. The quick ratio is 0.65 and debt to equity is 1.93, both as of 2026-09-30. The Altman model was designed for manufacturers and an airline is not one, but the company's score falls in the distress zone. Insolvency risk: low, about 1.8% by the estimate of the Ohlson model over one to two years, based on the 2025-12-31 statements. Debt growth measured against revenue growth over five years is -32.0%, on an annual basis.

Earnings quality

Earnings quality is yellow. The Piotroski score of 8 out of 9, the Beneish M-score of -2.945, which reads as unlikely to be manipulated, and five-year free cash flow conversion of 92.9% hold it up. Trailing free cash flow conversion of 31.2% and a share count that has risen at 3.2% a year pull it down. Trailing free cash flow after stock-based compensation is 1.12 billion USD, but the company's stock-based compensation is not available, so dilution from it cannot be assessed. The accrual ratio is -0.0675. The company beat earnings estimates in seven of the last eight quarters, with an average surprise of 6.6%. Estimates have been cut: the current year is down 31.1% over 90 days with 18 downward revisions against 1 upward in the last 30 days, and the next year is down 23.9%.

Profitability

Profitability is green. ROIC of 11.4% against a WACC of 8.0% gives a ROIC minus WACC value of 3.4%, which the model reads as creating value. The five-year median ROIC is 10.5%. The operating margin of 7.5% is close to its ten-year median of 7.9%, and the net margin of 5.5% compares with a median of 5.3%. The gross margin of 65.7% compares with a median of 28.4%, though the two may not be measured on the same basis. Return on equity is 20.2%, but the DuPont split shows that leverage does much of the work: a net margin of 5.68%, an asset turnover of 0.77 and an equity multiplier of 5.00, all as of 2025-12-31.

Growth

Growth is green. Revenue has compounded at 9.5% over three years, 30.9% over five years and 4.6% over ten years. Revenue grew in 8 of 10 comparable years. EPS compounded at 66.2% over three years but fell at -6.2% over ten years. Free cash flow per share grew 27.4% over three years and fell -1.0% over ten years. Analysts expect next-year EPS growth of 64.9%, though those estimates have been cut sharply in recent months.

Valuation

Valuation is yellow. The P/E of 10.93 is a premium of 7.1% to its ten-year median of 10.21, and EV/EBITDA of 6.88 is a premium of 17.3% to its median of 5.87. Price to sales of 0.60 is a premium of 5.9% to its median of 0.56, and price to book of 2.20 is a discount of 7.5% to its median of 2.38. Price to free cash flow of 35.05 is a premium of 215.4% to its median of 11.11. The DCF gives 95.08 USD per share at a discount rate of 11.73%, with 20% growth in the first stage and 2.5% terminal growth. The fair value from historical multiples is 112.37 USD. The reverse DCF implies 18.9% growth against delivered five-year revenue growth of 30.9%, a gap of -12.0%. The company pays no dividend, so the forward yield is 0%. The fair value band rests on fixed assumptions, including a 5% equity risk premium and capped growth, and it is not a price target.

Risks

A current ratio of 0.75 means current liabilities exceed current assets, which leaves little room for a shock to liquidity. An Altman Z-score of 1.44 in the distress zone signals that the balance sheet is weak by that model's measure, even though the Ohlson estimate of insolvency risk is low. A rising share count of 3.2% a year dilutes shareholders unless buybacks reverse it. Trailing free cash flow conversion of 31.2% means that much of recent earnings has not yet turned into cash, and current-year estimate cuts of 31.1% suggest earnings may fall short of expectations. The company's stock-based compensation is not available, so its effect on earnings cannot be measured. This analysis also lacks a debt maturity schedule and revenue by segment, so refinancing risk and the performance of individual businesses cannot be assessed.