Air France KLM plunged -8.4% change Friday, and is now trading at a price of $1.7 per share.
Air France KLM returned losses of -15.0% last year, with its stock price reaching a high of $2.01 and a low of $1.14. Over the same period, the stock underperformed the S&P 500 index by -17.0%. As of April 2023, the company's 50-day average price was $1.75. Air France-KLM SA, together with its subsidiaries, provides passenger and cargo transportation services and aeronautical maintenance in Metropolitan France, Benelux, rest of Europe, and internationally. Based in Paris, France, the Mid-Cap Industrials company has 58,186 full time employees. Air France KLM has not offered a regular dividend during the last year.
The Company's Revenues Are Declining:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $27,189 | $11,088 | $14,315 | $26,393 |
| Gross Margins | 32.0% | 0.0% | 21.7% | 30.2% |
| Operating Margins | 4.0% | -41.9% | -11.5% | 3.9% |
| Net Margins | 1.07% | -63.83% | -23.0% | 2.76% |
| Net Income (MM) | $290 | -$7,078 | -$3,292 | $728 |
| Net Interest Income | -$614,000 | -$641,000 | -$831,000 | -$677,000 |
| Depreciation & Amort. | -$2,987,000 | -$2,859,000 | -$2,371,000 | -$2,422,000 |
| Earnings Per Share | $0.31 | -$8.38 | -$5.95 | $1.1 |
| EPS Growth | n/a | -2803.23% | 29.0% | 118.49% |
| Diluted Shares (MM) | 903 | 847 | 579 | 2,569 |
| Free Cash Flow (MM) | $523 | -$4,925 | -$668 | $1,884 |
| Capital Expenditures (MM) | -$3,372 | -$2,099 | -$2,202 | -$2,972 |
| Net Current Assets (MM) | -$19,897 | -$25,734 | -$23,770 | -$23,778 |
| Current Ratio | 0.68 | 0.84 | 0.91 | 0.81 |
| Long Term Debt (MM) | $3,333 | $11,263 | $8,373 | $6,494 |
| Net Debt / EBITDA | 0.36 | -2.01 | -10.1 | 0.47 |
Air France KLM's financial statements include several red flags such as weak revenue growth and decreasing reinvestment in the business, slimmer gross margins than its peers, and consistently negative margins with a stable trend. Additionally, the firm has an unconvincing cash flow history. On the other hand, the company benefits from low leverage and a strong EPS growth Trend.
Air France KLM Is Fairly Valued:
Air FranceKLM has a trailing twelve month P/E ratio of 1.6 compared to the Industrials sector's average of 20.49. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 4 years of reported EPS is 37.2%. On this basis, Air FranceKLM's PEG ratio is 0.04. Using instead the 11.0% weighted average of Air FranceKLM's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 0.14, which implies that its shares may be underpriced.
