April 24, 2025 – USA – American Airlines Group Inc. (NASDAQ: AAL) has become one of the most closely watched stocks under $10, drawing the attention of investors and analysts following its recent Q1 earnings report and long-term strategic moves.
Despite reporting a Q1 loss of $0.59 per share, the airline beat Wall Street estimates by $0.03, signaling a slightly stronger-than-expected bottom line. However, revenue for the quarter came in at $12.6 billion, narrowly missing analyst expectations of $12.68 billion. American Airlines offered Q2 guidance of $0.50 to $1.00 EPS, with the mid-range aligning with Wall Street’s $0.96 forecast, offering a glimpse of optimism amid a turbulent market.
Shares of AAL have experienced significant pressure, closing at $9.32, down over 45% in the last 3 months and 34% year-over-year, according to recent trading data. The stock remains under scrutiny after seeing 10 negative EPS revisions in the past 90 days and no positive upgrades. Yet, some see this as a buying opportunity rather than a red flag.
Why Investors Are Taking a Closer Look at AAL Stock
While market sentiment remains cautious, some analysts and hedge funds are betting on American Airlines as one of the top cheap stocks to buy under $10. In fact, AAL ranks #1 on a recent list of the best budget-friendly stocks, based on hedge fund ownership and analyst confidence. The stock’s current valuation—with a forward P/E under 15—and its robust loyalty-driven revenue model make it a unique play in the volatile airline sector.
The Loyalty Engine Powering American Airlines
One of American’s most powerful assets is its AAdvantage loyalty program, which generated $6.1 billion in cash in 2024—a 17% year-over-year increase. This included a major one-time payment tied to a new 10-year exclusive credit card deal with Citi, which has become the sole issuer of the co-branded AAdvantage cards in the U.S.
The program continues to be a major revenue driver: In Q4 2024 alone, AAdvantage members were responsible for 75% of premium cabin bookings, and co-branded card spending rose 9.5% year-over-year. The surge in loyalty and engagement has positioned the program as a stable income stream amid market turbulence.
Market Sentiment and Broader Trends
According to Fundstrat’s Tom Lee, the market may be moving past peak uncertainty. Although volatility remains, he sees resilience in corporate earnings and points to potential macroeconomic catalysts, like easing trade tensions, that could support equities. Lee also emphasizes the importance of investing in companies tied to long-term structural themes—something American Airlines has leaned into through its global partnerships and growing loyalty ecosystem.
Should You Buy AAL Stock Now?
With its deeply discounted price, strong loyalty revenue, and improving cost efficiencies, AAL is increasingly being viewed as more than just a recovery play. While it’s not without risk—especially given the earnings volatility and macro headwinds—the airline’s positioning, particularly in premium travel and partner integrations, gives it a potential edge.
For investors looking for value in beaten-down large-cap stocks, AAL offers a compelling case. As we enter a crucial earnings season, the airline’s loyalty-driven cash flow and improving fundamentals could spark renewed investor interest and lift sentiment around the stock.