Is American Airlines Group, Inc. overvalued or undervalued?

As of 23 January 2020, the valuation grade for American Airlines Group, Inc. moved from expensive to risky, indicating a significant shift in its perceived value. The company appears to be undervalued based on its current metrics. Notably, the P/E ratio stands at 6, while the EV to EBITDA ratio is 6.00, and the EV to Sales ratio is 0.55, suggesting that the company is trading at a discount relative to its earnings and sales.
When compared to peers, American Airlines' P/E ratio of 5.262 is lower than United Airlines Holdings, Inc., which has a P/E of 6.219, indicating that American Airlines may be undervalued in relation to its competitor. Additionally, American Airlines' EV to EBITDA ratio is slightly higher than its peer's, which stands at 4.2944, further reinforcing the notion of relative undervaluation. Despite recent underperformance compared to the S&P 500, with a year-to-date return of -37.46%, the current valuation metrics suggest that there may be potential for recovery and growth in the future.