El Al Israel Airlines (TASE:ELAL) has released its financial results for the third quarter and first nine months of 2025, offering a mix of growth and setbacks that investors are sure to be watching closely.
See our latest analysis for El Al Israel Airlines.
El Al Israel Airlines' shares have been on a notable run, recently closing at $14.36 and delivering a 1-year total shareholder return of 72.22% with year-to-date price gains of 79%. Momentum accelerated this past month, which suggests that investors may be eyeing the airline’s growth story a bit more optimistically after its quarterly results. However, longer-term performance remains the real standout since its turnaround several years ago.
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With the stock’s strong run and markets weighing El Al’s latest results, the main question now is whether shares are still undervalued or if the recent outperformance means that future growth is already priced in.
Price-to-Earnings of 5x: Is it justified?
El Al is currently trading at a price-to-earnings (P/E) ratio of 5x, which is well below both industry averages and its recent growth profile. At the last close price of $14.36, this suggests the market may be undervaluing its recent transformation and earning power.
The P/E ratio is a widely used indicator that measures how much investors are willing to pay per unit of current earnings. For El Al, this low multiple can reflect lingering market skepticism, sector risks, or expectations for volatility. It also highlights deep value compared to peers.
Compared to the Asian Airlines industry, where the P/E averages 10.4x, and a peer average of 16.5x, El Al stands out as a bargain. If the market begins to reward consistent profit delivery or rising margins, this metric could move upwards and re-rate closer to peer groups.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Earnings of 5x (UNDERVALUED)
However, ongoing sector volatility and lingering market skepticism could challenge El Al’s upward trajectory if broader industry headwinds take hold.
Find out about the key risks to this El Al Israel Airlines narrative.
Another View: SWS DCF Model Offers Deeper Insight
Looking beyond earnings multiples, our SWS DCF model points to a much higher estimate of fair value for El Al. The current share price is trading over 70% below this benchmark, which suggests that the market may be significantly undervaluing future cash flows and growth prospects.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out El Al Israel Airlines for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 927 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Build Your Own El Al Israel Airlines Narrative
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A great starting point for your El Al Israel Airlines research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Valuation is complex, but we're here to simplify it.
Discover if El Al Israel Airlines might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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