Does United Airlines Still Offer Value After Recent 138% Share Price Surge in 2025?

Thinking about what to do with United Airlines Holdings stock right now? You are not alone. With the ticker UAL making eye-catching moves lately, investors are watching closely to see if the recent run has legs or if the ride is just beginning to hit turbulence.

Let us talk numbers for a moment. Over the past three months, UAL has climbed more than 31%, and in the last year, total returns have soared nearly 138%. While some of that lift has come from broad travel demand bouncing back, there is also a clear shift in how the market is weighing risk versus reward for airlines, especially as United pushes to expand routes and improve efficiency. In the shorter term, the stock is up about 8% in the last 30 days, and after a small dip yesterday, it closed at $99.84. The stock is still holding most of its earlier gains as confidence in the sector grows.

But are these gains justified, or has the market gotten ahead of itself? That is where a valuation deep dive comes in. Based on a variety of commonly used valuation checks, such as price-to-earnings, price-to-book, discounted cash flow, and others, United Airlines scores a 3 out of 6 for undervaluation. This means it is considered undervalued by three different measures, but not across the board.

Next, we will break down which valuation approaches matter and how they work in United’s favor, along with a preview of an even smarter way to spot value buried in the numbers.

United Airlines Holdings delivered 137.8% returns over the last year. See how this stacks up to the rest of the Airlines industry.

Approach 1: United Airlines Holdings Cash Flows

A Discounted Cash Flow (DCF) model estimates what a company is truly worth by projecting its expected future cash flows and then discounting those numbers back to today’s value. This method helps investors look past short-term volatility by focusing on the cash United Airlines Holdings is expected to generate for shareholders over time.

United’s most recent reported Free Cash Flow stands at $2.89 billion. Looking ahead, analysts forecast some ups and downs, projecting Free Cash Flow of about $822 million in 2035. Over the next decade, yearly FCF is expected to remain positive but trend lower as travel growth normalizes and operational investments increase. Using the two-stage Free Cash Flow to Equity model, the calculated intrinsic fair value for United is $34.33 per share.

Currently, United Airlines is trading near $99.84, a level far above the DCF-based estimate. Based on cash flow projections and discounted value, the stock is considered 190.9% overvalued by this method alone.

Result: OVERVALUED

Our DCF analysis suggests United Airlines Holdings may be overvalued by 190.9%. Find undervalued stocks based on DCF analysis or create your own screener to find better value opportunities.

Approach 2: United Airlines Holdings Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation tool for profitable companies like United Airlines Holdings because it quickly tells us how much investors are willing to pay for each dollar of earnings. A lower PE can signal an undervalued stock, while a higher PE may reflect stronger future growth expectations or lower perceived risk.

What makes a "fair" PE ratio depends on factors such as growth prospects, profitability, and industry trends. Faster-growing companies or those with a stable track record often command higher PE multiples, while riskier or cyclical businesses typically trade at lower valuations.

United Airlines Holdings currently trades at a PE ratio of 9.76x. This matches almost exactly with the Airlines industry average PE of 9.76x and sits well below the broader peer group average of 21.45x. However, Simply Wall St’s Fair Ratio model, which weighs United's growth outlook, earnings quality, and risks, suggests a fair PE for United sits at 13.20x.

With its actual multiple below the Fair Ratio, United appears slightly undervalued by this measure. The gap between the fair and current PE is significant enough to tip the scales in favor of value.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your United Airlines Holdings Narrative

Beyond ratios and models, a Narrative is simply your perspective on a company’s story. This includes how you expect its revenues, margins, and future prospects to develop, as well as what you see as a fair value today. Narratives connect the big picture, such as United’s global expansion or premium upgrades, directly to a tailored financial forecast and the resulting fair value. This approach makes complex investing decisions more understandable and actionable.

On Simply Wall St, Narratives are easy to use and update automatically whenever new information like earnings or news is released, allowing millions of investors to rethink their positions on United Airlines Holdings as market realities evolve. Instead of just responding to numbers, you can test your own story and assumptions, then compare the resulting Fair Value to today’s market price to determine your approach to the stock.

For example, some investors believe United’s modernization and international growth could drive the share price as high as $130, while others see long-term challenges and set targets as low as $43. Narratives present these differing viewpoints side by side, helping you select your own investment strategy with confidence.

Do you think there's more to the story for United Airlines Holdings? Create your own Narrative to let the Community know!

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.

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