Let's talk about the popular Delta Air Lines, Inc. (NYSE:DAL). The company's shares saw a significant share price rise of 42% in the past couple of months on the NYSE. The company is inching closer to its yearly highs following the recent share price climb. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let's examine Delta Air Lines's valuation and outlook in more detail to determine if there's still a bargain opportunity.

What's The Opportunity In Delta Air Lines?

Great news for investors – Delta Air Lines is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $101.55, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Delta Air Lines's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Delta Air Lines?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 8.9% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for Delta Air Lines, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since DAL is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you've been keeping an eye on DAL for a while, now might be the time to enter the stock. Its future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy DAL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

So while earnings quality is important, it's equally important to consider the risks facing Delta Air Lines at this point in time. While conducting our analysis, we found that Delta Air Lines has 2 warning signs and it would be unwise to ignore them.

If you are no longer interested in Delta Air Lines, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.