Boeing (NYSE:BA) declined by 5% on Thursday, June 12, following the devastating crash of an Air India 787 Dreamliner, resulting in the death of 241 individuals. Although the 787 is generally regarded as a very safe aircraft, Boeing has encountered considerable scrutiny and penalties over the past year due to ongoing quality control problems, especially regarding its 737 MAX fleet. Refer to – Boeing Stock Faces Fresh Crisis After 787 Dreamliner Crash.
Despite its current price of approximately $205, which may seem like a reasonable valuation, we do not consider Boeing stock to be a compelling investment at this moment. Our evaluation, which compares Boeing’s existing valuation to its recent operational performance and financial health, reveals several significant issues.
We evaluated Boeing across critical criteria: Growth, Profitability, Financial Stability, and Downturn Resilience. Our results demonstrate that the company exhibits very poor operating performance and financial health, making it an undesirable investment at this time. However, if you are looking for potential upside with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative — having outperformed the S&P 500 and delivered returns exceeding 91% since it was established.
What Does Boeing’s Valuation Look Like Compared to The S&P 500?
In terms of what you pay per dollar of sales or profit, BA stock is currently valued similarly to the overall market.
- Boeing has a price-to-sales (P/S) ratio of 2.3, whereas the S&P 500 stands at 3.0
How Have Boeing’s Revenues Evolved in Recent Years?
Boeing’s Revenues have experienced modest growth over the recent years.
- Boeing’s top line has increased at an average rate of 4.9% over the last 3 years (compared to a 5.5% rise for the S&P 500)
- Its revenues have declined by 9.2% from $76 billion to $69 billion in the past 12 months (in contrast to the S&P 500’s growth of 5.5%)
- Additionally, its quarterly revenues rose by 17.7% to $19 billion in the most recent quarter up from $17 billion a year earlier (versus a 4.8% improvement for the S&P 500)
What Is Boeing’s Profitability Like?
Boeing’s profit margins are significantly lower than most companies in the Trefis coverage universe.
- Boeing’s Operating Income during the last four quarters was $-10 billion, which represents a very poor Operating Margin of -14.7% (compared to 13.2% for S&P 500)
- Boeing’s Operating Cash Flow (OCF) over this time was $-10 billion, indicating a very poor OCF Margin of -14.9% (versus 14.9% for S&P 500)
- In the last four-quarter period, Boeing’s Net Income was $-12 billion – signifying a very poor Net Income Margin of -16.6% (compared to 11.6% for S&P 500)
Is Boeing Financially Stable?
Boeing’s balance sheet appears moderately solid.
- Boeing’s total Debt was $54 billion at the conclusion of the most recent quarter, while its market capitalization stands at $154 billion (as of 6/12/2025). This results in a high Debt-to-Equity Ratio of 32.9%(compared to 19.9% for S&P 500). [Note: A lower Debt-to-Equity Ratio is preferable]
- Cash (including cash equivalents) accounts for $24 billion of the $156 billion in total assets for Boeing. This results in a moderate Cash-to-Assets Ratio of 15.1% (in contrast to 13.8% for S&P 500)
How Resilient Is BA Stock in a Downturn?
BA stock has performed significantly worse than the benchmark S&P 500 index during several recent downturns. Concerned about the effects of a market crash on BA stock? Our dashboard How Low Can Boeing Stock Go In A Market Crash? provides a detailed analysis of how the stock has performed during and after prior market crashes.
Inflation Shock (2022)
- BA stock fell 57.0% from a high of $269.19 on 12 March 2021 to $115.86 on 13 June 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500
- The stock has not yet recovered to its pre-crisis peak
- The highest the stock has reached since then is 264.27 on 17 December 2023 and currently trades around $205
COVID-19 Pandemic (2020)
- BA stock fell 72.7% from a high of $347.45 on 12 February 2020 to $95.01 on 20 March 2020, versus a peak-to-trough decline of 33.9% for the S&P 500
- The stock remains unrecovered to its pre-crisis peak
Global Financial Crisis (2008)
- BA stock fell 72.6% from a high of $107.23 on 25 July 2007 to $29.36 on 3 March 2009, compared with a peak-to-trough decline of 56.8% for the S&P 500
- The stock fully recovered to its pre-crisis peak by 18 July 2013
Bringing Everything Together: Implications for BA Stock
In conclusion, Boeing’s performance in the parameters outlined above is as follows:
- Growth: Neutral
- Profitability: Extremely Weak
- Financial Stability: Neutral
- Downturn Resilience: Extremely Weak
- Overall: Very Weak
Based on our evaluation, Boeing’s lackluster performance across essential metrics is not adequately reflected in its seemingly moderate stock valuation. This discrepancy is why we believe BA stock is currently very unattractive and represents a poor investment.
Naturally, our assessment may be incorrect. If Boeing successfully addresses its 737 MAX challenges and substantially ramps up production and deliveries, the stock could rise to higher levels. Nevertheless, from both an operational and financial viewpoint, it remains a risky choice. Be aware that there is always a significant risk involved when investing in a single stock or just a few stocks. Consider the Trefis High Quality (HQ) Portfolio which, with a selection of 30 stocks, has a history of comfortably outperforming the S&P 500 over the last four-year period. What is the reason? As a collective, HQ Portfolio stocks have generated better returns with less risk compared to the benchmark index; resulting in a less turbulent investment experience, as demonstrated in HQ Portfolio performance metrics.
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