Why You Shouldn’t Be Buying Boeing Stock
Boeing (NYSE:BA) dropped 5% on Thursday, June 12, following the tragic crash of an Air India 787 Dreamliner, which killed 241 people. While the 787 is generally considered a very safe aircraft, Boeing has faced significant scrutiny and penalties over the past year due to persistent quality control issues, particularly concerning its 737 MAX fleet. See – Boeing Stock Faces Fresh Crisis After 787 Dreamliner Crash.
Despite its current price of around $205 and what might appear to be a moderate valuation, we believe Boeing stock is not an attractive buy at this time. Our analysis, which evaluates Boeing’s current valuation against its recent operating performance and financial health, reveals several major concerns.
We assessed Boeing across key parameters: Growth, Profitability, Financial Stability, and Downturn Resilience. Our findings indicate that the company has a very weak operating performance and financial condition, making it an unfavorable investment right now. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative — having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
Image by Lee Rosario from Pixabay
How Does Boeing’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, BA stock is currently valued in line with the broader market.
- Boeing has a price-to-sales (P/S) ratio of 2.3 vs. a figure of 3.0 for the S&P 500
How Have Boeing’s Revenues Grown Over Recent Years?
Boeing’s Revenues have grown marginally over recent years.
- Boeing has seen its top line grow at an average rate of 4.9% over the last 3 years (vs. increase of 5.5% for S&P 500)
- Its revenues have shrunk 9.2% from $76 Bil to $69 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
- Also, its quarterly revenues grew 17.7% to $19 Bil in the most recent quarter from $17 Bil a year ago (vs. 4.8% improvement for S&P 500)
How Profitable Is Boeing?
Boeing’s profit margins are considerably worse than most companies in the Trefis coverage universe.
- Boeing’s Operating Income over the last four quarters was $-10 Bil, which represents a very poor Operating Margin of -14.7% (vs. 13.2% for S&P 500)
- Boeing’s Operating Cash Flow (OCF) over this period was $-10 Bil, pointing to a very poor OCF Margin of -14.9% (vs. 14.9% for S&P 500)
- For the last four-quarter period, Boeing’s Net Income was $-12 Bil – indicating a very poor Net Income Margin of -16.6% (vs. 11.6% for S&P 500)
Does Boeing Look Financially Stable?
Boeing’s balance sheet looks moderately strong.
- Boeing’s Debt figure was $54 Bil at the end of the most recent quarter, while its market capitalization is $154 Bil (as of 6/12/2025). This implies a high Debt-to-Equity Ratio of 32.9% (vs. 19.9% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
- Cash (including cash equivalents) makes up $24 Bil of the $156 Bil in Total Assets for Boeing. This yields a moderate Cash-to-Assets Ratio of 15.1% (vs. 13.8% for S&P 500)
How Resilient Is BA Stock During A Downturn?
BA stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on BA stock? Our dashboard How Low Can Boeing Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous 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, vs. a peak-to-trough decline of 25.4% for the S&P 500
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is 264.27 on 17 December 2023 and currently trades at 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, vs. a peak-to-trough decline of 33.9% for the S&P 500
- The stock is yet to recover to its pre-Crisis high
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, vs. 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
Putting All The Pieces Together: What It Means For BA Stock
In summary, Boeing’s performance across the parameters detailed above are as follows:
- Growth: Neutral
- Profitability: Extremely Weak
- Financial Stability: Neutral
- Downturn Resilience: Extremely Weak
- Overall: Very Weak
Based on our analysis, Boeing’s weak performance across key metrics isn’t adequately reflected in its seemingly moderate stock valuation. This disparity is why we believe BA stock is currently very unattractive and a poor investment.
Of course, our assessment could be wrong. If Boeing successfully resolves its 737 MAX issues and significantly increases production and deliveries, the stock could see higher levels. Nevertheless, from an operational and financial standpoint, it remains a risky pick. See, there always remains a meaningful risk when investing in a single, or just a handful of stocks. Consider the Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates