Critical Analysis: Surf Air Mobility (NYSE:SRFM) vs. Japan Airlines (OTCMKTS:JAPSY)

Surf Air Mobility (NYSE:SRFM) and Japan Airlines (OTCMKTS:JAPSY) are both transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.

Valuation and Earnings

This table compares Surf Air Mobility and Japan Airlines”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Surf Air Mobility	$119.43 million	0.76	-$74.91 million	($3.75)	-1.26
Japan Airlines	$12.11 billion	0.77	$706.45 million	$0.92	11.59

Japan Airlines has higher revenue and earnings than Surf Air Mobility. Surf Air Mobility is trading at a lower price-to-earnings ratio than Japan Airlines, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Surf Air Mobility has a beta of 2.92, suggesting that its stock price is 192% more volatile than the S&P 500. Comparatively, Japan Airlines has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Surf Air Mobility and Japan Airlines, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Surf Air Mobility	0	1	2	0	2.67
Japan Airlines	0	0	0	0	0.00

Surf Air Mobility presently has a consensus target price of $6.3333, suggesting a potential upside of 34.32%. Given Surf Air Mobility’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Surf Air Mobility is more favorable than Japan Airlines.

Insider & Institutional Ownership

17.7% of Surf Air Mobility shares are held by institutional investors. 8.0% of Surf Air Mobility shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Surf Air Mobility and Japan Airlines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Surf Air Mobility	-53.48%	N/A	-46.15%
Japan Airlines	6.35%	12.28%	4.37%

Summary

Japan Airlines beats Surf Air Mobility on 8 of the 14 factors compared between the two stocks.

About Surf Air Mobility

Surf Air Mobility Inc. operates as an electric aviation and air travel company in the United States. The company offers an air mobility platform with scheduled routes and on demand charter flights operated by third parties. Surf Air Mobility Inc. is headquartered in Hawthorne, California.

About Japan Airlines

Japan Airlines Co., Ltd., together with its subsidiaries, provides scheduled and non-scheduled air transport services in Japan, Asia, Oceania, North America, and Europe. The company operates through Air Transportation and Other segments. It offers passenger, ground handling, cargo and mail handling, and maintenance services. The company is also involved in the aerial work and other related business; airport peripheral business; and sale of travel package tours. As of March 31, 2023, it operated a fleet of 224 aircraft. The company was formerly known as Japan Airlines International Co., Ltd. and changed its name to Japan Airlines Co., Ltd. in April 2011. The company was founded in 1951 and is headquartered in Tokyo, Japan.