There are many reasons for investors' disdain with the Franco-Dutch company, which are well documented in Air France-KLM: the most undervalued stock of the moment? Amongst other things, we would point to sluggish growth, erratic profitability and, following a series of painful capital increases, a ninefold increase in the number of shares outstanding in ten years.

Our team of analysts seizes the opportunity to point out that net income, or accounting profit, is often a work of fiction, especially in the most capital-intensive sectors. It is therefore often unrelated to actual profit, or free cash flow, which corresponds to the profit actually distributable to shareholders when it is not redirected to acquisitions or debt repayment.

Like all other airlines, Air France-KLM's net income has nothing to do with its free cash flow; in other words, its accounting profit has nothing to do with its actual profit. The divergence was substantial throughout the decade 2015-2024, except in 2023 when both were almost identical.

For once, Air France-KLM's free cash flow is higher than its accounting profit. Thus, over the last decade, the company accumulated €6bn in accounting losses, but generated €4bn in free cash flow over the period.

This amount is attractive when compared to the market capitalization of $2bn, as Air France-KLM could theoretically generate this amount in just five years of operation. However, our team of analysts also jumps at the opportunity to point out that a company's value is not just its market capitalization; it must also take into account its net debt.

The enterprise value of the Franco-Dutch company, if we add the €9bn in net debt expected at the end of 2025 to its current market capitalization, reaches €11bn. In other words, this is more than 27x the annualized free cash flow over the last decade. To justify such a valuation—worthy of a solid growth company—the next decade had better be nothing like the one just ended.

Who would really be willing to take that bet?