Delta Air Lines (DAL Symbol) Q4 Earnings: Should You Buy Now or Wait?

Delta Air Lines recently announced its fourth-quarter 2025 financial results on January 13th, showcasing a mix of positive operational metrics alongside emerging challenges. The airline’s performance reflects the complexity of the current aviation market—strong demand internationally and solid corporate bookings are countered by persistent cost pressures that investors need to carefully weigh.

What the Numbers Tell Us About DAL’s Latest Quarter

When Delta released its Q4 2025 earnings, the delta symbol (DAL) on the stock market showed the airline delivering $1.55 in earnings per share, slightly exceeding the Zacks Consensus Estimate of $1.53. However, this masked an important reality: on a year-over-year basis, earnings actually declined by 16.22% due to escalating labor costs.

The revenue story was more encouraging. Total revenues hit $16 billion, beating analyst expectations of $15.63 billion and marking a 2.9% year-over-year increase. When adjusted for third-party refinery sales, operating revenues grew 1.2% to $14.6 billion. About 2 percentage points of growth were erased by the government shutdown’s impact on domestic travel, a headwind the company flagged previously.

What stands out is Delta’s consistent track record: the airline has now beaten earnings expectations for four consecutive quarters, averaging a 7.94% surprise margin. For a mature airline facing structural headwinds, maintaining this earnings surprise streak demonstrates solid operational execution.

International Growth and Fleet Modernization: The Silver Lining

Delta’s leadership is betting big on the future through significant aircraft investments. The company reached an agreement with The Boeing Company to purchase 30 Boeing 787-10 widebody aircraft, with options to acquire another 30. First deliveries are scheduled for 2031.

These new jets represent more than just newer planes—they’re central to Delta’s international expansion playbook. The 787-10s offer enhanced fuel efficiency and improved operating economics compared to older aircraft, directly addressing one of the airline’s persistent pain points. The order also strengthens Delta’s long-haul capabilities across Transatlantic and Pacific routes, where the airline has been seeing particularly strong demand.

Supporting this fleet expansion, Delta also signed a separate agreement with GE Aerospace to service the GEnx engines that will power these new aircraft. Meanwhile, Alaska Airlines (a subsidiary of Alaska Air Group) is pursuing its own aggressive Boeing strategy, ordering 105 new 737-10 jets and five 787 aircraft with delivery extending through 2035. This broader industry trend signals confidence in travel demand recovery post-pandemic disruptions.

Stock Performance and Market Sentiment

Over the past six months, Delta’s share price has outperformed both the broader airline industry and the S&P 500 Index, suggesting investors have rewarded the company’s operational improvements and revenue growth. The delta symbol has been a relative winner in a competitive sector.

However, this recent strength makes the current valuation question even more critical for prospective buyers.

Rising Costs: The Elephant in the Room

Here’s where the earnings story gets complicated. Total operating expenses climbed 5% year-over-year to $14.5 billion in Q4 2025, a troubling trend given that both fuel costs and maintenance expenses actually declined. This means cost inflation is coming from other areas—and they’re significant.

Salaries and related compensation surged 11% year-over-year to $4.59 billion. This reflects the pilot contract ratified in 2023, which locked in higher wage structures for years to come. Landing fees and facility rents jumped 14%, while ancillary business expenses and refinery operations rose 20%.

The non-fuel unit cost (adjusted CASM-Ex) increased 4% year-over-year to 14.27 cents in the quarter. Delta’s management has signaled that labor agreement pressures will persist, meaning investors should expect continued cost headwinds even if the airline grows revenues. This structural cost challenge could significantly constrain future profitability unless the airline finds offsetting efficiencies.

The Valuation Problem

When comparing Delta’s delta symbol valuation against peers, the picture becomes less attractive. Using the forward 12-month price-to-sales ratio (P/S-F12M), Delta trades at 0.70X compared to the airline industry average of 0.59X. More concerning, this valuation sits above the company’s own five-year median of 0.53X.

This means Delta isn’t just trading at a premium to its industry peers—it’s also trading above its historical average. For value-conscious investors, the stock looks stretched despite the solid Q4 results.

Investment Perspective: Proceed With Caution

The gap between Delta’s solid operational performance and concerning valuation metrics creates a dilemma for investors. The company has genuinely improved its execution, international demand remains strong, and the fleet modernization strategy makes long-term sense.

Yet rushing to buy the delta symbol at current levels seems premature. The combination of persistent labor cost inflation, already-elevated valuation multiples, and the lack of visibility on when cost pressures might ease suggests waiting for a more favorable entry point.

For those already holding Delta shares, maintaining positions remains reasonable given the company’s solid long-term fundamentals and consistent earnings execution. For new investors, however, it makes sense to monitor Delta’s progress and specifically watch for:

• Signs that wage cost pressures are stabilizing
• Evidence that pricing power can offset labor inflation
• A pullback in the stock that brings valuations closer to historical norms

The Zacks Rank of #3 (Hold) appropriately captures this cautious stance. Delta Air Lines has proven it can execute, but execution alone doesn’t justify overpaying for the stock.