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Believe it or not, American Airlines (NASDAQ: $AAL ) is a small-cap stock.

The largest airline in both the U.S. and the world has seen its stock market valuation plummet since the Covid-19 pandemic devastated the travel industry in 2020 and 2021.

Over the past five years, American Airlines stock has steadily declined and is now trading at less than half the price it was at before the pandemic struck in March 2020.

The result is that American Airlines now has a market capitalization of $8.50 billion U.S., making it a small-cap stock defined as any security with a valuation below $10 billion U.S.

Like most carriers, American Airlines has continued to struggle coming out of the pandemic as travelers, particularly on international flights, have been slow to return.

The Covid-19 pandemic cost the world's airlines a collective net loss of $168 billion U.S., according to the International Civil Aviation Organization (ICAO), a United Nations agency.

AAL stock has attempted several comebacks in recent years, but each attempt has failed. The share price is down 23% this year and currently trading at $13.10 U.S. a share.

It hasn't helped that the company hasn't reinstated the quarterly dividend it suspended in 2020 during the depths of the pandemic. The carrier also remains unprofitable right now.

Despite the struggles, there are signs of hope and optimism to be found with American Airlines and its stock.

At the end of October, American Airlines reported a loss per share of -$0.17 U.S., which was much better than a loss of -$0.28 U.S. expected on Wall Street.

Revenue of $13.69 billion U.S. in this year's third quarter was ahead of the $13.63 billion U.S. expected among analysts.

A record number of Americans are expected to travel this November for Thanksgiving, and American Airlines expects to return to profitability in the current fourth quarter.

Management has forecast earnings of between $0.45 U.S. and $0.75 U.S. per share in this quarter, above the $0.31 U.S. a share that analysts expected.

And there are rumors that the dividend might be reinstated within the next year, a development that could help AAL stock take flight.

In the meantime, the shares look cheap trading at just 18 times future earnings estimates.