We assign a fundamental rating of 4 out of 10 to ALK. ALK was compared to 22 industry peers in the Passenger Airlines industry. ALK has a medium profitability rating, but doesn't score so well on its financial health evaluation. ALK has a correct valuation and a medium growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ALK was profitable.
In the past year ALK had a positive cash flow from operations.
ALK had positive earnings in each of the past 5 years.
In the past 5 years ALK always reported a positive cash flow from operatings.

1.2 Ratios

ALK's Return On Assets of 0.49% is in line compared to the rest of the industry. ALK outperforms 59.09% of its industry peers.
ALK has a Return On Equity of 2.43%. This is in the better half of the industry: ALK outperforms 63.64% of its industry peers.
ALK has a Return On Invested Capital (2.83%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for ALK is significantly below the industry average of 20.52%.

		Industry Rank	Sector Rank
ROA	0.49%
ROE	2.43%
ROIC	2.83%

ROA(3y)1.37%

ROA(5y)1.59%

ROE(3y)5.73%

ROE(5y)6.25%

ROIC(3y)4.46%

ROIC(5y)N/A

1.3 Margins

ALK has a Profit Margin (0.70%) which is in line with its industry peers.
ALK's Profit Margin has improved in the last couple of years.
ALK's Operating Margin of 3.88% is in line compared to the rest of the industry. ALK outperforms 54.55% of its industry peers.
ALK's Operating Margin has declined in the last couple of years.
The Gross Margin of ALK (55.09%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of ALK has grown nicely.

		Industry Rank	Sector Rank
OM	3.88%
PM (TTM)	0.7%
GM	55.09%

OM growth 3Y-16.78%

OM growth 5YN/A

PM growth 3Y5.31%

PM growth 5YN/A

GM growth 3Y2%

GM growth 5Y6.62%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

ALK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, ALK has less shares outstanding
ALK has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ALK has a worse debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 1.16, we must say that ALK is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.16, ALK is in line with its industry, outperforming 59.09% of the companies in the same industry.
A Debt/Equity ratio of 1.17 is on the high side and indicates that ALK has dependencies on debt financing.
ALK has a Debt to Equity ratio of 1.17. This is in the better half of the industry: ALK outperforms 63.64% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.17
Debt/FCF	N/A
Altman-Z	1.16

ROIC/WACC0.33

WACC8.65%

2.3 Liquidity

ALK has a Current Ratio of 0.50. This is a bad value and indicates that ALK is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.50, ALK perfoms like the industry average, outperforming 40.91% of the companies in the same industry.
ALK has a Quick Ratio of 0.50. This is a bad value and indicates that ALK is not financially healthy enough and could expect problems in meeting its short term obligations.
ALK has a Quick ratio (0.46) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	0.5
Quick Ratio	0.46

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ALK shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -48.66%.
The earnings per share for ALK have been decreasing by -16.71% on average. This is quite bad
ALK shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.34%.
Measured over the past years, ALK shows a very strong growth in Revenue. The Revenue has been growing by 31.90% on average per year.

EPS 1Y (TTM)-48.66%

EPS 3Y-16.71%

EPS 5YN/A

EPS Q2Q%-55.67%

Revenue 1Y (TTM)21.34%

Revenue growth 3Y13.86%

Revenue growth 5Y31.9%

Sales Q2Q%2.77%

3.2 Future

ALK is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 83.82% yearly.
ALK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.03% yearly.

EPS Next Y124.58%

EPS Next 2Y83.82%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year7.61%

Revenue Next 2Y6.68%

Revenue Next 3Y6.03%

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 21.41, which indicates a rather expensive current valuation of ALK.
Based on the Price/Earnings ratio, ALK is valued a bit cheaper than 72.73% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.39. ALK is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 9.53, the valuation of ALK can be described as very reasonable.
ALK's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ALK is cheaper than 77.27% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.72. ALK is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	21.41
Fwd PE	9.53

4.2 Price Multiples

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	N/A

4.3 Compensation for Growth

ALK's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as ALK's earnings are expected to grow with 83.82% in the coming years.