ALASKA AIR GROUP INC (ALK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ALK - US0116591092 - Common Stock
52.34 USD
+0.54 (+1.04%)
Taking everything into account, ALK scores 4 out of 10 in our fundamental rating. ALK was compared to 22 industry peers in the Passenger Airlines industry. While ALK is still in line with the averages on profitability rating, there are concerns on its financial health. ALK has a decent growth rate and is not valued too expensively.
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.
- Each year in the past 5 years ALK has been profitable.
- ALK had a positive operating cash flow in each of the past 5 years.
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 better Return On Equity (2.43%) than 63.64% of its industry peers.
- ALK's Return On Invested Capital of 2.83% is in line compared to the rest of the industry. ALK outperforms 50.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for ALK is significantly below the industry average of 20.53%.
| 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 comparable to the rest of the industry.
- ALK's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 3.88%, ALK is in line with its industry, outperforming 54.55% of the companies in the same industry.
- In the last couple of years the Operating Margin of ALK has declined.
- With a Gross Margin value of 55.09%, ALK perfoms like the industry average, outperforming 54.55% of the companies in the same 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%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ALK is destroying value.
- The number of shares outstanding for ALK has been reduced compared to 1 year ago.
- The number of shares outstanding for ALK has been reduced compared to 5 years ago.
- The debt/assets ratio for ALK is higher compared to a year ago.
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.
- The Altman-Z score of ALK (1.16) is comparable to the rest of the 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
WACC8.62%
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.
- Looking at the Current ratio, with a value of 0.50, ALK is in line with its industry, outperforming 40.91% of the companies in the same industry.
- A Quick Ratio of 0.46 indicates that ALK may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.46, ALK is in line with its industry, outperforming 45.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.46 |
3. Growth
3.1 Past
- The earnings per share for ALK have decreased strongly by -48.66% in the last year.
- ALK shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -16.71% yearly.
- Looking at the last year, ALK shows a very strong growth in Revenue. The Revenue has grown by 21.34%.
- ALK shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 31.90% yearly.
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
- Based on estimates for the next years, ALK will show a very strong growth in Earnings Per Share. The EPS will grow by 83.82% on average per year.
- The Revenue is expected to grow by 6.03% on average over the next years.
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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- ALK is valuated rather expensively with a Price/Earnings ratio of 21.02.
- ALK's Price/Earnings ratio is a bit cheaper when compared to the industry. ALK is cheaper than 72.73% of the companies in the same industry.
- ALK's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.82.
- With a Price/Forward Earnings ratio of 9.36, the valuation of ALK can be described as very reasonable.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ALK indicates a somewhat cheap valuation: ALK is cheaper than 77.27% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of ALK to the average of the S&P500 Index (25.95), we can say ALK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.02 | ||
| Fwd PE | 9.36 |
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.
PEG (NY)0.17
PEG (5Y)N/A
EPS Next 2Y83.82%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- No dividends for ALK!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ALASKA AIR GROUP INC / ALK FAQ
What is the ChartMill fundamental rating of ALASKA AIR GROUP INC (ALK) stock?
ChartMill assigns a fundamental rating of 4 / 10 to ALK.
Can you provide the valuation status for ALASKA AIR GROUP INC?
ChartMill assigns a valuation rating of 5 / 10 to ALASKA AIR GROUP INC (ALK). This can be considered as Fairly Valued.
How profitable is ALASKA AIR GROUP INC (ALK) stock?
ALASKA AIR GROUP INC (ALK) has a profitability rating of 5 / 10.
What are the PE and PB ratios of ALASKA AIR GROUP INC (ALK) stock?
The Price/Earnings (PE) ratio for ALASKA AIR GROUP INC (ALK) is 21.02 and the Price/Book (PB) ratio is 1.47.
Is the dividend of ALASKA AIR GROUP INC sustainable?
The dividend rating of ALASKA AIR GROUP INC (ALK) is 0 / 10 and the dividend payout ratio is 0%.