ALASKA AIR GROUP INC (ALK) Stock Fundamental Analysis
NYSE:ALK - New York Stock Exchange, Inc. - US0116591092 - Common Stock - Currency: USD
Overall ALK gets a fundamental rating of 4 out of 10. We evaluated ALK against 23 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 decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
ALK had positive earnings in the past year.
ALK had a positive operating cash flow in the past year.
Of the past 5 years ALK 4 years were profitable.
Of the past 5 years ALK 4 years had a positive operating cash flow.
1.2 Ratios
ALK has a Return On Assets of 2.00%. This is in the better half of the industry: ALK outperforms 65.22% of its industry peers.
ALK's Return On Equity of 9.03% is fine compared to the rest of the industry. ALK outperforms 60.87% of its industry peers.
With a Return On Invested Capital value of 4.88%, ALK perfoms like the industry average, outperforming 56.52% of the companies in the same industry.
ALK had an Average Return On Invested Capital over the past 3 years of 5.24%. This is below the industry average of 8.88%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2% | ||
| ROE | 9.03% | ||
| ROIC | 4.88% |
ROA(3y)1.34%
ROA(5y)-0.4%
ROE(3y)5.42%
ROE(5y)-3.09%
ROIC(3y)5.24%
ROIC(5y)N/A
1.3 Margins
ALK's Profit Margin of 3.37% is fine compared to the rest of the industry. ALK outperforms 65.22% of its industry peers.
In the last couple of years the Profit Margin of ALK has declined.
With a decent Operating Margin value of 7.80%, ALK is doing good in the industry, outperforming 60.87% of the companies in the same industry.
In the last couple of years the Operating Margin of ALK has declined.
The Gross Margin of ALK (56.64%) is comparable to the rest of the industry.
ALK's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.8% | ||
| PM (TTM) | 3.37% | ||
| GM | 56.64% |
OM growth 3YN/A
OM growth 5Y-9.13%
PM growth 3Y-24.24%
PM growth 5Y-17.41%
GM growth 3Y2.76%
GM growth 5Y0.16%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALK is destroying value.
ALK has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ALK remains at a similar level compared to 5 years ago.
ALK has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.29, we must say that ALK is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of ALK (1.29) is better than 65.22% of its industry peers.
ALK has a debt to FCF ratio of 27.26. This is a negative value and a sign of low solvency as ALK would need 27.26 years to pay back of all of its debts.
The Debt to FCF ratio of ALK (27.26) is better than 73.91% of its industry peers.
A Debt/Equity ratio of 1.04 is on the high side and indicates that ALK has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.04, ALK is in the better half of the industry, outperforming 60.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.04 | ||
| Debt/FCF | 27.26 | ||
| Altman-Z | 1.29 |
ROIC/WACC0.56
WACC8.76%
2.3 Liquidity
ALK has a Current Ratio of 0.61. 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's Current ratio of 0.61 is in line compared to the rest of the industry. ALK outperforms 43.48% of its industry peers.
ALK has a Quick Ratio of 0.61. 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 Quick ratio, with a value of 0.58, ALK is in line with its industry, outperforming 43.48% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.54% over the past year.
Measured over the past years, ALK shows a decrease in Earnings Per Share. The EPS has been decreasing by -5.48% on average per year.
ALK shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.56%.
Measured over the past years, ALK shows a small growth in Revenue. The Revenue has been growing by 5.97% on average per year.
EPS 1Y (TTM)7.54%
EPS 3Y-6.46%
EPS 5Y-5.48%
EPS Q2Q%223.33%
Revenue 1Y (TTM)12.56%
Revenue growth 3Y23.86%
Revenue growth 5Y5.97%
Sales Q2Q%41.87%
3.2 Future
ALK is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 28.07% yearly.
The Revenue is expected to grow by 12.44% on average over the next years. This is quite good.
EPS Next Y26.64%
EPS Next 2Y28.01%
EPS Next 3Y28.07%
EPS Next 5YN/A
Revenue Next Year27.17%
Revenue Next 2Y15.98%
Revenue Next 3Y12.44%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 13.46, ALK is valued correctly.
ALK's Price/Earnings ratio is a bit cheaper when compared to the industry. ALK is cheaper than 73.91% of the companies in the same industry.
When comparing the Price/Earnings ratio of ALK to the average of the S&P500 Index (29.75), we can say ALK is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.63, the valuation of ALK can be described as very reasonable.
ALK's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.44, ALK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.46 | ||
| Fwd PE | 10.63 |
4.2 Price Multiples
73.91% of the companies in the same industry are more expensive than ALK, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.93 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ALK's earnings are expected to grow with 28.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.51
PEG (5Y)N/A
EPS Next 2Y28.01%
EPS Next 3Y28.07%
5. Dividend
5.1 Amount
ALK does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
65.3
-4.6 (-6.58%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners91.57%
Inst Owner Change1.81%
Ins Owners0.49%
Ins Owner Change4.59%
Market Cap8.04B
Analysts81.9
Price Target88.76 (35.93%)
Short Float %5.06%
Short Ratio2.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)59.45%
Min EPS beat(2)2.73%
Max EPS beat(2)116.17%
EPS beat(4)4
Avg EPS beat(4)34.54%
Min EPS beat(4)2.73%
Max EPS beat(4)116.17%
EPS beat(8)6
Avg EPS beat(8)22.65%
EPS beat(12)9
Avg EPS beat(12)17.16%
EPS beat(16)13
Avg EPS beat(16)16.35%
Revenue beat(2)2
Avg Revenue beat(2)1.9%
Min Revenue beat(2)1.89%
Max Revenue beat(2)1.9%
Revenue beat(4)3
Avg Revenue beat(4)0.6%
Min Revenue beat(4)-2.29%
Max Revenue beat(4)1.9%
Revenue beat(8)4
Avg Revenue beat(8)-0.27%
Revenue beat(12)6
Avg Revenue beat(12)-0.25%
Revenue beat(16)9
Avg Revenue beat(16)-0.04%
PT rev (1m)0.91%
PT rev (3m)46.51%
EPS NQ rev (1m)5.33%
EPS NQ rev (3m)14.67%
EPS NY rev (1m)1.52%
EPS NY rev (3m)11.64%
Revenue NQ rev (1m)0.5%
Revenue NQ rev (3m)2.59%
Revenue NY rev (1m)2.68%
Revenue NY rev (3m)3.97%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.46 | ||
| Fwd PE | 10.63 | ||
| P/S | 0.69 | ||
| P/FCF | 43.93 | ||
| P/OCF | 5.49 | ||
| P/B | 1.84 | ||
| P/tB | 10.33 | ||
| EV/EBITDA | N/A |
EPS(TTM)4.85
EY7.43%
EPS(NY)6.14
Fwd EY9.41%
FCF(TTM)1.49
FCFY2.28%
OCF(TTM)11.89
OCFY18.21%
SpS95.31
BVpS35.51
TBVpS6.32
PEG (NY)0.51
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2% | ||
| ROE | 9.03% | ||
| ROCE | 6.72% | ||
| ROIC | 4.88% | ||
| ROICexc | 5.96% | ||
| ROICexgc | 8.8% | ||
| OM | 7.8% | ||
| PM (TTM) | 3.37% | ||
| GM | 56.64% | ||
| FCFM | 1.56% |
ROA(3y)1.34%
ROA(5y)-0.4%
ROE(3y)5.42%
ROE(5y)-3.09%
ROIC(3y)5.24%
ROIC(5y)N/A
ROICexc(3y)6.57%
ROICexc(5y)N/A
ROICexgc(3y)9.14%
ROICexgc(5y)N/A
ROCE(3y)7.22%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y-7.42%
ROICexc growth 3YN/A
ROICexc growth 5Y-9.28%
OM growth 3YN/A
OM growth 5Y-9.13%
PM growth 3Y-24.24%
PM growth 5Y-17.41%
GM growth 3Y2.76%
GM growth 5Y0.16%
F-Score6
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.04 | ||
| Debt/FCF | 27.26 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | 10.92% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | N/A | ||
| Profit Quality | 46.33% | ||
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 1.29 |
F-Score6
WACC8.76%
ROIC/WACC0.56
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)14.19%
Cap/Sales(5y)10.61%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)7.54%
EPS 3Y-6.46%
EPS 5Y-5.48%
EPS Q2Q%223.33%
EPS Next Y26.64%
EPS Next 2Y28.01%
EPS Next 3Y28.07%
EPS Next 5YN/A
Revenue 1Y (TTM)12.56%
Revenue growth 3Y23.86%
Revenue growth 5Y5.97%
Sales Q2Q%41.87%
Revenue Next Year27.17%
Revenue Next 2Y15.98%
Revenue Next 3Y12.44%
Revenue Next 5YN/A
EBIT growth 1Y9.32%
EBIT growth 3YN/A
EBIT growth 5Y-3.7%
EBIT Next Year142.25%
EBIT Next 3Y47.56%
EBIT Next 5YN/A
FCF growth 1Y141.22%
FCF growth 3Y-37.18%
FCF growth 5Y-29.16%
OCF growth 1Y39.43%
OCF growth 3Y12.43%
OCF growth 5Y-3.19%