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. 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.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ALK had positive earnings in the past year.
In the past year ALK had a positive cash flow from operations.
In the past 5 years ALK has always been profitable.
ALK had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 0.49%, ALK is in line with its industry, outperforming 59.09% of the companies in the same industry.
Looking at the Return On Equity, with a value of 2.43%, ALK is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
ALK has a Return On Invested Capital (2.83%) which is in line with 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

Looking at the Profit Margin, with a value of 0.70%, ALK is in line with its industry, outperforming 59.09% of the companies in the same industry.
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.
ALK has a Gross Margin of 55.09%. This is comparable to the rest of the industry: ALK outperforms 54.55% of its industry peers.
ALK's Gross Margin has improved in the last couple of years.

		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

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ALK is destroying value.
Compared to 1 year ago, ALK has less shares outstanding
The number of shares outstanding for ALK has been reduced compared to 5 years ago.
Compared to 1 year ago, ALK has a worse debt to assets ratio.

2.2 Solvency

ALK has an Altman-Z score of 1.15. This is a bad value and indicates that ALK is not financially healthy and even has some risk of bankruptcy.
ALK has a Altman-Z score of 1.15. This is comparable to the rest of the industry: ALK outperforms 59.09% of its industry peers.
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	1.15

ROIC/WACC0.33

WACC8.64%

2.3 Liquidity

A Current Ratio of 0.50 indicates that ALK may have some problems paying its short term obligations.
ALK has a Current ratio (0.50) which is in line with its industry peers.
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 of 0.46. This is comparable to the rest of the industry: ALK outperforms 45.45% of its industry peers.

		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

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.
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 20.80, which indicates a rather expensive current valuation of ALK.
Based on the Price/Earnings ratio, ALK is valued a bit cheaper than 68.18% of the companies in the same industry.
When comparing the Price/Earnings ratio of ALK to the average of the S&P500 Index (28.87), we can say ALK is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 9.26, the valuation of ALK can be described as reasonable.
81.82% of the companies in the same industry are more expensive than ALK, based on the Price/Forward Earnings ratio.
ALK is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.96, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	20.8
Fwd PE	9.26

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.