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. There are concerns on the financial health of ALK while its profitability can be described as average. 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.
In the past year ALK had a positive cash flow from operations.
ALK had positive earnings in 4 of the past 5 years.
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.
With a decent Return On Equity value of 9.03%, ALK is doing good in the industry, outperforming 73.91% of the companies in the same industry.
The Return On Invested Capital of ALK (4.88%) is better than 60.87% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ALK is below the industry average of 9.21%.
| 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
The Profit Margin of ALK (3.37%) is better than 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.
In the last couple of years the Gross Margin of ALK has remained more or less at the same level.
| 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
ALK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ALK has been reduced compared to 1 year ago.
ALK has about the same amout of shares outstanding than it did 5 years ago.
ALK has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.30, 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 1.30, ALK is in the better half of the industry, outperforming 65.22% of the companies in the same industry.
The Debt to FCF ratio of ALK is 27.26, which is on the high side as it means it would take ALK, 27.26 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 27.26, ALK is doing good in the industry, outperforming 65.22% of the companies in the same industry.
A Debt/Equity ratio of 1.04 is on the high side and indicates that ALK has dependencies on debt financing.
ALK has a better Debt to Equity ratio (1.04) than 60.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.04 | ||
| Debt/FCF | 27.26 | ||
| Altman-Z | 1.3 |
ROIC/WACC0.62
WACC7.86%
2.3 Liquidity
A Current Ratio of 0.61 indicates that ALK may have some problems paying its short term obligations.
ALK has a Current ratio (0.61) which is in line with its industry peers.
A Quick Ratio of 0.58 indicates that ALK may have some problems paying its short term obligations.
The Quick ratio of ALK (0.58) is comparable to the rest of the 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.
ALK shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -5.48% yearly.
Looking at the last year, ALK shows a quite strong growth in Revenue. The Revenue has grown by 12.56% in the last year.
ALK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.97% yearly.
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
Based on estimates for the next years, ALK will show a very strong growth in Earnings Per Share. The EPS will grow by 29.26% on average per year.
ALK is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.53% yearly.
EPS Next Y24.74%
EPS Next 2Y27.32%
EPS Next 3Y29.26%
EPS Next 5YN/A
Revenue Next Year23.85%
Revenue Next 2Y15.07%
Revenue Next 3Y11.53%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 14.89, ALK is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of ALK indicates a somewhat cheap valuation: ALK is cheaper than 78.26% of the companies listed in the same industry.
ALK is valuated rather cheaply when we compare the Price/Earnings ratio to 28.28, which is the current average of the S&P500 Index.
ALK is valuated reasonably with a Price/Forward Earnings ratio of 11.93.
ALK's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ALK is cheaper than 69.57% of the companies in the same industry.
ALK's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 91.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.89 | ||
| Fwd PE | 11.93 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, ALK is valued a bit cheaper than 65.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 50.08 | ||
| 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 29.26% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.6
PEG (5Y)N/A
EPS Next 2Y27.32%
EPS Next 3Y29.26%
5. Dividend
5.1 Amount
ALK does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ALASKA AIR GROUP INC
NYSE:ALK (1/29/2025, 8:04:00 PM)
After market: 72.3999 +0.2 (+0.28%)72.2
+0.79 (+1.11%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners90.43%
Inst Owner Change0.5%
Ins Owners0.45%
Ins Owner Change-5.78%
Market Cap9.17B
Analysts80.95
Price Target87.97 (21.84%)
Short Float %5.2%
Short Ratio2.47
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)20.87%
PT rev (3m)34.41%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-547.22%
EPS NY rev (1m)0%
EPS NY rev (3m)2.22%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)23.58%
Revenue NY rev (1m)1.64%
Revenue NY rev (3m)27.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.89 | ||
| Fwd PE | 11.93 | ||
| P/S | 0.78 | ||
| P/FCF | 50.08 | ||
| P/OCF | 6.26 | ||
| P/B | 2.1 | ||
| P/tB | 11.78 | ||
| EV/EBITDA | N/A |
EPS(TTM)4.85
EY6.72%
EPS(NY)6.05
Fwd EY8.38%
FCF(TTM)1.44
FCFY2%
OCF(TTM)11.53
OCFY15.97%
SpS92.45
BVpS34.44
TBVpS6.13
PEG (NY)0.6
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 | 1.3 |
F-Score6
WACC7.86%
ROIC/WACC0.62
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 Y24.74%
EPS Next 2Y27.32%
EPS Next 3Y29.26%
EPS Next 5YN/A
Revenue 1Y (TTM)12.56%
Revenue growth 3Y23.86%
Revenue growth 5Y5.97%
Sales Q2Q%41.87%
Revenue Next Year23.85%
Revenue Next 2Y15.07%
Revenue Next 3Y11.53%
Revenue Next 5YN/A
EBIT growth 1Y9.32%
EBIT growth 3YN/A
EBIT growth 5Y-3.7%
EBIT Next Year134.54%
EBIT Next 3YN/A
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%