ALASKA AIR GROUP INC (ALK) Stock Fundamental Analysis
NYSE:ALK - New York Stock Exchange, Inc. - US0116591092 - Common Stock - Currency: USD
Taking everything into account, ALK scores 4 out of 10 in our fundamental rating. ALK was compared to 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 is not valued too expensively and it also shows a decent growth rate.
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
Looking at the Return On Assets, with a value of 2.00%, ALK is in the better half of the industry, outperforming 65.22% of the companies in the same industry.
ALK has a better Return On Equity (9.03%) than 60.87% of its industry peers.
ALK has a Return On Invested Capital of 4.88%. This is comparable to the rest of the industry: ALK outperforms 56.52% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ALK is significantly below the industry average of 11.12%.
| 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 has a better Profit Margin (3.37%) than 65.22% of its industry peers.
In the last couple of years the Profit Margin of ALK has declined.
The Operating Margin of ALK (7.80%) is better than 60.87% of its industry peers.
In the last couple of years the Operating Margin of ALK has declined.
ALK's Gross Margin of 56.64% is fine compared to the rest of the industry. ALK outperforms 60.87% of its industry peers.
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 3Y3.86%
GM growth 5Y0.81%
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 remains at a similar level 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 1.17, we must say that ALK is in the distress zone and has some risk of bankruptcy.
ALK has a Altman-Z score of 1.17. This is in the better half of the industry: ALK outperforms 65.22% of its industry peers.
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.
ALK has a Debt/Equity ratio of 1.04. This is a high value indicating a heavy dependency on external 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 | 1.17 |
ROIC/WACC0.63
WACC7.72%
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 has a Current ratio (0.61) which is in line with 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.
ALK has a Quick ratio (0.58) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
ALK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.54%.
The Earnings Per Share has been decreasing by -5.48% on average over the past years.
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 22.90% yearly.
ALK is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.86% yearly.
EPS Next Y8.13%
EPS Next 2Y22.6%
EPS Next 3Y22.9%
EPS Next 5YN/A
Revenue Next Year25.43%
Revenue Next 2Y15.28%
Revenue Next 3Y11.86%
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 9.32, the valuation of ALK can be described as very reasonable.
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 (28.29), we can say ALK is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 8.61, the valuation of ALK can be described as reasonable.
Based on the Price/Forward Earnings ratio, ALK is valued a bit cheaper than 60.87% 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 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.32 | ||
| Fwd PE | 8.61 |
4.2 Price Multiples
ALK's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ALK is cheaper than 73.91% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALK is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.31 | ||
| EV/EBITDA | 4.53 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ALK's earnings are expected to grow with 22.90% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.15
PEG (5Y)N/A
EPS Next 2Y22.6%
EPS Next 3Y22.9%
5. Dividend
5.1 Amount
No dividends for ALK!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
45.18
+0.53 (+1.19%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners91.57%
Inst Owner Change0.43%
Ins Owners0.49%
Ins Owner Change4.64%
Market Cap5.55B
Analysts81.9
Price Target86.96 (92.47%)
Short Float %5.24%
Short Ratio2.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
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)-2.21%
PT rev (3m)16.25%
EPS NQ rev (1m)-27.21%
EPS NQ rev (3m)-10.16%
EPS NY rev (1m)-14.61%
EPS NY rev (3m)-9.04%
Revenue NQ rev (1m)-1.14%
Revenue NQ rev (3m)1.3%
Revenue NY rev (1m)-1.41%
Revenue NY rev (3m)1.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.32 | ||
| Fwd PE | 8.61 | ||
| P/S | 0.47 | ||
| P/FCF | 30.31 | ||
| P/OCF | 3.79 | ||
| P/B | 1.27 | ||
| P/tB | 7.16 | ||
| EV/EBITDA | 4.53 |
EPS(TTM)4.85
EY10.73%
EPS(NY)5.24
Fwd EY11.61%
FCF(TTM)1.49
FCFY3.3%
OCF(TTM)11.93
OCFY26.4%
SpS95.6
BVpS35.62
TBVpS6.31
PEG (NY)1.15
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-7.41%
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 3Y3.86%
GM growth 5Y0.81%
F-Score7
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.04 | ||
| Debt/FCF | 27.26 | ||
| Debt/EBITDA | 3.03 | ||
| Cap/Depr | 219.73% | ||
| Cap/Sales | 10.92% | ||
| Interest Coverage | 6.18 | ||
| Cash Conversion | 97.73% | ||
| Profit Quality | 46.33% | ||
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 1.17 |
F-Score7
WACC7.72%
ROIC/WACC0.63
Cap/Depr(3y)317.88%
Cap/Depr(5y)215.36%
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 Y8.13%
EPS Next 2Y22.6%
EPS Next 3Y22.9%
EPS Next 5YN/A
Revenue 1Y (TTM)12.56%
Revenue growth 3Y23.86%
Revenue growth 5Y5.97%
Sales Q2Q%41.87%
Revenue Next Year25.43%
Revenue Next 2Y15.28%
Revenue Next 3Y11.86%
Revenue Next 5YN/A
EBIT growth 1Y9.32%
EBIT growth 3YN/A
EBIT growth 5Y-3.7%
EBIT Next Year139.07%
EBIT Next 3Y46.94%
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%