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. There are concerns on the financial health of ALK while its profitability can be described as average. ALK has a correct valuation and a medium growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ALK was profitable.
ALK had a positive operating cash flow in the past year.
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

ALK has a Return On Assets (0.49%) which is in line with its industry peers.
ALK's Return On Equity of 2.43% is fine compared to the rest of the industry. ALK outperforms 63.64% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.83%, ALK is in line with its industry, outperforming 50.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ALK is significantly below the industry average of 20.52%.

		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's Profit Margin of 0.70% is in line compared to the rest of the industry. ALK outperforms 59.09% of its industry peers.
In the last couple of years the Profit Margin of ALK has grown nicely.
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.
ALK's Operating Margin has declined in the last couple of years.
ALK has a Gross Margin (55.09%) which is comparable to the rest of the 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%

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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.
ALK has less shares outstanding than it did 1 year ago.
ALK has less shares outstanding than it did 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.
ALK has a Altman-Z score (1.16) which is comparable to the rest of the industry.
ALK has a Debt/Equity ratio of 1.17. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ALK (1.17) is better than 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.
The Current ratio of ALK (0.50) is comparable to the rest of the industry.
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.
With a Quick ratio value of 0.46, ALK perfoms like the industry average, outperforming 45.45% of the companies in the same industry.

		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

ALK shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -48.66%.
Measured over the past years, ALK shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -16.71% on average per year.
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

The Earnings Per Share is expected to grow by 83.82% on average over the next years. This is a very strong growth
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

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 decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 20.41 indicates a rather expensive valuation of ALK.
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.
Compared to an average S&P500 Price/Earnings ratio of 28.32, ALK is valued a bit cheaper.
The Price/Forward Earnings ratio is 9.09, which indicates a very decent valuation of ALK.
ALK's Price/Forward Earnings ratio is rather cheap when compared to the industry. ALK is cheaper than 81.82% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, ALK is valued rather cheaply.

		Industry Rank	Sector Rank
PE	20.41
Fwd PE	9.09

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.
ALK's earnings are expected to grow with 83.82% in the coming years. This may justify a more expensive valuation.