ALASKA AIR GROUP INC (ALK) Stock Fundamental Analysis
NYSE:ALK - New York Stock Exchange, Inc. - US0116591092 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to ALK. 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 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.
Of the past 5 years ALK 4 years were profitable.
ALK had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
ALK's Return On Assets of 1.82% is fine compared to the rest of the industry. ALK outperforms 68.18% of its industry peers.
ALK has a Return On Equity (8.73%) which is in line with its industry peers.
ALK's Return On Invested Capital of 5.21% is in line compared to the rest of the industry. ALK outperforms 54.55% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALK is below the industry average of 8.55%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.82% | ||
| ROE | 8.73% | ||
| ROIC | 5.21% |
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
With a decent Profit Margin value of 2.86%, ALK is doing good in the industry, outperforming 68.18% of the companies in the same industry.
ALK's Profit Margin has declined in the last couple of years.
The Operating Margin of ALK (7.44%) is better than 63.64% of its industry peers.
In the last couple of years the Operating Margin of ALK has declined.
The Gross Margin of ALK (56.65%) is better than 63.64% of its industry peers.
ALK's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.44% | ||
| PM (TTM) | 2.86% | ||
| GM | 56.65% |
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
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.
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
ALK has an Altman-Z score of 1.19. 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 (1.19) which is comparable to the rest of the industry.
The Debt to FCF ratio of ALK is 24.31, which is on the high side as it means it would take ALK, 24.31 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 24.31, ALK perfoms like the industry average, outperforming 54.55% of the companies in the same industry.
ALK has a Debt/Equity ratio of 1.05. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.05, ALK is in line with its industry, outperforming 59.09% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 24.31 | ||
| Altman-Z | 1.19 |
ROIC/WACC0.62
WACC8.39%
2.3 Liquidity
ALK has a Current Ratio of 0.56. 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 (0.56) is comparable to the rest of the industry.
ALK has a Quick Ratio of 0.56. 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 0.52, ALK is not doing good in the industry: 63.64% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.76% over the past year.
The Earnings Per Share has been decreasing by -5.48% on average over the past years.
Looking at the last year, ALK shows a very strong growth in Revenue. The Revenue has grown by 20.82%.
The Revenue has been growing slightly by 5.97% on average over the past years.
EPS 1Y (TTM)18.76%
EPS 3Y-6.46%
EPS 5Y-5.48%
EPS Q2Q%16.3%
Revenue 1Y (TTM)20.82%
Revenue growth 3Y23.86%
Revenue growth 5Y5.97%
Sales Q2Q%40.55%
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 20.04% on average per year.
ALK is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.29% yearly.
EPS Next Y-19.1%
EPS Next 2Y15.31%
EPS Next 3Y20.04%
EPS Next 5YN/A
Revenue Next Year22.11%
Revenue Next 2Y14.26%
Revenue Next 3Y11.29%
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
The Price/Earnings ratio is 10.21, which indicates a very decent valuation of ALK.
81.82% of the companies in the same industry are more expensive than ALK, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.45, ALK is valued rather cheaply.
A Price/Forward Earnings ratio of 7.92 indicates a rather cheap valuation of ALK.
Based on the Price/Forward Earnings ratio, ALK is valued a bit cheaper than 63.64% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. ALK is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.21 | ||
| Fwd PE | 7.92 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ALK is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
ALK's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.98 | ||
| EV/EBITDA | 4.51 |
4.3 Compensation for Growth
ALK's earnings are expected to grow with 20.04% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y15.31%
EPS Next 3Y20.04%
5. Dividend
5.1 Amount
No dividends for ALK!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
51.05
+0.17 (+0.33%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners93.07%
Inst Owner Change0.8%
Ins Owners0.56%
Ins Owner Change10.98%
Market Cap6.20B
Analysts80
Price Target64.37 (26.09%)
Short Float %6.64%
Short Ratio2.52
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)1
Avg EPS beat(2)57.19%
Min EPS beat(2)-1.79%
Max EPS beat(2)116.17%
EPS beat(4)3
Avg EPS beat(4)30.85%
Min EPS beat(4)-1.79%
Max EPS beat(4)116.17%
EPS beat(8)6
Avg EPS beat(8)25.95%
EPS beat(12)8
Avg EPS beat(12)15.97%
EPS beat(16)12
Avg EPS beat(16)15.97%
Revenue beat(2)1
Avg Revenue beat(2)-0.05%
Min Revenue beat(2)-2%
Max Revenue beat(2)1.9%
Revenue beat(4)2
Avg Revenue beat(4)-0.12%
Min Revenue beat(4)-2.29%
Max Revenue beat(4)1.9%
Revenue beat(8)4
Avg Revenue beat(8)-0.41%
Revenue beat(12)5
Avg Revenue beat(12)-0.43%
Revenue beat(16)8
Avg Revenue beat(16)-0.19%
PT rev (1m)-1.09%
PT rev (3m)-26.91%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-39.37%
EPS NY rev (1m)-2.26%
EPS NY rev (3m)-33.45%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-5.46%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-4.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.21 | ||
| Fwd PE | 7.92 | ||
| P/S | 0.49 | ||
| P/FCF | 30.98 | ||
| P/OCF | 3.8 | ||
| P/B | 1.5 | ||
| P/tB | 11.19 | ||
| EV/EBITDA | 4.51 |
EPS(TTM)5
EY9.79%
EPS(NY)6.45
Fwd EY12.63%
FCF(TTM)1.65
FCFY3.23%
OCF(TTM)13.44
OCFY26.32%
SpS104.13
BVpS34.08
TBVpS4.56
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.82% | ||
| ROE | 8.73% | ||
| ROCE | 7.17% | ||
| ROIC | 5.21% | ||
| ROICexc | 6.41% | ||
| ROICexgc | 9.66% | ||
| OM | 7.44% | ||
| PM (TTM) | 2.86% | ||
| GM | 56.65% | ||
| FCFM | 1.58% |
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-Score6
Asset Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 24.31 | ||
| Debt/EBITDA | 2.72 | ||
| Cap/Depr | 219.82% | ||
| Cap/Sales | 11.32% | ||
| Interest Coverage | 5.23 | ||
| Cash Conversion | 102.45% | ||
| Profit Quality | 55.4% | ||
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 1.19 |
F-Score6
WACC8.39%
ROIC/WACC0.62
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)18.76%
EPS 3Y-6.46%
EPS 5Y-5.48%
EPS Q2Q%16.3%
EPS Next Y-19.1%
EPS Next 2Y15.31%
EPS Next 3Y20.04%
EPS Next 5YN/A
Revenue 1Y (TTM)20.82%
Revenue growth 3Y23.86%
Revenue growth 5Y5.97%
Sales Q2Q%40.55%
Revenue Next Year22.11%
Revenue Next 2Y14.26%
Revenue Next 3Y11.29%
Revenue Next 5YN/A
EBIT growth 1Y13.78%
EBIT growth 3YN/A
EBIT growth 5Y-3.7%
EBIT Next Year95.88%
EBIT Next 3Y41.1%
EBIT Next 5YN/A
FCF growth 1Y229.87%
FCF growth 3Y-37.18%
FCF growth 5Y-29.16%
OCF growth 1Y20.55%
OCF growth 3Y12.43%
OCF growth 5Y-3.19%