Alaska Air Group, Inc.
Alaska Air Group, Inc. Fundamental Analysis
Alaska Air Group, Inc. (ALK) shows weak financial fundamentals with a PE ratio of 60.83, profit margin of 0.70%, and ROE of 2.47%. The company generates $14.1B in annual revenue with strong year-over-year growth of 12.56%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 16.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ALK's fundamental strength across five key dimensions:
Efficiency Score
WeakALK struggles to generate sufficient returns from assets.
Valuation Score
ModerateALK shows balanced valuation metrics.
Growth Score
ExcellentALK delivers strong and consistent growth momentum.
Financial Health Score
WeakALK carries high financial risk with limited liquidity.
Profitability Score
WeakALK struggles to sustain strong margins.
Key Financial Metrics
Is ALK Expensive or Cheap?
P/E Ratio
ALK trades at 60.83 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ALK's PEG of -2.06 indicates potential undervaluation.
Price to Book
The market values Alaska Air Group, Inc. at 1.48 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -0.18 times EBITDA. This is generally considered low.
How Well Does ALK Make Money?
Net Profit Margin
For every $100 in sales, Alaska Air Group, Inc. keeps $0.70 as profit after all expenses.
Operating Margin
Core operations generate 2.13 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $2.47 in profit for every $100 of shareholder equity.
ROA
Alaska Air Group, Inc. generates $0.49 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Alaska Air Group, Inc. generates limited operating cash flow of $1.24B, signaling weaker underlying cash strength.
Free Cash Flow
Alaska Air Group, Inc. generates weak or negative free cash flow of $-336.38M, restricting financial flexibility.
FCF Per Share
Each share generates $-2.93 in free cash annually.
FCF Yield
ALK converts -5.62% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
60.83
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.06
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.48
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.42
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.67
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.50
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.02
vs 25 benchmark
ROA
Return on assets percentage
0.005
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How ALK Stacks Against Its Sector Peers
| Metric | ALK Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 60.83 | 26.76 | Worse (Expensive) |
| ROE | 2.47% | 1300.00% | Weak |
| Net Margin | 0.70% | -29570.00% (disorted) | Weak |
| Debt/Equity | 1.67 | 0.79 | Weak (High Leverage) |
| Current Ratio | 0.50 | 10.68 | Weak Liquidity |
| ROA | 0.49% | -1545134.00% (disorted) | Weak |
ALK outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Alaska Air Group, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
30.61%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
-49.80%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
-16.91%
Industry Style: Cyclical, Value, Infrastructure
Declining