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 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 correct valuation and a medium 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 1.82%, ALK is in the better half of the industry, outperforming 69.57% of the companies in the same industry.
With a decent Return On Equity value of 8.73%, ALK is doing good in the industry, outperforming 60.87% of the companies in the same industry.
ALK's Return On Invested Capital of 5.21% is in line compared to the rest of the industry. ALK outperforms 52.17% of its industry peers.
ALK had an Average Return On Invested Capital over the past 3 years of 5.24%. This is significantly below the industry average of 10.41%.
| 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
ALK has a Profit Margin of 2.86%. This is in the better half of the industry: ALK outperforms 69.57% of its industry peers.
ALK's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 7.44%, ALK is doing good in the industry, outperforming 60.87% of the companies in the same industry.
ALK's Operating Margin has declined in the last couple of years.
ALK has a better Gross Margin (56.65%) than 65.22% 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 | 7.44% | ||
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ALK 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
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.
With a decent Altman-Z score value of 1.19, ALK is doing good in the industry, outperforming 60.87% of the companies in the same industry.
ALK has a debt to FCF ratio of 24.31. This is a negative value and a sign of low solvency as ALK would need 24.31 years to pay back of all of its debts.
ALK has a Debt to FCF ratio of 24.31. This is comparable to the rest of the industry: ALK outperforms 56.52% of its industry peers.
ALK has a Debt/Equity ratio of 1.05. This is a high value indicating a heavy dependency on external financing.
ALK has a Debt to Equity ratio of 1.05. This is in the better half of the industry: ALK outperforms 60.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 24.31 | ||
| Altman-Z | 1.19 |
ROIC/WACC0.63
WACC8.31%
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.
ALK's Current ratio of 0.56 is on the low side compared to the rest of the industry. ALK is outperformed by 60.87% of its industry peers.
A Quick Ratio of 0.52 indicates that ALK may have some problems paying its short term obligations.
With a Quick ratio value of 0.52, ALK is not doing good in the industry: 60.87% 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.
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 very strong growth in Revenue. The Revenue has grown by 20.82%.
ALK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.97% yearly.
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
The Earnings Per Share is expected to grow by 20.04% on average over the next years. This is a very strong growth
Based on estimates for the next years, ALK will show a quite strong growth in Revenue. The Revenue will grow by 11.29% on average per year.
EPS Next Y-17.22%
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 10.41, which indicates a very decent valuation of ALK.
Based on the Price/Earnings ratio, ALK is valued cheaper than 82.61% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.20. ALK is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 8.07, the valuation of ALK can be described as reasonable.
Based on the Price/Forward Earnings ratio, ALK is valued a bit cheaper than the industry average as 60.87% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 22.13. ALK is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.41 | ||
| Fwd PE | 8.07 |
4.2 Price Multiples
ALK's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ALK is cheaper than 69.57% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as ALK.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.58 | ||
| EV/EBITDA | 4.55 |
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
ALK does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
52.03
+0.41 (+0.79%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners91.57%
Inst Owner Change0.74%
Ins Owners0.49%
Ins Owner Change5.61%
Market Cap6.32B
Analysts80
Price Target65.07 (25.06%)
Short Float %5.88%
Short Ratio1.73
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)-7.89%
PT rev (3m)-26.69%
EPS NQ rev (1m)-33.74%
EPS NQ rev (3m)-42.44%
EPS NY rev (1m)-23.45%
EPS NY rev (3m)-34.63%
Revenue NQ rev (1m)-3.53%
Revenue NQ rev (3m)-6.37%
Revenue NY rev (1m)-2.26%
Revenue NY rev (3m)-3.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.41 | ||
| Fwd PE | 8.07 | ||
| P/S | 0.5 | ||
| P/FCF | 31.58 | ||
| P/OCF | 3.87 | ||
| P/B | 1.53 | ||
| P/tB | 11.4 | ||
| EV/EBITDA | 4.55 |
EPS(TTM)5
EY9.61%
EPS(NY)6.45
Fwd EY12.4%
FCF(TTM)1.65
FCFY3.17%
OCF(TTM)13.44
OCFY25.82%
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
WACC8.31%
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)18.76%
EPS 3Y-6.46%
EPS 5Y-5.48%
EPS Q2Q%16.3%
EPS Next Y-17.22%
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%