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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year ALK was profitable.
ALK had a positive operating cash flow in the past year.
ALK had positive earnings in 4 of the past 5 years.
Of the past 5 years ALK 4 years had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 1.82%, ALK is doing good in the industry, outperforming 68.18% of the companies in the same industry.
The Return On Equity of ALK (8.73%) is comparable to the rest of the industry.
ALK has a Return On Invested Capital (5.21%) which is in line with 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
Looking at the Profit Margin, with a value of 2.86%, ALK is in the better half of the industry, outperforming 68.18% of the companies in the same industry.
In the last couple of years the Profit Margin of ALK has declined.
With a decent Operating Margin value of 7.44%, ALK is doing good in the industry, outperforming 63.64% of the companies in the same industry.
ALK's Operating Margin has declined in the last couple of years.
ALK has a Gross Margin of 56.65%. This is in the better half of the industry: ALK outperforms 63.64% 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.
Compared to 5 years ago, ALK has about the same amount of shares outstanding.
ALK has a worse debt/assets ratio than last year.
2.2 Solvency
ALK has an Altman-Z score of 1.17. 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 (1.17) 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.
ALK's Debt to FCF ratio of 24.31 is in line compared to the rest of the industry. ALK outperforms 54.55% of its industry peers.
A Debt/Equity ratio of 1.05 is on the high side and indicates that ALK has dependencies on debt financing.
ALK has a Debt to Equity ratio of 1.05. This is comparable to the rest of the industry: ALK outperforms 59.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 24.31 | ||
| Altman-Z | 1.17 |
ROIC/WACC0.63
WACC8.26%
2.3 Liquidity
A Current Ratio of 0.56 indicates that ALK may have some problems paying its short term obligations.
ALK's Current ratio of 0.56 is in line compared to the rest of the industry. ALK outperforms 40.91% of its industry peers.
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.
Looking at the Quick ratio, with a value of 0.52, ALK is doing worse than 63.64% of the companies in the same industry.
| 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.
Measured over the past years, ALK shows a decrease in Earnings Per Share. The EPS has been decreasing by -5.48% on average per year.
Looking at the last year, ALK shows a very strong growth in Revenue. The Revenue has grown by 20.82%.
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)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
ALK is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.04% yearly.
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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ALK is valuated reasonably with a Price/Earnings ratio of 9.37.
81.82% of the companies in the same industry are more expensive than ALK, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ALK to the average of the S&P500 Index (26.34), we can say ALK is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.27, the valuation of ALK can be described as very cheap.
ALK's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of ALK to the average of the S&P500 Index (22.19), we can say ALK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.37 | ||
| Fwd PE | 7.27 |
4.2 Price Multiples
ALK's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ALK is cheaper than 77.27% of the companies in the same industry.
ALK's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.45 | ||
| EV/EBITDA | 4.19 |
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 |
46.87
+0.17 (+0.36%)
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 Change10.2%
Market Cap5.69B
Analysts80
Price Target65.93 (40.67%)
Short Float %5.04%
Short Ratio1.77
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)1.33%
PT rev (3m)-25.85%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-41.4%
EPS NY rev (1m)0%
EPS NY rev (3m)-34.63%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-6.13%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-4.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.37 | ||
| Fwd PE | 7.27 | ||
| P/S | 0.45 | ||
| P/FCF | 28.45 | ||
| P/OCF | 3.49 | ||
| P/B | 1.38 | ||
| P/tB | 10.27 | ||
| EV/EBITDA | 4.19 |
EPS(TTM)5
EY10.67%
EPS(NY)6.45
Fwd EY13.76%
FCF(TTM)1.65
FCFY3.52%
OCF(TTM)13.44
OCFY28.67%
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 | 1.17 |
F-Score6
WACC8.26%
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%