Alaska Air (ALK) AI Stock Analysis

• Market Cap: $5.96B
• Dividend Yield: N/A
• Average Volume (3M): 3.35M
• Price to Earnings (P/E): 41.2
• Beta (1Y): 0.64
• Revenue Growth: 31.50%
• EPS Growth: -49.15%
• Country: US
• Employees: 29,773
• Sector: Industrials
• Sector Strength: 72
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 1.05
• Shares Outstanding: 115,988,610
• 10 Day Avg. Volume: 3,083,043
• 30 Day Avg. Volume: 3,351,974
• PEG Ratio: 0.29
• Price to Book (P/B): 1.87
• Price to Sales (P/S): 0.70
• P/FCF Ratio: 44.63
• Enterprise Value/Market Cap: 1.68
• Enterprise Value/Revenue: 0.71
• Enterprise Value/Gross Profit: 1.72
• Enterprise Value/Ebitda: 7.73
• 1Y Price Target: $68.80
• Price Target Upside: 33.90% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: $50.00 ▼(-2.69% Downside)

Alaska Air's overall stock score reflects a challenging environment with high leverage and cash flow issues, compounded by technical indicators suggesting overbought conditions. The high P/E ratio indicates potential overvaluation, and recent corporate events have introduced additional risks. Despite these challenges, the company is on a recovery path with strategic initiatives that could improve long-term prospects.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a recovery trajectory and expanding market reach, supporting long-term business sustainability.

New Routes and Loyalty Program

Expanding international routes and a successful loyalty program enhance customer retention and revenue diversification, strengthening competitive positioning.

Leadership Transition

Leadership transition supports operational excellence and strategic integration, potentially improving efficiency and market position.

Negative Factors

Increased Leverage

Higher leverage can strain financial flexibility, posing risks to long-term stability if not managed effectively.

Profitability Challenges

Low profitability margins highlight challenges in converting revenue into profit, impacting long-term financial health and investment capacity.

Cash Flow Issues

Negative free cash flow indicates cash management issues, potentially limiting growth investments and operational resilience.

Alaska Air Business Overview & Revenue Model

Company Description

Alaska Air Group, Inc., through its subsidiaries, provides passenger and cargo air transportation services. The company operates through three segments: Mainline, Regional, and Horizon. It flies to approximately 120 destinations throughout North America. Alaska Air Group, Inc. was founded in 1932 and is based in Seattle, Washington.

How the Company Makes Money

Alaska Air generates revenue primarily through the sale of passenger tickets, which includes both domestic and international flights. Ticket sales account for the majority of its revenue. Additionally, the company earns income from ancillary services, such as baggage fees, seat selection, and in-flight services. The frequent flyer program, Mileage Plan, also contributes to revenue by promoting customer loyalty and generating additional sales from partners. Furthermore, Alaska Air benefits from cargo services, providing freight transportation for various goods. Partnerships with other airlines for codeshare agreements and interline services expand its network and customer base, further enhancing revenue opportunities.

Alaska Air Financial Statement Overview

Summary

Alaska Air is on a recovery path with revenue growth and improved gross margins, but profitability and cash flow management remain areas of concern. The increased leverage could pose risks if not managed carefully, and operational efficiency improvements are needed to enhance profitability.

Income Statement

Alaska Air has shown a positive revenue growth rate of 5.16% in the TTM, indicating a recovery trajectory. However, the net profit margin remains low at 1.06%, reflecting challenges in converting revenue into profit. The gross profit margin is strong at 72.99%, but EBIT and EBITDA margins are relatively modest, suggesting room for operational efficiency improvements.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.61, indicating higher leverage, which could pose risks if not managed properly. Return on equity has decreased to 3.64%, showing reduced profitability for shareholders. The equity ratio is stable, reflecting a balanced asset structure.

Cash Flow

Free cash flow has significantly improved, but remains negative, highlighting cash management challenges. The operating cash flow to net income ratio is 0.20, indicating moderate cash generation relative to net income. The free cash flow to net income ratio is negative, suggesting cash flow issues despite profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.14B	11.73B	10.43B	9.65B	6.18B	3.57B
Gross Profit	5.84B	2.86B	2.46B	2.13B	817.00M	-783.00M
EBITDA	1.30B	1.43B	1.24B	1.10B	137.00M	-1.92B
Net Income	150.00M	395.00M	235.00M	58.00M	478.00M	-1.32B
Balance Sheet
Total Assets	20.01B	19.77B	15.83B	15.35B	14.96B	14.05B
Cash, Cash Equivalents and Short-Term Investments	2.30B	2.48B	1.79B	2.42B	3.12B	3.35B
Total Debt	6.47B	6.39B	3.82B	3.78B	4.09B	5.05B
Total Liabilities	15.98B	15.40B	11.72B	11.53B	11.16B	11.06B
Stockholders Equity	4.03B	4.37B	4.11B	3.82B	3.80B	2.99B
Cash Flow
Free Cash Flow	-54.00M	183.00M	-444.00M	-253.00M	738.00M	-440.00M
Operating Cash Flow	1.34B	1.46B	1.05B	1.42B	1.03B	-234.00M
Investing Cash Flow	-1.19B	-634.00M	-964.00M	-1.22B	-1.01B	-593.00M
Financing Cash Flow	-378.00M	119.00M	-147.00M	-325.00M	-914.00M	1.98B

Alaska Air Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALK, the sentiment is Positive. The current price of 51.38 is above the 20-day moving average (MA) of 49.14, above the 50-day MA of 45.38, and above the 200-day MA of 50.34, indicating a bullish trend. The MACD of 2.20 indicates Negative momentum. The RSI at 60.53 is Neutral, neither overbought nor oversold. The STOCH value of 40.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALK.

Alaska Air Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DAL	80 Outperform	$46.33B	10.00	28.52%	0.96%	4.33%	-1.58%
UAL	74 Outperform	$37.17B	11.50	25.59%	―	4.24%	20.29%
LUV	66 Neutral	$21.45B	63.21	4.22%	1.73%	0.65%	―
AAL	64 Neutral	$10.35B	18.85	―	―	1.27%	118.64%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ALK	54 Neutral	$5.96B	41.23	3.53%	―	31.50%	-49.15%
JBLU	51 Neutral	$1.72B	-3.61	-19.09%	―	-2.49%	47.88%

Alaska Air Corporate Events

Alaska Air Revises Q4 2025 Earnings Expectations

Alaska Air Group has revised its Q4 2025 adjusted earnings per share expectations from at least $0.40 to approximately $0.10 due to several transitory challenges. These include an IT outage, government shutdown, and increased fuel costs, which collectively impacted earnings by $0.55-0.60 per share. Despite these setbacks, the company has made significant progress in integration and cost alignment, positioning itself for strategic advancements and long-term value delivery.

Alaska Air to Update Q4 Guidance After IT Issues

Alaska Air Group announced that it will provide updated guidance for the fourth quarter in early December, following a comprehensive assessment of the financial impact from recent IT disruptions. The company has decided not to reschedule or host an earnings call for the third quarter, with results disclosed via an SEC filing on October 24.

Alaska Air Reports Strong Q3 2025 Financial Results

Alaska Air Group reported strong financial results for the third quarter of 2025, with a GAAP net income of $73 million and adjusted earnings per share of $1.05. The company announced new nonstop routes from Seattle to London and Reykjavik starting in May 2026, and launched the Atmos Rewards loyalty program, which exceeded premium credit card sign-up expectations. Additionally, Alaska Air is installing Starlink high-speed Wi-Fi across its fleet, offering complimentary access to Atmos Rewards members. The company continues to integrate Hawaiian Airlines and advance its Alaska Accelerate strategy, aiming for significant growth and profitability by 2027.

Alaska Air Faces IT Outage, Postpones Conference Call

On October 23, 2025, Alaska Air Group experienced an IT outage that led to a temporary ground stop for Alaska and Horizon operations. Although the ground stop has been lifted, the company is still assessing the operational impacts and has postponed its third quarter conference call originally scheduled for October 24, 2025, due to the disruption.

Alaska Air Announces COO Transition Amid Integration

On September 25, 2025, Alaska Air Group announced the retirement of Constance von Muehlen, the COO of Alaska Airlines, effective February 15, 2026. Jason Berry, who has been with Horizon Air and Alaska Air Group in various leadership roles, will succeed her as COO starting November 3, 2025. This leadership transition is part of Alaska Airlines’ ongoing integration with Hawaiian Airlines, aiming to achieve a single operating certificate from the FAA. The changes reflect the company’s commitment to operational excellence and are expected to strengthen its position as a global premium airline. Andy Schneider will take over as CEO and President of Horizon Air, bringing extensive experience within the company.

Alaska Air Faces Earnings Pressure Amid High Fuel Costs

Alaska Air Group’s third quarter adjusted earnings per share are expected to be at the lower end of the previously guided range due to high fuel costs and operational challenges, including weather and air traffic control issues. Despite these challenges, revenue trends remain strong with positive yields and a successful launch of the Atmos Rewards loyalty program, which exceeded expectations and expanded beyond core markets.