Alaska Air (ALK) AI Stock Analysis

• Market Cap: $5.69B
• Dividend Yield: N/A
• Average Volume (3M): 2.73M
• Price to Earnings (P/E): 17.0
• Beta (1Y): 0.80
• Revenue Growth: 20.82%
• EPS Growth: 47.79%
• Country: US
• Employees: 29,773
• Sector: Industrials
• Sector Strength: 84
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.77
• Shares Outstanding: 121,392,510
• 10 Day Avg. Volume: 2,797,200
• 30 Day Avg. Volume: 2,728,414
• PEG Ratio: -1.07
• Price to Book (P/B): 1.43
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -21.50
• Enterprise Value/Market Cap: 1.58
• Enterprise Value/Revenue: 0.20
• Enterprise Value/Gross Profit: 3.38
• Enterprise Value/Ebitda: 1.69
• 1Y Price Target: $65.80
• Price Target Upside: 40.06% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 68 Neutral
• Price Target: $54.00 ▲(14.94%Upside)

Alaska Air's score is bolstered by promising financial performance and positive earnings call highlights, particularly in premium revenue growth and successful asset integration. However, technical indicators and valuation metrics suggest cautious optimism, with room for improvement in operational efficiency and market conditions.

Positive Factors

Demand

Rome has been one of the most-requested destinations from Mileage Plan members, indicating strong demand.

Expansion

ALK will soon expand into Europe with direct flights from Seattle to Rome, showing management is proactive in growth.

Financial Performance

The 4Q results exceeded expectations by over 70% at the pre-tax line, easing concerns about high targets.

Negative Factors

Earnings Guidance

ALK withdrew its 2025 EPS outlook of over $5.75 while guiding 2Q25 EPS below the Street, indicative of the tough domestic demand environment.

Revenue Outlook

ALK's 2Q25 unit revenue outlook is a larger deceleration than expected and modestly lower than investor expectations.

Alaska Air Business Overview & Revenue Model

Company Description

Alaska Air Group, Inc. (ALK) is an airline holding company based in the United States, primarily operating through its subsidiaries, Alaska Airlines and Horizon Air. The company is headquartered in Seattle, Washington, and it serves a network that includes over 115 destinations across the United States, Canada, Mexico, and Costa Rica. Alaska Air Group is known for providing scheduled air transportation for passengers and cargo, and it emphasizes a strong commitment to customer service, operational efficiency, and environmental sustainability.

How the Company Makes Money

Alaska Air Group makes money primarily through passenger revenue, which includes ticket sales for domestic and international flights. This is the company's largest revenue stream, driven by factors such as flight frequency, capacity, and pricing strategies. Additionally, the company generates ancillary revenue from services such as baggage fees, seat selection, and onboard sales. Cargo and freight services provide another stream of income, capitalizing on the company's extensive route network. Alaska Air Group also benefits from partnerships and alliances with other airlines, such as code-sharing agreements, which expand its market reach and contribute to its revenue. The company's Mileage Plan loyalty program is another significant component, encouraging repeat business and generating income through credit card partnerships and mileage sales.

Alaska Air Financial Statement Overview

Summary

Alaska Air shows strong revenue growth and improved profitability, with effective cost management as seen in the robust gross profit margin. However, the EBIT margin and equity ratio suggest room for improvement in operational efficiency and financial stability.

Income Statement

Alaska Air has demonstrated a strong revenue trajectory with a consistent increase in total revenue over the years, highlighted by a significant TTM growth. The gross profit margin is robust, indicating effective cost management, while the net profit margin shows improvement, reflecting enhanced profitability. However, the EBIT margin could benefit from further enhancement to solidify operational efficiency.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. The return on equity (ROE) is commendable, showcasing effective use of equity capital to generate profits. Yet, the equity ratio suggests room for improvement in strengthening the equity base relative to total assets, which would enhance financial stability.

Cash Flow

Cash flow analysis reveals a positive trajectory in operating cash flow, underscoring strong operational cash generation capabilities. The free cash flow to net income ratio is positive, signaling effective capital expenditure management. However, fluctuations in free cash flow growth indicate potential volatility in future cash reserves, warranting careful monitoring.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
12.64B	11.73B	10.43B	9.65B	6.18B	3.57B
	Gross Profit
2.65B	2.36B	2.46B	1.66B	1.35B	-414.00M
	EBIT
690.00M	570.00M	394.00M	338.00M	341.00M	-1.75B
	EBITDA
1.43B	1.27B	1.27B	1.20B	137.00M	-1.33B
	Net Income Common Stockholders
361.00M	395.00M	235.00M	58.00M	478.00M	-1.31B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.46B	2.48B	1.80B	2.42B	3.12B	3.35B
	Total Assets
19.82B	19.77B	14.61B	14.28B	13.95B	14.05B
	Total Debt
6.28B	6.39B	3.82B	3.78B	4.09B	5.05B
	Net Debt
5.23B	5.19B	3.54B	3.44B	3.62B	3.68B
	Total Liabilities
15.68B	15.40B	10.50B	10.46B	10.15B	11.06B
	Stockholders Equity
4.14B	4.37B	4.11B	3.82B	3.80B	2.99B
Cash Flow		Free Cash Flow
169.00M	183.00M	-444.00M	-253.00M	738.00M	-440.00M
	Operating Cash Flow
1.63B	1.46B	1.05B	1.42B	1.03B	-234.00M
	Investing Cash Flow
-1.33B	-634.00M	-964.00M	-1.22B	-1.01B	-593.00M
	Financing Cash Flow
-112.00M	119.00M	-147.00M	-325.00M	-914.00M	1.98B

Alaska Air Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 46.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALK, the sentiment is Negative. The current price of 46.98 is below the 20-day moving average (MA) of 50.14, below the 50-day MA of 48.86, and below the 200-day MA of 54.16, indicating a bearish trend. The MACD of -0.84 indicates Positive momentum. The RSI at 39.87 is Neutral, neither overbought nor oversold. The STOCH value of 6.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALK.

Alaska Air Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UAL	79 Outperform	$24.27B	6.77	33.57%	―	5.31%	35.95%
DAL	78 Outperform	$31.05B	8.43	27.52%	1.26%	4.91%	-27.21%
ALK	68 Neutral	$5.69B	17.03	8.90%	―	20.82%	47.79%
LUV	68 Neutral	$17.76B	37.00	5.63%	2.31%	3.26%	27.77%
Sector *	66 Neutral	$4.44B	12.08	5.34%	5.82%	4.17%	-11.81%
AAL	61 Neutral	$6.98B	12.21	-21.27%	―	1.92%	36.07%
JBLU	43 Neutral	$1.45B	―	-11.30%	―	-3.02%	66.90%

Alaska Air Corporate Events

Alaska Air Updates Governance and Compliance Measures

On May 8, 2025, Alaska Air Group’s stockholders approved amendments to its 2016 Performance Incentive Plan and Employee Stock Purchase Plan, increasing the number of shares available and extending the plans through 2035. Additionally, on May 9, 2025, the company filed amendments to its Certificate of Incorporation to comply with foreign ownership laws and limit officer liability, and updated its Bylaws to address proxy rules and stockholder meeting procedures, reflecting a strategic move to align with regulatory requirements and enhance corporate governance.

The most recent analyst rating on (ALK) stock is a Buy with a $75.00 price target. To see the full list of analyst forecasts on Alaska Air stock, see the ALK Stock Forecast page.

Alaska Air Reports Q1 2025 Financial Results

Alaska Air Group reported its first quarter 2025 financial results, highlighting a 3.9% increase in capacity and a 9% rise in total revenue year-over-year. Despite facing economic uncertainties and softening demand, the company achieved a 7-point improvement in adjusted pretax margin compared to the previous year. The integration with Hawaiian Airlines has shown positive initial results, contributing to improved asset utilization and connectivity. The company also ratified agreements with flight attendants and expanded its fleet, aiming to strengthen its market position and operational efficiency.