Alaska Air (ALK) AI Stock Analysis

• Market Cap: $7.34B
• Dividend Yield: N/A
• Average Volume (3M): 2.34M
• Price to Earnings (P/E): 25.3
• Beta (1Y): 0.80
• Revenue Growth: 27.81%
• EPS Growth: 43.03%
• Country: US
• Employees: 29,773
• Sector: Industrials
• Sector Strength: 71
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 1.78
• Shares Outstanding: 115,310,450
• 10 Day Avg. Volume: 2,451,723
• 30 Day Avg. Volume: 2,340,972
• 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: 1.39
• Enterprise Value/Revenue: 0.76
• Enterprise Value/Gross Profit: 1.35
• Enterprise Value/Ebitda: 7.68
• 1Y Price Target: $62.00
• Price Target Upside: -1.04% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 68 Neutral
• Price Target: $69.00 ▲(10.14% Upside)

Alaska Air's overall stock score reflects strong financial recovery and bullish technical indicators. However, increased leverage, high valuation, and potential risks from cybersecurity incidents and operational disruptions temper the outlook. Strategic growth initiatives and international expansion provide a positive long-term view.

Positive Factors

Revenue Growth

The consistent revenue growth indicates robust demand recovery and effective strategic initiatives, positioning Alaska Air for sustained market expansion.

International Expansion

Expanding international routes enhances Alaska Air's global footprint, diversifying revenue streams and strengthening its competitive position in the airline industry.

Premium Revenue Growth

Growth in premium revenues reflects successful product differentiation and customer loyalty, contributing to higher margins and profitability.

Negative Factors

Rising Leverage

Increased leverage can strain financial flexibility and elevate risk, potentially impacting Alaska Air's ability to invest in growth opportunities.

Negative Free Cash Flow

Negative free cash flow limits financial flexibility, necessitating careful capital management to sustain operations and fund strategic initiatives.

Elevated Unit Costs

Rising unit costs can pressure margins, requiring effective cost management to maintain profitability and competitive pricing in the airline industry.

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 passenger ticket sales, which constitute the bulk of its income. The company also earns money from cargo services, ancillary fees (such as baggage fees, seat selection fees, and in-flight purchases), and its loyalty program which drives repeat business and customer retention. Additionally, partnerships with other airlines and travel-related services enhance revenue streams through codeshare agreements and joint marketing initiatives. Seasonal promotions and strategic pricing help optimize revenue during peak travel periods.

Alaska Air Financial Statement Overview

Summary

Alaska Air's financial performance shows a strong post-pandemic recovery with significant revenue growth and improved profitability margins. However, increased leverage and negative free cash flow due to high capital expenditures pose potential risks.

Income Statement

Alaska Air demonstrates a strong recovery with a consistent increase in total revenue from $3,566M in 2020 to $13,447M in TTM (Trailing-Twelve-Months) 2025. The gross profit margin improved significantly, reaching 59.15% in TTM 2025. Net profit margin also recovered to 2.33% in TTM 2025 from negative figures in 2020. However, the EBIT margin decreased slightly from 4.86% in 2024 to 3.67% in TTM 2025, suggesting a need for cost control. Revenue growth rate year-over-year shows a positive trajectory, indicating robust demand recovery in the airline industry.

Balance Sheet

The debt-to-equity ratio increased slightly in TTM 2025, as total debt rose to $6,373M while equity decreased to $3,942M, indicating rising leverage. ROE decreased to 7.94% in TTM 2025 from 9.03% in 2024, reflecting a reduced ability to generate profits from equity. The equity ratio was stable around 19.82% in TTM 2025, which shows a moderate reliance on equity financing. These figures suggest a stable but cautious financial position with moderate risk due to increased leverage.

Cash Flow

Operating cash flow remained robust at $1,427M in TTM 2025, indicating strong operational performance. However, free cash flow turned negative in TTM 2025 at -$8M, mainly due to capital expenditures, which may limit Alaska Air's financial flexibility. The operating cash flow to net income ratio indicates a healthy conversion of earnings into cash. However, the free cash flow to net income ratio is negative, signaling the need for careful capital management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.45B	11.73B	10.43B	9.65B	6.18B	3.57B
Gross Profit	7.58B	2.12B	2.46B	1.66B	1.35B	-414.00M
EBITDA	1.33B	1.27B	1.27B	1.20B	137.00M	-1.33B
Net Income	313.00M	395.00M	235.00M	58.00M	478.00M	-1.31B
Balance Sheet
Total Assets	19.89B	19.77B	14.61B	14.28B	13.95B	14.05B
Cash, Cash Equivalents and Short-Term Investments	2.15B	2.48B	1.80B	2.42B	3.12B	3.35B
Total Debt	6.37B	6.39B	3.82B	3.78B	4.09B	5.05B
Total Liabilities	15.94B	15.40B	10.50B	10.46B	10.15B	11.06B
Stockholders Equity	3.94B	4.37B	4.11B	3.82B	3.80B	2.99B
Cash Flow
Free Cash Flow	-8.00M	183.00M	-444.00M	-253.00M	738.00M	-440.00M
Operating Cash Flow	1.43B	1.46B	1.05B	1.42B	1.03B	-234.00M
Investing Cash Flow	-1.25B	-634.00M	-964.00M	-1.22B	-1.01B	-593.00M
Financing Cash Flow	-512.00M	119.00M	-147.00M	-325.00M	-914.00M	1.98B

Alaska Air Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 62.65
• 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 62.65 is above the 20-day moving average (MA) of 60.23, above the 50-day MA of 55.55, and above the 200-day MA of 56.96, indicating a bullish trend. The MACD of 2.38 indicates Negative momentum. The RSI at 64.67 is Neutral, neither overbought nor oversold. The STOCH value of 46.36 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
UAL	82 Outperform	$34.89B	10.59	27.70%	―	4.23%	13.13%
DAL	80 Outperform	$40.08B	8.90	30.07%	1.04%	3.01%	-0.90%
ALK	68 Neutral	$7.34B	25.32	7.66%	―	27.81%	43.03%
AAL	66 Neutral	$8.54B	16.41	-21.27%	―	1.50%	―
Sector *	63 Neutral	$10.70B	15.26	7.37%	2.02%	2.87%	-14.59%
LUV	58 Neutral	$16.34B	46.78	4.30%	2.31%	1.64%	284.24%
JBLU	56 Neutral	$1.85B	―	-15.12%	―	-1.90%	61.06%

Alaska Air Corporate Events

Alaska Air Amends Term Loan Agreement

On August 6, 2025, Alaska Air Group, Inc. amended its Term Loan Credit and Guaranty Agreement, initially dated October 15, 2024, to reprice loans under its Loyalty Term Loan Facility. This amendment, involving AS Mileage Plan IP, Ltd. and Bank of America, N.A., adjusts interest rates to a variable rate tied to Term SOFR with specific margins, potentially impacting the company’s financial strategy and stakeholder interests.

Alaska Air Reports Strong Q2 2025 Financial Results

Alaska Air Group reported strong financial results for the second quarter of 2025, with earnings per share surpassing expectations. The company announced its first transatlantic route from Seattle to Rome, set to begin in May 2026, and highlighted significant operational expansions, including new international services and fleet growth. The integration of Hawaiian Airlines contributed to a notable improvement in financial performance, with a focus on network transformation and revenue diversification. Despite a cybersecurity incident, operations remained unaffected, and the company remains optimistic about future growth, projecting full-year earnings per share to exceed $3.25.

Alaska Air Faces Cybersecurity Incident at Hawaiian Airlines

On June 23, 2025, Hawaiian Airlines, a subsidiary of Alaska Air Group, Inc., experienced a cybersecurity incident affecting its IT systems. The company has taken immediate measures to protect operations and is investigating the issue with authorities, though the financial impact remains undetermined.