Alaska Air (ALK) AI Stock Analysis

• Market Cap: $5.78B
• Dividend Yield: N/A
• Average Volume (3M): 2.70M
• Price to Earnings (P/E): 56.9
• 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): 0.43
• Shares Outstanding: 115,988,610
• 10 Day Avg. Volume: 3,487,115
• 30 Day Avg. Volume: 2,703,993
• PEG Ratio: -0.82
• Price to Book (P/B): 1.41
• Price to Sales (P/S): 0.41
• P/FCF Ratio: -17.14
• Enterprise Value/Market Cap: 2.08
• Enterprise Value/Revenue: 0.85
• Enterprise Value/Gross Profit: 1.42
• Enterprise Value/Ebitda: 9.31
• 1Y Price Target: $73.27
• Price Target Upside: 44.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: $52.00 ▲(2.22% Upside)

The score is held back primarily by weakening profitability, negative free cash flow, and rising leverage despite strong revenue and operating cash flow. Technicals are moderately supportive with a mild uptrend and neutral momentum, but valuation is a key headwind due to the high P/E and no dividend support.

Positive Factors

Revenue growth and operating cash flow

Sustained top-line expansion and roughly $1.25B in operating cash flow create durable capacity to fund operations, integration and fleet investment. Reliable OCF underpins strategic initiatives and provides a cushion versus cyclical demand swings over the next several years.

Strategic integration and network expansion

Combining Alaska and Hawaiian under one FAA certificate materially lowers operating complexity and supports network optimization. New long-haul routes and integration synergies can lift higher-yield corporate and international demand, improving structural revenue mix and unit economics.

Long-term fleet modernization and capacity planning

A sizeable multi-year Boeing order signals disciplined, long-horizon capacity planning and fleet renewal. Modern, fuel-efficient aircraft can reduce per-seat fuel and maintenance costs, enabling better margins and competitive positioning as international and domestic demand grows over the coming decade.

Negative Factors

Rising leverage and debt load

Material increase in debt relative to equity reduces financial flexibility and elevates interest and refinancing risk. Higher leverage limits ability to absorb demand shocks, constrains capital allocation choices, and could pressure liquidity if margins or cash flow weaken over a 2–6 month horizon and beyond.

Inconsistent free cash flow conversion

Volatile FCF amid heavy reinvestment and capex means less predictable cash available for debt paydown or strategic returns. Negative FCF recurrence undermines capacity to delever or fund large fleet commitments without additional financing, raising structural funding risk.

Weakened profitability and margin pressure

Earnings compression despite revenue growth indicates margin stress from costs, fuel, or integration expenses. Persistent margin deterioration would impair ability to convert revenue into sustainable profits, limiting reinvestment and increasing vulnerability to economic or fuel-price shocks over the medium term.

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

Strong revenue growth and healthy operating cash flow are positives, but profitability weakened sharply in 2025 and free cash flow turned negative again. Leverage is elevated and rising (debt ~$6.9B vs equity ~$4.1B), limiting flexibility until margins and FCF stabilize.

Income Statement

Revenue has expanded strongly since 2020, with solid growth through 2024 and a sharp step-up in 2025 (annual). However, profitability has weakened recently: net income fell from $395M (2024) to $100M (2025) and operating profit also compressed, signaling margin pressure despite higher sales. Overall, the top-line trajectory is a clear positive, but earnings consistency and margin durability are the main drawbacks.

Balance Sheet

Leverage is meaningful for the business: total debt rose to ~$6.9B (2025) versus equity of ~$4.1B, and 2024 debt-to-equity was ~1.46x. Equity has been relatively stable since 2022, but debt has increased notably from 2023 levels, reducing flexibility if operating conditions soften. The balance sheet is serviceable, but the higher debt load is a key risk factor.

Cash Flow

Operating cash flow remains healthy (about $1.25B in 2025), but free cash flow has been volatile and turned negative again in 2025 (-$339M) after a positive 2024 (+$183M). This suggests heavy reinvestment/capex demands and less consistent cash generation available to de-lever or return to shareholders. Strength is solid operating cash production; weakness is inconsistent free cash flow conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	14.24B	11.73B	10.43B	9.65B	6.18B
Gross Profit	8.49B	2.86B	2.46B	2.13B	817.00M
EBITDA	1.29B	1.43B	1.24B	1.10B	137.00M
Net Income	100.00M	395.00M	235.00M	58.00M	478.00M
Balance Sheet
Total Assets	20.36B	19.77B	15.83B	15.35B	14.96B
Cash, Cash Equivalents and Short-Term Investments	2.12B	2.48B	1.79B	2.42B	3.12B
Total Debt	6.89B	6.39B	3.82B	3.78B	4.09B
Total Liabilities	16.24B	15.40B	11.72B	11.53B	11.16B
Stockholders Equity	4.12B	4.37B	4.11B	3.82B	3.80B
Cash Flow
Free Cash Flow	-339.00M	183.00M	-444.00M	-253.00M	738.00M
Operating Cash Flow	1.25B	1.46B	1.05B	1.42B	1.03B
Investing Cash Flow	-1.62B	-634.00M	-964.00M	-1.22B	-1.01B
Financing Cash Flow	-199.00M	119.00M	-147.00M	-325.00M	-914.00M

Alaska Air Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 50.87
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• 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 50.87 is above the 20-day moving average (MA) of 49.74, above the 50-day MA of 47.62, and above the 200-day MA of 50.24, indicating a neutral trend. The MACD of 0.14 indicates Positive momentum. The RSI at 51.78 is Neutral, neither overbought nor oversold. The STOCH value of 65.59 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	73 Outperform	$44.07B	8.87	27.78%	0.96%	4.33%	-1.58%
UAL	68 Neutral	$34.89B	10.53	23.99%	―	4.24%	20.29%
LUV	66 Neutral	$21.74B	63.93	4.22%	1.73%	0.65%	―
AAL	64 Neutral	$9.62B	17.52	―	―	1.27%	118.64%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ALK	55 Neutral	$5.78B	56.89	2.36%	―	31.50%	-49.15%
JBLU	51 Neutral	$1.85B	-3.87	-19.09%	―	-2.49%	47.88%

Alaska Air Corporate Events

Alaska Air posts solid Q4 2025 results, upbeat outlook

On January 22, 2026, Alaska Air Group reported fourth-quarter and full-year 2025 results, posting GAAP net income of $21 million, or $0.18 per share, and adjusted earnings of $50 million, or $0.43 per share, for the quarter, ahead of prior guidance, though full-year profitability declined from 2024. The company generated $1.2 billion in operating cash flow for the year, achieved a single FAA operating certificate for Alaska and Hawaiian Airlines, and saw diversified revenue growth with higher premium, cargo and loyalty revenues despite macro headwinds and a temporary demand hit from the November government shutdown, while also repurchasing $570 million of stock in 2025 and announcing its largest fleet order in history as part of its Alaska Accelerate strategy. Management highlighted improving demand trends early in 2026, integration synergies from Hawaiian Airlines and new international routes from Seattle to London and Rome, positioning the group to capitalize on strengthening corporate and international travel and to support its longer-term profitability ambitions, albeit within a wide 2026 earnings guidance range that reflects ongoing economic uncertainty and fuel-price risk.

The most recent analyst rating on (ALK) stock is a Buy with a $77.00 price target. To see the full list of analyst forecasts on Alaska Air stock, see the ALK Stock Forecast page.

Alaska Air Expands Future Fleet with Major Boeing Order

On December 31, 2025, Alaska Airlines finalized a significant fleet expansion with Boeing, ordering 53 additional 737-10 aircraft for delivery between 2032 and 2035, exercising options for 52 more 737-10s scheduled between 2028 and 2032, and adding 35 further 737-10 options to its long-term purchase pipeline. On the same date, the airline also exercised options for five 787 aircraft slated for delivery between 2031 and 2032, moves that collectively underscore a long-range fleet and capacity growth strategy that will shape Alaska’s network and service capabilities well into the next decade; Alaska Air Group subsequently announced the aircraft order in a press release on January 7, 2026.

The most recent analyst rating on (ALK) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on Alaska Air stock, see the ALK Stock Forecast page.

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.

The most recent analyst rating on (ALK) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on Alaska Air stock, see the ALK Stock Forecast page.

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.

The most recent analyst rating on (ALK) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on Alaska Air stock, see the ALK Stock Forecast page.