Alaska Air (ALK) AI Stock Analysis

• Market Cap: $6.57B
• Dividend Yield: N/A
• Average Volume (3M): 3.89M
• Price to Earnings (P/E): 19.2
• Beta (1Y): 0.79
• Revenue Growth: 20.82%
• EPS Growth: 47.79%
• Country: US
• Employees: 29,773
• Sector: Industrials
• Sector Strength: 88
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.77
• Shares Outstanding: 121,392,510
• 10 Day Avg. Volume: 3,375,353
• 30 Day Avg. Volume: 3,885,946
• PEG Ratio: -1.73
• Price to Book (P/B): 1.45
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 35.34
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $67.36
• Price Target Upside: 25.55% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

Alaska Air's overall score reflects strong financial performance and positive strategic initiatives. However, technical weaknesses and moderate valuation temper the outlook. The company is on a promising growth path with solid revenue and profitability metrics, but it faces challenges including potential cash flow volatility and a challenging macroeconomic environment.

Positive Factors

Financial Performance

Alaska Air reported strong EPS for 4Q24, significantly beating its updated guidance, driven by lower unit costs and an uptick in corporate travel.

Merger Synergies

The HA merger looks to be a situation where 1 + 1 = 3 and the two franchises are fitting hand in glove.

Stock Buyback

ALK has repurchased nearly $150M in stock year-to-date, indicating a compelling opportunity in the current environment and ability to generate solid profitability.

Negative Factors

Market Demand

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 a prominent airline holding company headquartered in SeaTac, Washington. It operates through its subsidiaries, Alaska Airlines and Horizon Air, serving a comprehensive network that spans over 115 destinations across the United States, Mexico, Canada, and Costa Rica. The company is renowned for its focus on customer service, operational efficiency, and a robust route structure, offering a range of services from basic economy to first-class seating. Alaska Air Group is committed to sustainable practices and innovation in its operations, enhancing the overall travel experience for its customers.

How the Company Makes Money

Alaska Air Group primarily generates revenue through passenger ticket sales, which constitute the largest portion of its earnings. The company offers various fare classes and ancillary services such as baggage fees, seat selection, and in-flight purchases, contributing to additional revenue streams. Cargo services also play a role in the company's revenue model, with Alaska Air providing freight and mail transportation. The company benefits from strategic partnerships and codeshare agreements with other airlines, expanding its network reach and customer base. Additionally, Alaska Air Group capitalizes on its loyalty program, Mileage Plan, which drives customer retention and revenue through partnerships with hotels, car rental agencies, and other travel-related services.

Alaska Air Financial Statement Overview

Summary

Alaska Air demonstrates a robust financial trajectory with strong revenue growth and improving profit margins. The balance sheet shows a moderate debt-to-equity ratio and commendable ROE, though there's room for enhancing financial stability by strengthening the equity base. Cash flows are positive, with effective capital expenditure management, yet potential volatility in future cash reserves requires careful monitoring.

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
5.27B	2.36B	2.46B	1.66B	1.35B	-414.00M
	EBIT
690.00M	570.00M	394.00M	338.00M	341.00M	-1.75B
	EBITDA
1.31B	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
2.49B	2.48B	1.80B	2.42B	3.12B	3.35B
	Total Assets
19.82B	19.77B	15.83B	14.28B	13.95B	14.05B
	Total Debt
1.99B	6.39B	3.82B	3.88B	4.09B	5.05B
	Net Debt
1.99B	5.19B	3.54B	3.54B	3.62B	3.68B
	Total Liabilities
15.68B	15.40B	11.72B	10.46B	10.15B	11.04B
	Stockholders Equity
4.14B	4.37B	4.11B	3.82B	3.80B	3.00B
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: Positive
• Last Price: 53.65
• 50DMA: Positive
• 100DMA: Negative
• 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 53.65 is above the 20-day moving average (MA) of 48.16, above the 50-day MA of 49.41, and above the 200-day MA of 52.40, indicating a bullish trend. The MACD of 1.43 indicates Negative momentum. The RSI at 60.11 is Neutral, neither overbought nor oversold. The STOCH value of 78.39 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	76 Outperform	$25.80B	6.98	33.57%	―	5.31%	35.95%
DAL	75 Outperform	$33.03B	8.97	27.52%	1.09%	4.91%	-27.21%
ALK	69 Neutral	$6.57B	19.25	8.90%	―	20.82%	47.79%
Sector *	64 Neutral	$4.39B	12.06	5.17%	249.63%	4.03%	-11.04%
LUV	59 Neutral	$17.88B	37.26	5.63%	2.26%	3.26%	27.77%
AAL	57 Neutral	$7.81B	13.58	-21.27%	―	1.92%	36.07%
JBLU	38 Underperform	$1.78B	―	-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.

Spark’s Take on ALK Stock

According to Spark, TipRanks’ AI Analyst, ALK is a Neutral.

Alaska Air’s overall score reflects strong financial performance and positive strategic initiatives. However, technical weaknesses and moderate valuation temper the outlook. The company is on a promising growth path with solid revenue and profitability metrics, but it faces challenges including potential cash flow volatility and a challenging macroeconomic environment.

To see Spark’s full report on ALK stock, click here.

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.

Spark’s Take on ALK Stock

According to Spark, TipRanks’ AI Analyst, ALK is a Neutral.

Alaska Air’s overall score reflects strong financial performance and positive strategic initiatives, balanced by technical weakness and moderate valuation. The earnings call highlights record revenue and strategic growth plans, while technical indicators suggest current bearish trends.

To see Spark’s full report on ALK stock, click here.