Investment Thesis
Alaska Air Group faces significant profitability challenges despite strong revenue growth of 21.3% YoY, with net income collapsing 74.7% and net margins deteriorating to just 0.7%. The company operates with dangerously low liquidity (0.50x current ratio) and elevated leverage (1.29x debt-to-equity), creating vulnerability to operational disruptions or economic slowdown.
ALK Strengths
- Strong revenue growth of 21.3% YoY demonstrates sustained demand in air transportation
- Positive free cash flow of $1.2B with healthy 8.4% FCF margin provides operational cash generation
- Operating cash flow of $1.2B supports debt service and capital investments
ALK Risks
- Severe profitability deterioration with net income down 74.7% YoY and net margin collapsing to 0.7%, indicating margin compression and cost control challenges
- Critically low liquidity ratios (current ratio 0.50x, quick ratio 0.46x) with only $627M cash against $5.3B long-term debt creates financial stress
- Weak return metrics (ROE 2.4%, ROA 0.5%) and operating margin of only 2.1% suggest operational inefficiency typical of distressed aviation operators
Key Metrics to Watch
- Net margin trend and path to profitability recovery
- Cash position and liquidity ratios given debt service obligations
- Operating margin expansion amid fuel and labor cost pressures
ALK Financial Metrics
ALK Profitability Ratios
ALK Balance Sheet & Liquidity
ALK 5-Year Financial Trend
5-Year Trend Summary: ALASKA AIR GROUP, INC.'s revenue has grown significantly by 21% over the 5-year period, indicating strong business expansion. The most recent EPS of $1.83 reflects profitable operations.
ALK Growth Metrics (YoY)
ALK Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $3.1B | $73.0M | $0.62 |
| Q2 2025 | $2.9B | $6.0M | $0.05 |
| Q1 2025 | $2.2B | -$132.0M | $-1.05 |
| Q3 2024 | $95.0M | -$132.0M | $1.08 |
| Q2 2024 | $2.8B | $88.0M | $0.69 |
| Q1 2024 | $2.2B | -$132.0M | $-1.05 |
| Q3 2023 | $2.8B | $36.0M | $0.28 |
| Q2 2023 | $2.7B | -$4.0M | $-0.03 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ALK Capital Allocation
ALK SEC Filings
Access official SEC EDGAR filings for ALASKA AIR GROUP, INC. (CIK: 0000766421)