# Alaska Air Group (ALK.US)

Canonical: https://gigainvestors.com/s/ALK

Analysis as of: 2026-10-16T07:26:23.352Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $36.50 per share; close as of 2026-10-15.

Estimated value: low $42.89 per share, central $45.84 per share, high $49.77 per share. Buy at or below the central value $45.84 per share. Valuation as of 2026-10-16T07:26:23.352Z; scenarios are not confidence intervals.

Expected annual return: 14.6% at the stated quote. About 14.6% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 2

- Operating margin variation: 27.11×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.15×

- FY2018: 0.08×

- FY2019: 0.12×

- FY2020: -0.50×

- FY2021: 0.11×

- FY2022: 0.01×

- FY2023: 0.04×

- FY2024: 0.05×

- FY2025: 0.02×

- LTM to Jun 2026: -0.02×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 7.1%

- ROIC, second-lowest year: -3.0%

- Typical minus recent gross margin: -34.8 pp

- Typical gross margin (annual median): 24.8%

- Recent gross margin (lower of latest and 3-year median): 59.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 11.0%

- ROIC including acquisitions, ten-year median: 4.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 40.6%

- FY2018: 18.0%

- FY2019: 19.7%

- FY2020: -53.0%

- FY2021: 19.1%

- FY2022: 1.6%

- FY2023: 6.8%

- FY2024: 7.4%

- FY2025: 3.4%

- LTM to Jun 2026: -3.0%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 1.02×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $1.3B

- Net income, five-year total: $1.3B

- Return on incremental invested capital: -11.5%

- Working capital / revenue, annual change: -0.1 pp

- Working capital / revenue, change between three-year averages: -0.2 pp

- Working capital / revenue, final three-year average: 3.6%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.21×

- FY2022: 1.00×

- FY2023: 0.66×

- FY2024: 1.00×

- FY2025: 1.00×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 38.7% vs 6.8%

- Per-share earnings: 6.55 to 1.83 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.8%

- Ordinary dilution, 5-year annual growth: -0.6%

- Market cap gain: -$5.1B

- Cumulative retained earnings: $1.5B

- Diluted shares, 10-year annual growth: -0.8%

- Diluted shares, 5-year annual growth: -0.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: -14.8%

- Per-share value change: -$4.73

- Per-share value, starting three-year median: $6.55

- Per-share value, ending three-year median: $1.83

- Buybacks concentrated in cheaper years (correlation): 0.17

- Average buyback yield: 2.4%

- Buyback history: 9 years

- Debt-funded buybacks: Yes

- Acquisition spending: $5.7B

- Cumulative net income, 10 years: $2.9B

- ROIC, first three-year median: 38.7%

- ROIC, last three-year median: 6.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $6.41

- FY2017: $7.75

- FY2018: $3.52

- FY2019: $6.19

- FY2020: -$10.72

- FY2021: $3.77

- FY2022: $0.45

- FY2023: $1.83

- FY2024: $3.08

- FY2025: $0.83

### accounting: pass

- Sloan accruals: -5.6%

- Receivables to sales index (DSRI): 0.83×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.8%

- Earnings backed by cash: Yes

- Operating cash / earnings: 12.49×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.86×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -5.9%

- FY2017: -5.9%

- FY2018: -6.9%

- FY2019: -6.8%

- FY2020: -7.8%

- FY2021: -3.7%

- FY2022: -8.9%

- FY2023: -5.1%

- FY2024: -5.4%

- FY2025: -5.6%

## Holders

- [Sarah Ketterer](https://gigainvestors.com/CAU): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Christopher Bloomstran](https://gigainvestors.com/SA): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 50% since Jan 2025 · "Alaska Air suspends 2026 guidance as fuel costs soar" (finance.yahoo.com, Apr 2026) · sales +3.7%

Story as of 2026-10-16T09:58:16.446Z; price observation 2026-10-15.

Price needs cash profits to shrink 5.2% a year for ten years

- 2025-04-23: Alaska Air pulls its 2025 outlook, sees weaker profit in second quarter ([ca.finance.yahoo.com](https://ca.finance.yahoo.com/news/alaska-air-pulls-2025-outlook-213640767.html))

- 2025-08-12: ALK upgrades its full-year revenue outlook ([globenewswire.com](https://www.globenewswire.com/news-release/2025/08/12/3131718/0/en/ALK-upgrades-its-full-year-revenue-outlook.html))

- 2025-09-15: Alaska Air Cuts Profit Outlook As Fuel Costs Jump And IT Outage Hits ([finance.yahoo.com](https://finance.yahoo.com/news/alaska-air-cuts-profit-outlook-145137297.html))

- 2025-10-24: Alaska Airlines (ALK): $282 Million One-Off Loss Tests Margin Recovery Narratives ([finance.yahoo.com](https://finance.yahoo.com/news/alaska-airlines-alk-282-million-221434078.html))

- 2026-03-30: Alaska Air Says Higher Fuel Costs Will Exacerbate Losses ([finance.yahoo.com](https://finance.yahoo.com/m/01b84b66-9905-37b0-bcb8-b92fb7f5b154/alaska-air-says-higher-fuel.html))

- 2026-05-04: ALK upgrades its full-year outlook ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/alk-upgrades-full-outlook-100900790.html))

### Sales · FY2025–2026

sales +3.7%; source https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm; observed 2026-02-12.

- FY2017: $7.9B 

- FY2018: $8.3B 

- FY2019: $8.8B 

- FY2020: $3.6B 

- FY2021: $6.2B 

- FY2022: $9.6B 

- FY2023: $10B 

- FY2024: $12B 

- FY2025: $14B 

- FY2026: $15B 

### Gross margin · FY2026

gross margin 94.6%; source https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm; observed 2026-02-12.

- FY2017: 33.3% 

- FY2018: 25.3% 

- FY2019: 26.9% 

- FY2021: 13.2% 

- FY2022: 22.1% 

- FY2023: 23.6% 

- FY2024: 24.4% 

- FY2025: 59.7% 

- FY2026: 94.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in airlines; annual sales are USD 14.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm (filed 2026-02-12); FY2025: revenue 14239000000; grossProfit 8495000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 23.6% to 59.7% during 2023–25; it earns 7.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2023: grossProfit / revenue = 23.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2024: grossProfit / revenue = 24.4%.

- Source: https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm (filed 2026-02-12); FY2025: grossProfit / revenue = 59.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); 10-year return on capital observations [[2017,0.4059175305003439],[2018,0.17956130681364327],[2019,0.19748989172745157],[2020,-0.5301512287334593],[2021,0.19088978320195563],[2022,0.016361797218494473],[2023,0.06830029705723754],[2024,0.07422193066026694],[2025,0.033663300336633006],[2026,-0.030156782549420585]]; median 0.07126111385875225. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 5 of 10 years; bought back USD 570 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2016: growth capex 276214176.0376375; upkeep 401785823.9623625; owner earnings 758214176.0376375. Growth capex / owner earnings = 0.3642957158637012.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2017: growth capex 654000000; upkeep 372000000; owner earnings 960000000. Growth capex / owner earnings = 0.68125.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2018: growth capex 313312262.3644109; upkeep 646687737.6355891; owner earnings 188312262.36441088. Growth capex / owner earnings = 1.6637910799356619.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2019: growth capex 273000000; upkeep 423000000; owner earnings 769000000. Growth capex / owner earnings = 0.3550065019505852.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2021: growth capex 0; upkeep 292000000; owner earnings 580000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2022: growth capex 1256000000; upkeep 415000000; owner earnings 58000000. Growth capex / owner earnings = 21.655172413793103.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2023: growth capex 962251697.8417504; upkeep 531748302.1582496; owner earnings 154251697.84175038. Growth capex / owner earnings = 6.238191937627435.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); FY2024: growth capex 698000000; upkeep 583000000; owner earnings 395000000. Growth capex / owner earnings = 1.7670886075949368.

- Source: https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm (filed 2026-02-12); FY2025: growth capex 793000000; upkeep 795000000; owner earnings 100000000. Growth capex / owner earnings = 7.93.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Dividend observations: [[2016,136000000],[2017,148000000],[2018,158000000],[2019,173000000],[2020,45000000],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm (filed 2026-02-12); FY2025: cash repurchases 570000000 USD.

### Are managers owners

Insiders own 0.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ALK.US SharesStats.PercentInsiders = 0.598 percentage points; cache date 2026-10-16.

### What could break it

Approximately 78% of our capacity to and from Seattle competes with Delta.

- Source: https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm (filed 2026-02-12); Our largest competitor is Delta Air Lines Inc. (Delta). Approximately 78% of our capacity to and from Seattle competes with Delta. In addition to Delta, Southwest Airlines and United Airlines are significant competitors in the state of Hawai'i and on the West Coast.

### What the price says

The price assumes cash profits shrink 5.2% yearly over ten years; actual decline was 14.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-12); Ten-year compound average after fade. Initial solved rate -0.08574968063481175. Price 36.5; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 4.018774356287502 → FY2025 0.8338475393159115. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $72.22 per share

- 2016-11: $82.27 per share

- 2016-12: $88.73 per share

- 2017-01: $93.82 per share

- 2017-02: $97.82 per share

- 2017-03: $92.22 per share

- 2017-04: $85.09 per share

- 2017-05: $87.05 per share

- 2017-06: $89.76 per share

- 2017-07: $85.23 per share

- 2017-08: $74.66 per share

- 2017-09: $76.27 per share

- 2017-10: $66.03 per share

- 2017-11: $69.17 per share

- 2017-12: $73.51 per share

- 2018-01: $65.73 per share

- 2018-02: $64.50 per share

- 2018-03: $61.96 per share

- 2018-04: $64.93 per share

- 2018-05: $60.81 per share

- 2018-06: $60.39 per share

- 2018-07: $62.83 per share

- 2018-08: $67.49 per share

- 2018-09: $68.86 per share

- 2018-10: $61.42 per share

- 2018-11: $73.26 per share

- 2018-12: $60.85 per share

- 2019-01: $63.95 per share

- 2019-02: $61.70 per share

- 2019-03: $56.12 per share

- 2019-04: $61.90 per share

- 2019-05: $58.20 per share

- 2019-06: $63.91 per share

- 2019-07: $63.36 per share

- 2019-08: $59.72 per share

- 2019-09: $64.91 per share

- 2019-10: $69.43 per share

- 2019-11: $69.01 per share

- 2019-12: $67.75 per share

- 2020-01: $64.59 per share

- 2020-02: $50.46 per share

- 2020-03: $28.47 per share

- 2020-04: $32.52 per share

- 2020-05: $34.19 per share

- 2020-06: $36.26 per share

- 2020-07: $34.44 per share

- 2020-08: $38.95 per share

- 2020-09: $36.63 per share

- 2020-10: $37.89 per share

- 2020-11: $50.97 per share

- 2020-12: $52.00 per share

- 2021-01: $48.83 per share

- 2021-02: $65.02 per share

- 2021-03: $69.21 per share

- 2021-04: $69.14 per share

- 2021-05: $69.20 per share

- 2021-06: $60.31 per share

- 2021-07: $58.03 per share

- 2021-08: $57.34 per share

- 2021-09: $58.60 per share

- 2021-10: $52.80 per share

- 2021-11: $48.57 per share

- 2021-12: $52.10 per share

- 2022-01: $54.74 per share

- 2022-02: $56.14 per share

- 2022-03: $58.01 per share

- 2022-04: $54.39 per share

- 2022-05: $48.26 per share

- 2022-06: $40.05 per share

- 2022-07: $44.33 per share

- 2022-08: $43.56 per share

- 2022-09: $39.15 per share

- 2022-10: $44.46 per share

- 2022-11: $47.44 per share

- 2022-12: $42.94 per share

- 2023-01: $51.34 per share

- 2023-02: $47.83 per share

- 2023-03: $41.96 per share

- 2023-04: $43.46 per share

- 2023-05: $44.93 per share

- 2023-06: $53.18 per share

- 2023-07: $48.63 per share

- 2023-08: $41.97 per share

- 2023-09: $37.08 per share

- 2023-10: $31.63 per share

- 2023-11: $37.81 per share

- 2023-12: $39.07 per share

- 2024-01: $35.83 per share

- 2024-02: $37.39 per share

- 2024-03: $42.99 per share

- 2024-04: $43.02 per share

- 2024-05: $42.02 per share

- 2024-06: $40.40 per share

- 2024-07: $37.53 per share

- 2024-08: $36.11 per share

- 2024-09: $45.21 per share

- 2024-10: $47.91 per share

- 2024-11: $52.60 per share

- 2024-12: $64.75 per share

- 2025-01: $73.25 per share

- 2025-02: $72.28 per share

- 2025-03: $49.22 per share

- 2025-04: $44.27 per share

- 2025-05: $50.93 per share

- 2025-06: $49.48 per share

- 2025-07: $52.96 per share

- 2025-08: $62.78 per share

- 2025-09: $49.78 per share

- 2025-10: $41.73 per share

- 2025-11: $42.86 per share

- 2025-12: $50.30 per share

- 2026-01: $50.83 per share

- 2026-02: $51.60 per share

- 2026-03: $36.78 per share

- 2026-04: $39.11 per share

- 2026-05: $46.02 per share

- 2026-06: $52.20 per share

- 2026-07: $47.45 per share

- 2026-08: $41.33 per share

- 2026-09: $38.70 per share

- 2026-10: $36.50 per share

## Annual estimated value (USD per share)

- FY2016: low $68.23 per share, central $87.29 per share, high $100.21 per share

- FY2017: low $94.79 per share, central $126.93 per share, high $146.85 per share

- FY2018: low $89.93 per share, central $120.70 per share, high $140.06 per share

- FY2019: low $100.03 per share, central $138.26 per share, high $160.52 per share

- FY2020: low $54.18 per share, central $57.99 per share, high $63.06 per share

- FY2021: low $70.24 per share, central $76.67 per share, high $85.23 per share

- FY2022: low $36.17 per share, central $38.76 per share, high $42.21 per share

- FY2023: low $25.39 per share, central $27.20 per share, high $29.61 per share

- FY2024: low $32.23 per share, central $34.27 per share, high $36.99 per share

- FY2025: low $34.53 per share, central $37.18 per share, high $40.70 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm); period 2025-12-31, filed 2026-02-12.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.