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Alaska Air Group, Inc. (ALK) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Alaska Air Group (ALK - Free Report) ? Shares have been on the move with the stock up 9% over the past month. The stock hit a new 52-week high of $69.1 in the previous session. Alaska Air Group has gained 5.3% since the start of the year compared to the -3.7% move for the Zacks Transportation sector and the 35.7% return for the Zacks Transportation - Airline industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2024, Alaska Air reported EPS of $2.25 versus consensus estimate of $2.2 while it beat the consensus revenue estimate by 2.84%.
For the current fiscal year, Alaska Air is expected to post earnings of $5.93 per share on $11.82 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $7.64 per share on $14.66 billion in revenues. This represents a year-over-year change of 35.69% and 23.95%, respectively.
Valuation Metrics
Alaska Air may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Alaska Air has a Value Score of A. The stock's Growth and Momentum Scores are C and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 11.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 9.2X. On a trailing cash flow basis, the stock currently trades at 8.4X versus its peer group's average of 6.6X. Additionally, the stock has a PEG ratio of 0.67. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Alaska Air currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Alaska Air meets the list of requirements. Thus, it seems as though Alaska Air shares could still be poised for more gains ahead.
How Does ALK Stack Up to the Competition?
Shares of ALK have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Sun Country Airlines Holdings, Inc. (SNCY - Free Report) . SNCY has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of F, and a Momentum Score of B.
Earnings were strong last quarter. Sun Country Airlines Holdings, Inc. beat our consensus estimate by 100%, and for the current fiscal year, SNCY is expected to post earnings of $2.01 per share on revenue of $1.07 billion.
Shares of Sun Country Airlines Holdings, Inc. have gained 8.3% over the past month, and currently trade at a forward P/E of 8.04X and a P/CF of 5.17X.
The Transportation - Airline industry is in the top 18% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ALK and SNCY, even beyond their own solid fundamental situation.
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Alaska Air Group, Inc. (ALK) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Alaska Air Group (ALK - Free Report) ? Shares have been on the move with the stock up 9% over the past month. The stock hit a new 52-week high of $69.1 in the previous session. Alaska Air Group has gained 5.3% since the start of the year compared to the -3.7% move for the Zacks Transportation sector and the 35.7% return for the Zacks Transportation - Airline industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2024, Alaska Air reported EPS of $2.25 versus consensus estimate of $2.2 while it beat the consensus revenue estimate by 2.84%.
For the current fiscal year, Alaska Air is expected to post earnings of $5.93 per share on $11.82 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $7.64 per share on $14.66 billion in revenues. This represents a year-over-year change of 35.69% and 23.95%, respectively.
Valuation Metrics
Alaska Air may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Alaska Air has a Value Score of A. The stock's Growth and Momentum Scores are C and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 11.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 9.2X. On a trailing cash flow basis, the stock currently trades at 8.4X versus its peer group's average of 6.6X. Additionally, the stock has a PEG ratio of 0.67. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Alaska Air currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Alaska Air meets the list of requirements. Thus, it seems as though Alaska Air shares could still be poised for more gains ahead.
How Does ALK Stack Up to the Competition?
Shares of ALK have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Sun Country Airlines Holdings, Inc. (SNCY - Free Report) . SNCY has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of F, and a Momentum Score of B.
Earnings were strong last quarter. Sun Country Airlines Holdings, Inc. beat our consensus estimate by 100%, and for the current fiscal year, SNCY is expected to post earnings of $2.01 per share on revenue of $1.07 billion.
Shares of Sun Country Airlines Holdings, Inc. have gained 8.3% over the past month, and currently trade at a forward P/E of 8.04X and a P/CF of 5.17X.
The Transportation - Airline industry is in the top 18% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ALK and SNCY, even beyond their own solid fundamental situation.