Have you been paying attention to shares of Alaska Air Group (ALK)? Shares have been on the move with the stock up 14.5% over the past month. The stock hit a new 52-week high of $74.7 in the previous session. Alaska Air Group has gained 13.1% since the start of the year compared to the 6% move for the Zacks Transportation sector and the 14.4% return for the Zacks Transportation - Airline industry.
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 January 22, 2025, Alaska Air reported EPS of $0.97 versus consensus estimate of $0.47 while it beat the consensus revenue estimate by 0.64%.
For the current fiscal year, Alaska Air is expected to post earnings of $5.93 per share on $14.78 billion in revenues. This represents a 21.77% change in EPS on a 25.97% change in revenues. For the next fiscal year, the company is expected to earn $7.69 per share on $15.6 billion in revenues. This represents a year-over-year change of 29.58% and 5.55%, respectively.
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 has run ahead of itself.
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. Investors should consider the style scores a valuable tool that can help you to 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 C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 12.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 9.6X. On a trailing cash flow basis, the stock currently trades at 7.7X versus its peer group's average of 6.1X. 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.
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 have a bit more room to run in the near term.
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 Delta Air Lines, Inc. (DAL). DAL has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Delta Air Lines, Inc. beat our consensus estimate by 5.11%, and for the current fiscal year, DAL is expected to post earnings of $7.53 per share on revenue of $63.84 billion.
Shares of Delta Air Lines, Inc. have gained 14% over the past month, and currently trade at a forward P/E of 8.93X and a P/CF of 6.68X.
The Transportation - Airline industry is in the top 27% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ALK and DAL, even beyond their own solid fundamental situation.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
免责声明：投资有风险，本文并非投资建议，以上内容不应被视为任何金融产品的购买或出售要约、建议或邀请，作者或其他用户的任何相关讨论、评论或帖子也不应被视为此类内容。本文仅供一般参考，不考虑您的个人投资目标、财务状况或需求。TTM对信息的准确性和完整性不承担任何责任或保证，投资者应自行研究并在投资前寻求专业建议。