Alaska Air Group (ALK) Laps the Stock Market: Here's Why

In the latest close session, Alaska Air Group (ALK) was up +2.08% at $39.28. This change outpaced the S&P 500's 0.54% gain on the day. Meanwhile, the Dow experienced a rise of 0.66%, and the technology-dominated Nasdaq saw an increase of 0.77%.

Shares of the airline witnessed a loss of 26.72% over the previous month, trailing the performance of the Transportation sector with its loss of 9.19%, and the S&P 500's loss of 4.71%.

The upcoming earnings release of Alaska Air Group will be of great interest to investors. The company is forecasted to report an EPS of -$0.86, showcasing a 11.69% downward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $3.3 billion, showing a 5.27% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.73 per share and revenue of $15.5 billion. These totals would mark changes of +93.85% and +8.89%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Alaska Air Group. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 13.97% downward. Currently, Alaska Air Group is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, Alaska Air Group is currently trading at a Forward P/E ratio of 8.14. For comparison, its industry has an average Forward P/E of 8.57, which means Alaska Air Group is trading at a discount to the group.

Meanwhile, ALK's PEG ratio is currently 0.4. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Transportation - Airline industry held an average PEG ratio of 0.44.

The Transportation - Airline industry is part of the Transportation sector. This industry, currently bearing a Zacks Industry Rank of 65, finds itself in the top 27% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Alaska Air Group, Inc. (ALK): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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