Alaska Air Group Inc (ALK, Financial), with a market capitalization of $5.54 billion, has experienced a notable fluctuation in its stock price over recent periods. The current price stands at $44.07, reflecting a 2.81% gain over the past week. However, looking at a broader timeframe, the stock has seen a 20.08% loss over the past three months. When compared to the GF Value of $60.21, down from a past GF Value of $73.74, Alaska Air Group is currently considered modestly undervalued, a shift from its previous assessment as a possible value trap where investors were advised to think twice before investing.
Introduction to Alaska Air Group Inc
Alaska Air Group Inc operates within the transportation industry, managing two airlines, Alaska and Horizon, across three operating segments. The Mainline segment provides scheduled air transportation for passengers and cargo, while the Regional segment offers shorter distance passenger transportation under capacity purchase agreements. The Horizon segment sells capacity to Alaska under a similar agreement. The company generates revenue from passenger tickets, ancillary services, and its Mileage Plan. 
Assessing Profitability
Alaska Air Group's Profitability Rank stands at 7/10, indicating a strong position within the industry. The company's operating margin is 8.03%, which is better than 51.18% of its industry peers. Additionally, the Return on Equity (ROE) is 5.98%, surpassing 39.24% of competitors, while the Return on Assets (ROA) at 1.61% is better than 30.27% of industry peers. The Return on Invested Capital (ROIC) is 4.15%, outperforming 45.04% of the industry. With 9 years of profitability over the past decade, Alaska Air Group demonstrates a consistent financial performance. 
Growth Trajectory of Alaska Air Group
The company's Growth Rank is also impressive at 7/10. The 3-Year Revenue Growth Rate per Share stands at a remarkable 41.00%, which is better than 91.68% of industry peers. The 5-Year Revenue Growth Rate per Share is 5.00%, surpassing 55.03% of competitors. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 5.10%, which is more favorable than 71.78% of industry peers. The EPS without NRI Growth Rate (Future 3Y To 5Y Est) is expected to be 13.38%, outperforming 61.63% of competitors. These growth metrics indicate a robust trajectory for Alaska Air Group. 
Notable Shareholders in Alaska Air Group
Among the notable shareholders of Alaska Air Group, PRIMECAP Management (Trades, Portfolio) leads with a 3.06% shareholding, amounting to 3,862,547 shares. Diamond Hill Capital (Trades, Portfolio) follows with a 0.93% stake, holding 1,171,650 shares. Steven Cohen (Trades, Portfolio) also has a significant investment, with a 0.59% shareholding through 739,350 shares. These holders reflect the confidence of seasoned investors in the company's potential.
Competitive Landscape
Alaska Air Group operates in a competitive industry, with Copa Holdings SA (CPA, Financial) having a market cap of $4.43 billion, SkyWest Inc (SKYW, Financial) at $2.81 billion, and JetBlue Airways Corp (JBLU, Financial) at $2.43 billion. These competitors are close in market capitalization, indicating a tight race within the transportation sector.
Conclusion
In summary, Alaska Air Group Inc's stock performance has been a mixed bag with recent gains overshadowed by a three-month decline. However, the company's current valuation suggests it is modestly undervalued, presenting a potential opportunity for investors. The company's profitability and growth prospects are strong, with a solid track record and promising future estimates. When considering the competitive landscape, Alaska Air Group holds its own, with a market cap that leads among its closest competitors. For value investors seeking opportunities within the transportation industry, Alaska Air Group Inc warrants a closer look.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
