Value
7.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 2.6 |
| Fwd P/E | 9.1 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 11.4x
- ▸PEG: 0.06
- ▸Attractively valued
ALK · Why this verdict
Why Alaska Air Group (ALK) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Alaska Air trades at about 11x forward earnings with 31% upside to the analyst target, but cash burn, weak quality and a confirmed downtrend make it a speculative recovery.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Forward P/E of 11.0x and a PEG of 0.06 mark the shares as attractively valued against growth. Valuation breakdown | Forward earnings estimates hold so the multiple stays near 11x or lower. | ↓Deteriorating |
| CounterAirline earnings are volatile and a cheap multiple may simply price in a coming earnings decline. | ||
Free cash flow is negative at about 3% of revenue and quality scores 1.3 versus a 4.0 floor, with no competitive moat. Quality breakdown | Free cash flow turns positive as a share of revenue within 12 months. | →Stable |
| CounterCapital-intensive fleet spending can keep free cash flow negative even if operations improve. | ||
Earnings split two beats and two misses over four quarters, and the latest quarter missed by about 211%. Earnings | EPS returns to beats at the January 2027 report. | →Stable |
| CounterLarge swings in surprise show forecasts are unreliable and the recent miss may signal deteriorating margins. | ||
The analyst target of $46.69 sits about 30.7% above the $35.71 price, with a 3.1 reward-to-risk ratio. Targets | Price closes part of the gap to the target as earnings recover. | ↓Deteriorating |
| CounterTargets lag fundamentals, and the stock sits 41% below its high in a downtrend with falling volume support. | ||
The stock is below its 200-day average with a falling slope of 4.0% per 30 days and short interest of 12%. Momentum breakdown | Price reclaims the 200-day average within 12 months. | ↑Improving |
| CounterRestructuring news and an officer change add near-term uncertainty that can extend the decline. | ||
Forward P/E of 11.0x and a PEG of 0.06 mark the shares as attractively valued against growth.
↓DeterioratingValuation breakdown
- Expectation
- Forward earnings estimates hold so the multiple stays near 11x or lower.
CounterAirline earnings are volatile and a cheap multiple may simply price in a coming earnings decline.
Free cash flow is negative at about 3% of revenue and quality scores 1.3 versus a 4.0 floor, with no competitive moat.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive as a share of revenue within 12 months.
CounterCapital-intensive fleet spending can keep free cash flow negative even if operations improve.
Earnings split two beats and two misses over four quarters, and the latest quarter missed by about 211%.
→StableEarnings
- Expectation
- EPS returns to beats at the January 2027 report.
CounterLarge swings in surprise show forecasts are unreliable and the recent miss may signal deteriorating margins.
The analyst target of $46.69 sits about 30.7% above the $35.71 price, with a 3.1 reward-to-risk ratio.
↓DeterioratingTargets
- Expectation
- Price closes part of the gap to the target as earnings recover.
CounterTargets lag fundamentals, and the stock sits 41% below its high in a downtrend with falling volume support.
The stock is below its 200-day average with a falling slope of 4.0% per 30 days and short interest of 12%.
↑ImprovingMomentum breakdown
- Expectation
- Price reclaims the 200-day average within 12 months.
CounterRestructuring news and an officer change add near-term uncertainty that can extend the decline.
Per-dimension breakdown
Quality
1.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 1.0 |
| Net margin | 0.0 |
| Current ratio | 1.8 |
| FCF quality | 0.0 |
| Moat | 4.2 |
| Piotroski F | 4.4 |
- ▸Cash-burning: FCF -3% of revenue
- ▸No competitive moat
- ▸Quality concerns
Growth
8.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.1 |
| EPS growth | 10.0 |
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 10.0 |
| OBV | 6.3 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Below 200-MA, MA slope -4.3%/30d — confirmed downtrend
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.2 |
| Analyst rating | 8.7 |
| Price target | 8.5 |
- ▸Analyst upside: 28%
Insider
5.8/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| holder change | 5.0 |
- ▸Modest insider buying — $1,001,510 (0.024% of mkt cap)
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.9 |
| quality rank | 1.4 |
| growth rank | 2.5 |
Technical
1.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.1 |
| 52w position | 3.3 |
| gap | 4.0 |
Risk (lower is worse)
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.8 |
| days to cover | 6.8 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 2.7 |
| beta | 5.3 |
| debt equity | 2.9 |
| news risk | 6.0 |
- ▸Elevated put/call: 2.41
- ▸High IV: 64%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- MOMENTUM:5.2>=4.5
- INSIDER:OK
- EARNINGS_PROXIMITY:78d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.0<1.5@spot
Warning (3)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
- DEATH_CROSS:momentum=5.2>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.03
Upside
+15.5%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 61
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.42>1.3, MCap $4.1B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's 1.0<1.5@spot outcome against Growth at 8.1 and asymmetric R:R of 1.03.
The strongest dimensions are Growth at 8.1, Value at 7.8, and Sentiment at 7.5; the weakest are Quality at 1.3, Technical at 1.8, and Peer rank at 3.1. The V9 engine flagged 1 failed gate with 3 warnings, producing an asymmetric reward-to-risk of 1.03 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Forward Valuation
Trip ifForward P/E rises above 18x on unchanged price as estimates fall.
- P2Cash Burn Weak Quality
Trip ifFree cash flow margin falls below -6% of revenue.
- P3Mixed Earnings Record
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P4Analyst Target Upside
Trip ifAnalyst upside to target falls below 10% from current 30.7%.
- P5Downtrend And Short Interest
Trip ifShort interest exceeds 20% of float.