Alaska Air Group Inc. Common Stock (ALK) fair value
Industrials · Airlines · NYSE · United States
$34.40-2.77%
Market cap $3.9BNext earnings 2026-10-20Updated Oct 23, 2026
Our verdict
Trades 29% above our fair value
Price
$34.40
Model fair valueConfidence: medium
$26.60
Only one of our models could value this stock with confidence, so use it as a guide.
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Valued as a cyclical company: Discounted cash flow and Graham number.
ACCE opinionAlaska Air Group Inc. Common Stock (ALK)
Fair value
Not available
ACCE price target
$36.00
Rating
Not rated
Horizon
12 months
ACCE price target published on 24 Oct 2026, 03:20 CEST; previously $38.00 since 18 Oct 2026, 00:00 CEST.
Price used: $34.40 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow and Graham number.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
ACCE score
33
out of 100
Analysts
94% buy
16 covering
P/E
0.0x
forward 7.4x
1-year return
-26.2%
Dividend yield
0.00%
Alaska Air Group Inc. Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
Alaska Air Group flies passengers across the US West Coast, Alaska and Hawaii through Alaska Airlines and Hawaiian Airlines, the latter giving it a long-haul Pacific franchise that few domestic carriers can match. Its moat is geographic: Seattle, Portland, Anchorage and Honolulu are hubs where it holds dominant gate and slot positions, and Hawaiian adds a Honolulu-to-Asia and South Pacific network. The near-term story is integration and cost: the Hawaiian deal is still being absorbed, and the recovery in unit revenue has to outrun fuel and labor costs for the earnings power to show up. Revenue is growing 14.4%, but the 2.5% operating margin and negative 10.4% ROE show how thin the profit cushion is, so the 10.6x forward earnings multiple only works if margins rebuild. The stock is worth a deeper look if you believe integration synergies and the premium Hawaii and transpacific routes can lift margins toward pre-merger levels; if you don't, the score of 33/100 reflects that skepticism.
⚠ Investor warnings · 4 flagsAI-assisted·How I use AI
high
Free cash flow deeply negative
Free cash flow of -$339M against a $3.9B market cap is a serious drain. Debt/Equity of 1.67 leaves little room to absorb further cash burn.
high
Earnings collapsing despite revenue growth
Revenue grew 14.4% year over year, but earnings fell 68.3%. Net margin is -2.6% and operating margin only 2.5%, so growth is not reaching the bottom line.
moderate
Heavy short interest
Short interest sits at 12.2%, meaning a meaningful share of the float is betting on further decline. Position sizing should reflect that volatility.
moderate
Score drifting lower
The ACCE score slipped from 37 to 34 over 90 days, with quality at 21 and momentum at 17. The trend is weakening, not stabilising.
AI research notes
AI-assisted·How I use AIWritten Oct 23, 2026 · figures from 2026-09-30 · prices to Oct 23, 2026
Why it could do well
Analysts are strongly positive, with 94% (15 of 16) rating the stock Buy or Strong Buy.
The stock trades at a forward P/E of 11.6x, a low multiple for a company still growing revenue.
The company cut its diluted share count by 8.6% last fiscal year, lifting each remaining share's claim on earnings.
Why it could disappoint
Free cash flow over the last 12 months was negative at -$339M, so the business is consuming cash rather than generating it.
Net margin was -2.6% and return on equity -10.4%, meaning shareholders are losing money on their capital.
Debt to equity of 1.67 leaves the balance sheet heavily leveraged, which magnifies losses if trading stays weak.
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Walk me through this stock
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Valuation
INVESTOR
Where ALK's valuation models land
Price
$34.40
Model fair valueConfidence: medium
$26.60
Model
Fair value
Upside
Discounted cash flow
Graham number
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Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
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+Conviction breakdown and growth / value / quality / momentum scores