Alaska Air Intrinsic Value Calculation – ALASKA AIR Reports Second Quarter Financial Results for Fiscal Year 2023
July 27, 2023
🌥️Earnings Overview
On June 30, 2023, ALASKA AIR ($NYSE:ALK) reported its financial results for the second quarter of the fiscal year ending July 25, 2023. For the quarter, total revenue amounted to USD 2838.0 million, a 6.8% growth from last year. Furthermore, the net income was USD 240.0 million, signifying a 72.7% increase on a year-over-year basis.
Share Price
The report showed a drop of 9.7% from the previous closing price of 53.3. ALASKA AIR stock opened at $50.4 and closed at $48.2, indicating the financial strain the company is currently facing. Although the company is continuing to work hard to reduce its debts and improve its cashflow, the results of this quarter have not been promising. The financial report indicated that due to the pandemic and other economic downturns, ALASKA AIR has been hit hard over the past few months. With fewer people travelling and a decrease in business demand, the company has had to cut costs and reduce expenses in order to stay afloat. Despite this, ALASKA AIR is continuing to invest in their long-term strategies such as increasing their fleet size and expanding into new markets. In order to turn things around, ALASKA AIR has implemented a number of cost-cutting measures, such as reducing their workforce and cutting back on flights. They are also focusing on increasing their customer loyalty programs and digital marketing initiatives in order to better connect with their customers and remain competitive in the industry.
However, the company is continuing to focus on their long-term strategies in order to reduce their debt and improve their cashflow. With the right initiatives in place, ALASKA AIR may be able to turn their financial results around and ensure future success. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Alaska Air. More…
| Total Revenues | Net Income | Net Margin |
| 10.34k | 160 | 5.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Alaska Air. More…
| Operations | Investing | Financing |
| 1.01k | -976 | -284 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Alaska Air. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 14.83k | 10.88k | 30.89 |
Key Ratios Snapshot
Some of the financial key ratios for Alaska Air are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.7% | 40.0% | 3.0% |
| FCF Margin | ROE | ROA |
| -6.4% | 5.1% | 1.3% |
Analysis – Alaska Air Intrinsic Value Calculation
At GoodWhale, we have conducted an analysis of ALASKA AIR‘s fundamentals and provided an overview of our findings. According to our proprietary Valuation Line, the fair value of ALASKA AIR stock is estimated at around $90.1. However, the current market price of the stock is $48.2, indicating that it is trading at a 46.5% discount. This presents investors with an attractive opportunity to buy the stock at a discounted rate. More…
Peers
The airline industry is a fiercely competitive market. The top four airlines in the United States are Alaska Air Group Inc, United Airlines Holdings Inc, American Airlines Group Inc, and Spirit Airlines Inc. All four of these airlines are constantly vying for market share and trying to outdo each other.
Alaska Air Group Inc is the seventh largest airline in the United States. The company was founded in 1932 and is headquartered in Seattle, Washington. Alaska Air Group Inc operates a fleet of Boeing and Airbus aircraft and serves more than 100 destinations across the United States, Canada, and Mexico.
United Airlines Holdings Inc is the world’s largest airline. The company was founded in 1926 and is headquartered in Chicago, Illinois. United Airlines Holdings Inc operates a fleet of Boeing and Airbus aircraft and serves more than 370 destinations across six continents.
American Airlines Group Inc is the world’s largest airline. The company was founded in 1930 and is headquartered in Fort Worth, Texas. American Airlines Group Inc operates a fleet of Boeing and Airbus aircraft and serves more than 550 destinations across more than 40 countries.
Spirit Airlines Inc is an ultra-low-cost carrier. The company was founded in 1980 and is headquartered in Miramar, Florida. Spirit Airlines Inc operates a fleet of Airbus aircraft and serves more than 60 destinations across the United States, Caribbean, and Latin America.
– United Airlines Holdings Inc ($NASDAQ:UAL)
United Airlines Holdings Inc is an American airline headquartered in Chicago, Illinois. It is the world’s third-largest airline when measured by revenue, after American Airlines and Delta Air Lines. United operates a large domestic and international route network, with an extensive presence in the Asia-Pacific region. The airline has a significant presence in the United hub of Los Angeles.
– American Airlines Group Inc ($NASDAQ:AAL)
American Airlines Group Inc has a market cap of 8.58B as of 2022, a Return on Equity of 5.3%. The company has been in operation since 1930 and is one of the largest airlines in the world. American Airlines Group Inc provides passenger and cargo transportation services across the globe. The company has a wide network of destinations and offers a variety of services to its passengers. American Airlines Group Inc is a publicly traded company listed on the New York Stock Exchange.
– Spirit Airlines Inc ($NYSE:SAVE)
Spirit Airlines Inc is an airline company that has a market cap of 2.13B as of 2022. The company has a return on equity of -10.47%. Spirit Airlines operates in the ultra-low-cost carrier segment of the US airline industry. The company provides air transportation for passengers and cargo. Its routes span the US, Latin America, and the Caribbean.
Summary
Investors have been analyzing ALASKA AIR‘s financial results for the second quarter of its fiscal year 2023, ending on July 25 2023. The airline reported a total revenue of USD 2838.0 million and a net income of USD 240.0 million, which were both higher year-over-year growth. Despite the positive financial figures, the stock price still decreased the same day.
This could be due to market expectations that were not met or other events that had an adverse effect on the company’s financial performance. In any case, ALASKA AIR remains a viable investment opportunity with potential for future growth.
