MeritValue

ALASKA AIR GROUP, INC.

ALKdata completeness 88%18 fiscal years on file
The thesis, from the filings

ALASKA AIR GROUP, INC. earns about 3% on invested capital, and has bought back 5% of its shares over 5 years. The applicable estimate puts fair value near $20.31 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$6.18B1$9.65B2$10.4B3$11.7B3$14.2B3
Net income$478M4$58M5$235M6$395M6$100M6
Operating cash flow$1.03B7$1.42B8$1.05B9$1.46B9$1.25B9
Capital expenditure$292M10$1.67B10$1.49B10——
Free cash flow (derived)$738M7−$253M8−$444M9——
Total debt$5.44B11$4.59B12$5.3B13$9.87B14$10.6B14
Cash & equivalents$470M15$338M16$281M17$1.2B17$627M17
Diluted shares126.8M127.9M128.7M128.4M119.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$343.38
your share of equity
Profit it earned you last year
$8.34
Free cash flow it threw off
—
Debt you’d be carrying
$885.38

10 shares is a claim on $343.38 of net worth that earned you $8.34 last year, against $885.38 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
3% avg · 5y
FY21 7%FY22 2%FY23 4%FY24 3%FY25 1%

It earned an average 3% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−5% shares · 5y

Share count is down 5% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 95% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$20.31
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$235M
  • growthAssumed0.0%
Graham Number
$25.32
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000766421-24-000012 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000766421-25-000009 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000766421-26-000010 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000766421-24-000012 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000766421-25-000009 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000766421-26-000010 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000766421-24-000012 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000766421-25-000009 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000766421-26-000010 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000766421-24-000012 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2021-12-31 · accession 0000766421-23-000009 (LongTermDebtNoncurrent)
  12. 10-K · period ending 2022-12-31 · accession 0000766421-24-000012 (LongTermDebtNoncurrent)
  13. 10-K · period ending 2023-12-31 · accession 0000766421-25-000009 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2024-12-31 · accession 0000766421-26-000010 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2021-12-31 · accession 0000766421-24-000012 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2022-12-31 · accession 0000766421-25-000009 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2023-12-31 · accession 0000766421-26-000010 (CashAndCashEquivalentsAtCarryingValue)