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Alaska Air Group (ALK) Stock Drops Despite Market Gains: Important Facts to Note

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Alaska Air Group (ALK - Free Report) closed the most recent trading day at $52.83, moving -0.04% from the previous trading session. The stock trailed the S&P 500, which registered a daily gain of 0.08%. Meanwhile, the Dow experienced a rise of 0.08%, and the technology-dominated Nasdaq saw an increase of 0.52%.

Shares of the airline have depreciated by 29.87% over the course of the past month, underperforming the Transportation sector's loss of 5.71% and the S&P 500's loss of 7.33%.

The upcoming earnings release of Alaska Air Group will be of great interest to investors. The company is expected to report EPS of -$0.64, up 30.43% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $3.22 billion, showing a 44.15% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $5.96 per share and a revenue of $14.74 billion, demonstrating changes of +22.38% and +25.63%, respectively, from the preceding year.

Investors should also take note of any recent adjustments to analyst estimates for Alaska Air Group. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 1.02% lower. At present, Alaska Air Group boasts a Zacks Rank of #3 (Hold).

With respect to valuation, Alaska Air Group is currently being traded at a Forward P/E ratio of 8.86. This signifies a premium in comparison to the average Forward P/E of 8.47 for its industry.

Meanwhile, ALK's PEG ratio is currently 0.33. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Transportation - Airline industry had an average PEG ratio of 0.66.

The Transportation - Airline industry is part of the Transportation sector. Currently, this industry holds a Zacks Industry Rank of 60, positioning it in the top 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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