Is Alaska Air Group, Inc. overvalued or undervalued?

As of 23 April 2025, the valuation grade for Alaska Air Group, Inc. has moved from expensive to very expensive, indicating a significant shift in perception regarding its valuation. The company is currently considered overvalued based on its financial metrics. Key ratios include a P/E ratio of 11, an EV to EBITDA ratio of 6.06, and a PEG ratio of 0.78, which suggest that despite a relatively low P/E, the overall valuation remains high compared to its peers.
In comparison to its peers, Alaska Air Group's P/E ratio is lower than that of SkyWest, Inc. at 19.09 but higher than Copa Holdings SA, which has a P/E of 7.63, indicating a disparity in valuation within the industry. Additionally, Alaska's EV to EBITDA ratio of 6.06 is less favorable compared to SkyWest's 9.66. The company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -26.29% compared to the index's 2.44%, reinforcing the notion that the stock may be overvalued in the current market environment.