Is Alaska Air Group, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Alaska Air Group, Inc. has moved from attractive to very expensive, indicating a shift towards overvaluation. The company is currently considered overvalued based on its P/E ratio of 11, which is significantly higher than the peer average of 7.01 for American Airlines Group, Inc. and 8.04 for Copa Holdings SA, as well as its EV to EBITDA ratio of 6.06 compared to the industry benchmarks. Additionally, the PEG ratio stands at 0.78, suggesting that the stock may not be priced appropriately relative to its growth expectations.
In terms of performance, Alaska Air Group has underperformed against the S&P 500, with a year-to-date return of -26.93% compared to the S&P 500's 13.30%. Over the past three years, the company's return of 13.92% pales in comparison to the S&P 500's impressive 81.19%, reinforcing the notion that the stock may be overvalued in the current market context.