Alaska Air may still be significantly undervalued

Despite putting up spectacular business metrics and strong year-over-year top-line revenue growth of 7.85%, the case can be made that Alaska Air is still a value play. As compared to peer regional airlines, the company still appears to trade at a healthy or even a steep discount. According to Capital IQ, Alaska Air had a trailing P/E of 13.53 (ttm), with an operating margin of 12.63% (ttm) and a ROE of 24.35% (ttm) as of market close on Mar. 14. In comparison, JetBlue, (NASDAQ: JBLU) another leading regional and a darling of the New York media, posted a trailing P/E of 17.20, an operating margin of 7.19% and an ROE of just 7.02% for the same time period. Southwest Airlines (NYSE: LUV), the gold standard of the industry, boasts even richer valuations than JetBlue, with a trailing P/E of 22.41, an operating margin of 4.72% and a ROE of 6.07%.