SOUTHWEST AIRLINES CO (LUV)
US8447411088 - Common Stock
Overall LUV gets a fundamental rating of 3 out of 10. We evaluated LUV against 24 industry peers in the Passenger Airlines industry. Both the profitability and financial health of LUV have multiple concerns. LUV is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
LUV had positive earnings in the past year.
In the past year LUV had a positive cash flow from operations.
LUV had positive earnings in 4 of the past 5 years.
Of the past 5 years LUV 4 years had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of -0.14%, LUV is in line with its industry, outperforming 54.17% of the companies in the same industry.
The Return On Equity of LUV (-0.47%) is better than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.14% | ||
| ROE | -0.47% | ||
| ROIC | N/A |
ROA(3y)1.83%
ROA(5y)1.1%
ROE(3y)6.28%
ROE(5y)1.52%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
In the last couple of years the Profit Margin of LUV has declined.
In the last couple of years the Operating Margin of LUV has declined.
Looking at the Gross Margin, with a value of 70.11%, LUV belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
LUV's Gross Margin has been stable in the last couple of years.
The Profit Margin and Operating Margin are not available for LUV so they could not be analyzed.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 70.11% |
OM growth 3YN/A
OM growth 5Y-38.55%
PM growth 3YN/A
PM growth 5Y-30.79%
GM growth 3Y1.72%
GM growth 5Y-0.81%
2. Health
2.1 Basic Checks
LUV does not have a ROIC to compare to the WACC, probably because it is not profitable.
LUV has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, LUV has more shares outstanding
LUV has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 1.83 indicates that LUV is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of LUV (1.83) is better than 79.17% of its industry peers.
LUV has a Debt/Equity ratio of 0.49. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.49, LUV belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.83 |
ROIC/WACCN/A
WACC7.36%
2.3 Liquidity
A Current Ratio of 0.88 indicates that LUV may have some problems paying its short term obligations.
LUV's Current ratio of 0.88 is fine compared to the rest of the industry. LUV outperforms 75.00% of its industry peers.
LUV has a Quick Ratio of 0.88. This is a bad value and indicates that LUV is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.83, LUV is in the better half of the industry, outperforming 70.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
LUV shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -9.76%.
Measured over the past years, LUV shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -18.10% on average per year.
LUV shows a small growth in Revenue. In the last year, the Revenue has grown by 7.61%.
Measured over the past years, LUV shows a small growth in Revenue. The Revenue has been growing by 3.50% on average per year.
EPS 1Y (TTM)-9.76%
EPS 3YN/A
EPS 5Y-18.1%
EPS Q2Q%-60.53%
Revenue 1Y (TTM)7.61%
Revenue growth 3Y42.34%
Revenue growth 5Y3.5%
Sales Q2Q%5.29%
3.2 Future
LUV is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.04% yearly.
Based on estimates for the next years, LUV will show a small growth in Revenue. The Revenue will grow by 6.15% on average per year.
EPS Next Y-52.33%
EPS Next 2Y1.2%
EPS Next 3Y13.77%
EPS Next 5Y16.04%
Revenue Next Year5.43%
Revenue Next 2Y5.3%
Revenue Next 3Y5.21%
Revenue Next 5Y6.15%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 42.96 indicates a quite expensive valuation of LUV.
LUV's Price/Earnings ratio is a bit cheaper when compared to the industry. LUV is cheaper than 62.50% of the companies in the same industry.
LUV's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.96.
LUV is valuated rather expensively with a Price/Forward Earnings ratio of 19.77.
LUV's Price/Forward Earnings ratio is in line with the industry average.
LUV is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.96 | ||
| Fwd PE | 19.77 |
4.2 Price Multiples
LUV's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.9 |
4.3 Compensation for Growth
A more expensive valuation may be justified as LUV's earnings are expected to grow with 13.77% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y1.2%
EPS Next 3Y13.77%
5. Dividend
5.1 Amount
LUV has a Yearly Dividend Yield of 2.22%.
Compared to an average industry Dividend Yield of 7.70, LUV pays a better dividend. On top of this LUV pays more dividend than 83.33% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, LUV has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
5.2 History
The dividend of LUV has a limited annual growth rate of 4.34%.
LUV has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.34%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
LUV has negative earnings and hence a negative payout ratio. The dividend may be in danger.
LUV's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-879.59%
EPS Next 2Y1.2%
EPS Next 3Y13.77%
SOUTHWEST AIRLINES CO
NYSE:LUV (11/21/2024, 5:28:54 PM)
After market: 31.79 0 (0%)31.79
+0.02 (+0.06%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap19.07B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.96 | ||
| Fwd PE | 19.77 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.14% | ||
| ROE | -0.47% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 70.11% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.79
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.83 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-9.76%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y-52.33%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.61%
Revenue growth 3Y42.34%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y