Southwest Airlines Stock Current Valuation
LUV Stock | USD 29.19 0.08 0.27% |
Valuation analysis of Southwest Airlines helps investors to measure Southwest Airlines' intrinsic value by examining its available valuation indicators, including the cash flow records, the balance sheet account changes and income statement patterns. Enterprise Value Multiple is likely to climb to 8.29 in 2024. Fundamental drivers impacting Southwest Airlines' valuation include:
Price Book 1.6564 | Enterprise Value 15.1 B | Enterprise Value Ebitda 6.3332 | Price Sales 0.6675 | Forward PE 19.8413 |
Undervalued
Today
Please note that Southwest Airlines' price fluctuation is very steady at this time. Calculation of the real value of Southwest Airlines is based on 3 months time horizon. Increasing Southwest Airlines' time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Southwest Airlines is useful when determining the fair value of the Southwest stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Southwest Airlines. Since Southwest Airlines is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Southwest Stock. However, Southwest Airlines' intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value. Historical | Market 29.19 | Real 30.43 | Target 30.77 | Hype 29.19 | Naive 30.88 |
The real value of Southwest Stock, also known as its intrinsic value, is the underlying worth of Southwest Airlines Company, which is reflected in its stock price. It is based on Southwest Airlines' financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Southwest Airlines' stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Southwest Airlines' stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
Estimating the potential upside or downside of Southwest Airlines helps investors to forecast how Southwest stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Southwest Airlines more accurately as focusing exclusively on Southwest Airlines' fundamentals will not take into account other important factors: Southwest Current Valuation Analysis
Southwest Airlines' Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.
More About Current Valuation | All Equity Analysis
2021 | 2022 | 2023 | 2024 (projected) | Short and Long Term Debt Total | 12.3B | 9.4B | 9.2B | 9.7B | Total Assets | 36.3B | 35.4B | 36.5B | 38.3B |
Enterprise Value | = | Market Cap + Debt | - | Cash |
Current Southwest Airlines Current Valuation | 15.14 B |
Most of Southwest Airlines' fundamental indicators, such as Current Valuation, are part of a valuation analysis module that helps investors searching for stocks that are currently trading at higher or lower prices than their real value. If the real value is higher than the market price, Southwest Airlines is considered to be undervalued, and we provide a buy recommendation. Otherwise, we render a sell signal.
Southwest Current Valuation Driver Correlations
Understanding the fundamental principles of building solid financial models for Southwest Airlines is extremely important. It helps to project a fair market value of Southwest Stock properly, considering its historical fundamentals such as Current Valuation. Since Southwest Airlines' main accounts across its financial reports are all linked and dependent on each other, it is essential to analyze all possible correlations between related accounts. However, instead of reviewing all of Southwest Airlines' historical financial statements, investors can examine the correlated drivers to determine its overall health. This can be effectively done using a conventional correlation matrix of Southwest Airlines' interrelated accounts and indicators.
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Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
Competition |
In accordance with the recently published financial statements, Southwest Airlines has a Current Valuation of 15.14 B. This is 107.93% higher than that of the Passenger Airlines sector and 5.39% lower than that of the Industrials industry. The current valuation for all United States stocks is 8.91% higher than that of the company.
Southwest Current Valuation Peer Comparison
Stock peer comparison is one of the most widely used and accepted methods of equity analyses. It analyses Southwest Airlines' direct or indirect competition against its Current Valuation to detect undervalued stocks with similar characteristics or determine the stocks which would be a good addition to a portfolio. Peer analysis of Southwest Airlines could also be used in its relative valuation, which is a method of valuing Southwest Airlines by comparing valuation metrics of similar companies.Southwest Airlines is currently under evaluation in current valuation category among related companies.
Southwest Airlines ESG Sustainability
Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Southwest Airlines' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Southwest Airlines' managers, analysts, and investors.Environment Score | Governance Score | Social Score |
Southwest Fundamentals
Return On Equity | 0.0439 | ||||
Return On Asset | 0.0153 | ||||
Profit Margin | 0.02 % | ||||
Operating Margin | 0.04 % | ||||
Current Valuation | 15.14 B | ||||
Shares Outstanding | 596.67 M | ||||
Shares Owned By Insiders | 0.42 % | ||||
Shares Owned By Institutions | 81.98 % | ||||
Number Of Shares Shorted | 17.69 M | ||||
Price To Earning | 29.96 X | ||||
Price To Book | 1.66 X | ||||
Price To Sales | 0.67 X | ||||
Revenue | 26.09 B | ||||
Gross Profit | 5.98 B | ||||
EBITDA | 2.33 B | ||||
Net Income | 465 M | ||||
Cash And Equivalents | 9.49 B | ||||
Cash Per Share | 23.03 X | ||||
Total Debt | 9.2 B | ||||
Debt To Equity | 0.93 % | ||||
Current Ratio | 1.58 X | ||||
Book Value Per Share | 17.63 X | ||||
Cash Flow From Operations | 3.16 B | ||||
Short Ratio | 1.99 X | ||||
Earnings Per Share | 0.76 X | ||||
Price To Earnings To Growth | 0.57 X | ||||
Target Price | 31.27 | ||||
Number Of Employees | 74.81 K | ||||
Beta | 1.16 | ||||
Market Capitalization | 17.42 B | ||||
Total Asset | 36.49 B | ||||
Retained Earnings | 16.3 B | ||||
Working Capital | 1.7 B | ||||
Current Asset | 2.23 B | ||||
Current Liabilities | 1.43 B | ||||
Z Score | 2.74 | ||||
Annual Yield | 0.02 % | ||||
Five Year Return | 1.03 % | ||||
Net Asset | 36.49 B | ||||
Last Dividend Paid | 0.72 |
About Southwest Airlines Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze Southwest Airlines's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Southwest Airlines using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Southwest Airlines based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.Southwest Airlines Co. operates as a passenger airline company that provide scheduled air transportation services in the United States and near-international markets. The company was incorporated in 1967 and is headquartered in Dallas, Texas. Southwest Airlines operates under Airlines classification in the United States and is traded on New York Stock Exchange. It employs 64123 people.
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When running Southwest Airlines' price analysis, check to measure Southwest Airlines' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Southwest Airlines is operating at the current time. Most of Southwest Airlines' value examination focuses on studying past and present price action to predict the probability of Southwest Airlines' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Southwest Airlines' price. Additionally, you may evaluate how the addition of Southwest Airlines to your portfolios can decrease your overall portfolio volatility.
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Is Southwest Airlines' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Southwest Airlines. If investors know Southwest will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Southwest Airlines listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.30) | Dividend Share 0.72 | Earnings Share 0.76 | Revenue Per Share 43.85 | Quarterly Revenue Growth 0.105 |
The market value of Southwest Airlines is measured differently than its book value, which is the value of Southwest that is recorded on the company's balance sheet. Investors also form their own opinion of Southwest Airlines' value that differs from its market value or its book value, called intrinsic value, which is Southwest Airlines' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Southwest Airlines' market value can be influenced by many factors that don't directly affect Southwest Airlines' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Southwest Airlines' value and its price as these two are different measures arrived at by different means. Investors typically determine if Southwest Airlines is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Southwest Airlines' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.