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
29.19
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.
30.43
Real Value
33.19
Upside
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:
Earnings
Estimates (0)
LowProjectedHigh
-0.5-0.310.03
Details
Hype
Prediction
LowEstimatedHigh
26.4329.1931.95
Details
Potential
Annual Dividend
LowForecastedHigh
0.350.360.37
Details
21 Analysts
Consensus
LowTarget PriceHigh
28.0030.7734.15
Details

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.
 2021 2022 2023 2024 (projected)
Short and Long Term Debt Total12.3B9.4B9.2B9.7B
Total Assets36.3B35.4B36.5B38.3B

Enterprise Value

 = 

Market Cap + Debt

-

Cash

More About Current Valuation | All Equity Analysis

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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Click cells to compare fundamentals
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

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 determining whether Southwest Airlines is a strong investment it is important to analyze Southwest Airlines' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Southwest Airlines' future performance. For an informed investment choice regarding Southwest Stock, refer to the following important reports:
Check out Southwest Airlines Piotroski F Score and Southwest Airlines Altman Z Score analysis.
For more information on how to buy Southwest Stock please use our How to Invest in Southwest Airlines guide.
You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.

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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.