| Snowflake Score | |
|---|---|
| Valuation | 6/6 |
| Future Growth | 5/6 |
| Past Performance | 1/6 |
| Financial Health | 5/6 |
| Dividends | 0/6 |
LUV Stock Overview
Southwest Airlines Co. operates as a passenger airline company that provide scheduled air transportation services in the United States and near-international markets.
Southwest Airlines Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$38.97 |
| 52 Week High | US$56.33 |
| 52 Week Low | US$34.36 |
| Beta | 1 |
| 1 Month Change | 1.12% |
| 3 Month Change | -9.35% |
| 1 Year Change | -23.57% |
| 3 Year Change | -19.17% |
| 5 Year Change | -26.68% |
| Change since IPO | 3,560.97% |
Recent News & Updates
Southwest Airlines Non-GAAP EPS of $1.30 beats by $0.12, revenue of $6.73B beats by $40M
Southwest Airlines press release (NYSE:LUV): Q2 Non-GAAP EPS of $1.30 beats by $0.12. Revenue of $6.73B (+67.8% Y/Y) beats by $40M. For Q3, Operating revenue compared with 2019 to be up 8% to 12%; ASMs compared with 2019 to be down ~flat. For FY2022, ASMs compared with 2019 to be down ~4% and Capital spending of ~$B. CEO comment: "As anticipated, we experienced inflationary pressures and headwinds from operating at suboptimal productivity levels in second quarter, which we expect will continue in second half 2022; however, our fuel hedge continues to provide significant protection against higher jet fuel prices. Barring significant unforeseen events and based on current trends, we expect to be solidly profitable for the remaining two quarters of this year, and for full year 2022.
Southwest Airlines amends revolving credit facility deal
Southwest Airlines (NYSE:LUV) said Thursday it amended its revolving credit facility deal with a syndicate of lenders expiring in Aug. 2023. The amendment extends the maturity to Aug. 3, 2025, updates certain provisions related to implementation of SOFR as a successor interest rate to LIBOR and certain other market changes, and amends certain other terms. The amended deal requires LUV to maintain a minimum level of liquidity of no less than $1.5B. The amount of loan commitments the collateral remain unchanged. There are no amounts outstanding under the amended deal.
Shareholder Returns
| LUV | US Airlines | US Market | |
|---|---|---|---|
| 7D | 0.5% | 0.6% | 1.2% |
| 1Y | -23.6% | -26.0% | -11.6% |
Return vs Industry: LUV exceeded the US Airlines industry which returned -26% over the past year.
Return vs Market: LUV underperformed the US Market which returned -11.6% over the past year.
Price Volatility
| LUV volatility | |
|---|---|
| LUV Average Weekly Movement | 5.8% |
| Airlines Industry Average Movement | 8.1% |
| Market Average Movement | 7.9% |
| 10% most volatile stocks in US Market | 17.0% |
| 10% least volatile stocks in US Market | 3.2% |
Stable Share Price: LUV is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: LUV's weekly volatility (6%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1967 | 62,333 | Bob Jordan | https://www.southwest.com |
Southwest Airlines Co. operates as a passenger airline company that provide scheduled air transportation services in the United States and near-international markets. As of December 31, 2021, the company operated a total fleet of 728 Boeing 737 aircrafts; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as 10 near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. It also provides inflight entertainment and connectivity services on Wi-Fi enabled aircrafts; and Rapid Rewards loyalty program that enables program members to earn points for dollars spent on Southwest base fares.
Southwest Airlines Fundamentals Summary
| LUV fundamental statistics | |
|---|---|
| Market Cap | US$23.12b |
| Earnings (TTM) | US$1.00b |
| Revenue (TTM) | US$21.15b |
23.0x
P/E Ratio1.1x
P/S RatioIs LUV overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| LUV income statement (TTM) | |
|---|---|
| Revenue | US$21.15b |
| Cost of Revenue | US$16.04b |
| Gross Profit | US$5.11b |
| Other Expenses | US$4.11b |
| Earnings | US$1.00b |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 27, 2022
| Earnings per share (EPS) | 1.69 |
| Gross Margin | 24.15% |
| Net Profit Margin | 4.75% |
| Debt/Equity Ratio | 94.8% |
How did LUV perform over the long term?
See historical performance and comparisonValuation
Is LUV undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
6/6Valuation Score 6/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for LUV?
Other financial metrics that can be useful for relative valuation.
| What is LUV's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$23.12b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 0.9x |
| Enterprise Value/EBITDA | 8x |
| PEG Ratio | 0.8x |
Price to Earnings Ratio vs Peers
How does LUV's PE Ratio compare to its peers?
| LUV PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 29.3x | ||
DAL Delta Air Lines | 36.1x | 35.2% | US$21.7b |
ALK Alaska Air Group | 28.2x | 44.0% | US$5.9b |
CPA Copa Holdings | 10.7x | 23.4% | US$2.9b |
ALGT Allegiant Travel | 42.2x | 85.1% | US$1.9b |
LUV Southwest Airlines | 23x | 30.4% | US$23.1b |
Price-To-Earnings vs Peers: LUV is good value based on its Price-To-Earnings Ratio (23x) compared to the peer average (29.3x).
Price to Earnings Ratio vs Industry
How does LUV's PE Ratio compare vs other companies in the Global Airlines Industry?
Price-To-Earnings vs Industry: LUV is good value based on its Price-To-Earnings Ratio (23x) compared to the US Airlines industry average (23.2x)
Price to Earnings Ratio vs Fair Ratio
What is LUV's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 23x |
| Fair PE Ratio | 28x |
Price-To-Earnings vs Fair Ratio: LUV is good value based on its Price-To-Earnings Ratio (23x) compared to the estimated Fair Price-To-Earnings Ratio (28x).
Share Price vs Fair Value
What is the Fair Price of LUV when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: LUV ($38.97) is trading below our estimate of fair value ($150.83)
Significantly Below Fair Value: LUV is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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Future Growth
How is Southwest Airlines forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?
Future Growth Score
5/6Future Growth Score 5/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
30.4%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: LUV's forecast earnings growth (30.4% per year) is above the savings rate (1.9%).
Earnings vs Market: LUV's earnings (30.4% per year) are forecast to grow faster than the US market (14.5% per year).
High Growth Earnings: LUV's earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: LUV's revenue (8.2% per year) is forecast to grow faster than the US market (8% per year).
High Growth Revenue: LUV's revenue (8.2% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: LUV's Return on Equity is forecast to be high in 3 years time (23.4%)
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Past Performance
How has Southwest Airlines performed over the past 5 years?
Past Performance Score
1/6Past Performance Score 1/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
-42.2%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: LUV has a large one-off gain of $380.0M impacting its June 30 2022 financial results.
Growing Profit Margin: LUV became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: LUV's earnings have declined by 42.2% per year over the past 5 years.
Accelerating Growth: LUV has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: LUV has become profitable in the last year, making it difficult to compare its past year earnings growth to the Airlines industry (7.5%).
Return on Equity
High ROE: LUV's Return on Equity (9%) is considered low.
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Financial Health
How is Southwest Airlines's financial position?
Financial Health Score
5/6Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: LUV's short term assets ($19.4B) exceed its short term liabilities ($11.7B).
Long Term Liabilities: LUV's short term assets ($19.4B) exceed its long term liabilities ($15.5B).
Debt to Equity History and Analysis
Debt Level: LUV has more cash than its total debt.
Reducing Debt: LUV's debt to equity ratio has increased from 36.6% to 94.8% over the past 5 years.
Debt Coverage: LUV's debt is well covered by operating cash flow (25.1%).
Interest Coverage: LUV's interest payments on its debt are well covered by EBIT (3.6x coverage).
Balance Sheet
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Dividend
What is Southwest Airlines's current dividend yield, its reliability and sustainability?
Dividend Score
0/6Dividend Score 0/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
0.75%
Forecast Dividend Yield
Dividend Yield vs Market
Notable Dividend: Unable to evaluate LUV's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate LUV's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if LUV's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if LUV's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: LUV is not paying a notable dividend for the US market.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as LUV has not reported any payouts.
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Management
How experienced are the management team and are they aligned to shareholders interests?
4.9yrs
Average management tenure
CEO
Bob Jordan (61 yo)
0.50
Tenure
US$3,049,336
Compensation
Mr. Robert E. Jordan, also known as Bob, has been the Chief Executive Officer and a Director of Southwest Airlines Co. since February 01, 2022. He served as an Executive Vice President of Corporate Service...
CEO Compensation Analysis
Compensation vs Market: Bob's total compensation ($USD3.05M) is below average for companies of similar size in the US market ($USD12.88M).
Compensation vs Earnings: Bob's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: LUV's management team is considered experienced (4.9 years average tenure).
Board Members
Experienced Board: LUV's board of directors are seasoned and experienced ( 13.2 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: LUV insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Southwest Airlines Co.'s employee growth, exchange listings and data sources
Key Information
- Name: Southwest Airlines Co.
- Ticker: LUV
- Exchange: NYSE
- Founded: 1967
- Industry: Airlines
- Sector: Transportation
- Implied Market Cap: US$23.123b
- Shares outstanding: 593.35m
- Website: https://www.southwest.com
Number of Employees
Location
- Southwest Airlines Co.
- PO Box 36611
- Dallas
- Texas
- 75235-1611
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/11 00:00 |
| End of Day Share Price | 2022/08/11 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.