Is Southwest Airlines Stock a Good Investment?
Southwest Airlines Investment Advice | LUV |
- Examine Southwest Airlines' financial health by looking at its balance sheet, income statement, and cash flow statement. Analyze key financial ratios, such as Price-to-Earnings (P/E), Price-to-Sales (P/S), and Price-to-Book (P/B), to determine whether the stock is fairly valued or over/undervalued.
- Research Southwest Airlines' leadership team and their track record. Good management can help Southwest Airlines navigate difficult times and make strategic decisions that benefit shareholders and increases its net worth.
- Consider the overall health of the Passenger Airlines space and any emerging trends that could impact Southwest Airlines' business and its evolving consumer preferences.
- Compare Southwest Airlines' performance and market position to its competitors. Analyze how Southwest Airlines is positioned in terms of product offerings, innovation, and market share.
- Check if Southwest Airlines pays a dividend and its dividend yield and payout ratio.
- Review what financial analysts are saying about Southwest Airlines' stock and their price targets. However, remember that analysts' opinions can vary, and their predictions may not always be accurate.
It's important to note that investing in Southwest Airlines stock, carries risks, and you should carefully consider your investment goals and risk tolerance before making any investment decisions. Also, remember that it's important for investors to have a long-term perspective and a well-diversified portfolio to manage the impact of stock market volatility on their investments. Below is a detailed guide on how to decide if Southwest Airlines is a good investment.
Sell | Buy |
Strong Hold
Market Performance | Very Weak | Details | |
Volatility | Very steady | Details | |
Hype Condition | Low key | Details | |
Current Valuation | Undervalued | Details | |
Odds Of Distress | Low | Details | |
Economic Sensitivity | Barely shadows the market | Details | |
Investor Sentiment | Impartial | Details | |
Analyst Consensus | Hold | Details | |
Financial Strenth (F Score) | Strong | Details | |
Financial Leverage | Not Rated | Details | |
Reporting Quality (M-Score) | Unlikely Manipulator | Details |
Examine Southwest Airlines Stock
Researching Southwest Airlines' stock involves analyzing various aspects of the company and its industry to make an informed investment decision. The key areas to focus on are fundamentals, business model and competitive advantage. It is also important to analyze trends in revenue, net income, and cash flow, as well as key financial ratios, such as price-to-earnings (P/E), price-to-sales (P/S), and debt-to-equity (D/E). About 93.0% of the company shares are owned by institutional investors. The company has price-to-book ratio of 1.73. Typically companies with comparable Price to Book (P/B) are able to outperform the market in the long run. Southwest Airlines has Price/Earnings To Growth (PEG) ratio of 0.42. The entity last dividend was issued on the 12th of March 2025. The firm had 3:2 split on the 16th of February 2001.
To determine if Southwest Airlines is a good investment, evaluating the company's potential for future growth is also very important. This may include expanding into new markets, launching new products or services, or improving operational efficiency. Companies with strong growth prospects can be more attractive investments. This aspect of the research should be conducted in the context of the overall market and industry in which the company operates and should include an analysis of growth potential, competitive landscape, and any regulatory or economic factors that could impact the business. Some of the essential points regarding Southwest Airlines' research are outlined below:
| Southwest Airlines generated a negative expected return over the last 90 days | |
| Southwest Airlines has a strong financial position based on the latest SEC filings | |
| Over 93.0% of the company shares are owned by institutional investors | |
| On 16th of January 2025 Southwest Airlines paid $ 0.18 per share dividend to its current shareholders | |
| Latest headline from kalkinemedia.com: Russell Stover x Southwest Airlines Take Love to New Heights this Valentines Day |
Southwest Airlines uses earnings reports to provide investors with an update of all three financial statements, including the income statement, the balance sheet, and the cash flow statement. Therefore, it is also crucial when considering investing in Southwest Airlines. Every quarterly earnings report provides investors with an overview of sales, expenses, and net income for the most recent period. It also may provide a comparison to Southwest Airlines' previous reporting period. The quarterly earnings reports are usually disseminated to the public via Form 10-Q, which is a legal document filed with the Securities and Exchange Commission every quarter.
| 25th of April 2024 Upcoming Quarterly Report | View | |
| 25th of July 2024 Next Financial Report | View | |
| 31st of March 2024 Next Fiscal Quarter End | View | |
| 23rd of January 2025 Next Fiscal Year End | View | |
| 31st of December 2023 Last Quarter Report | View | |
| 31st of December 2023 Last Financial Announcement | View |
Earnings surprises can significantly impact Southwest Airlines' stock price both in the short term and over time. Negative earnings surprises usually result in a price decline. However, it has been seen that positive earnings surprises lead to an immediate rise in a stock's price and a gradual increase over time. This is why we often hear news about some companies beating earning projections. Financial analysts spend a large amount of time predicting earnings per share (EPS) along with other important future indicators. Many analysts use forecasting models, management guidance, and additional fundamental information to derive an EPS estimate. Below are the table of largest EPS Surprises Southwest Airlines' investors have experienced.
| Reported | Fiscal Date | Estimated EPS | Reported EPS | Surprise | |||
|---|---|---|---|---|---|---|---|
2013-01-24 | 2012-12-31 | 0.08 | 0.09 | 0.01 | 12 | ||
2012-01-19 | 2011-12-31 | 0.08 | 0.09 | 0.01 | 12 | ||
2009-10-15 | 2009-09-30 | 0.02 | 0.03 | 0.01 | 50 | ||
2009-07-21 | 2009-06-30 | 0.07 | 0.08 | 0.01 | 14 | ||
2006-04-20 | 2006-03-31 | 0.07 | 0.08 | 0.01 | 14 | ||
2005-01-19 | 2004-12-31 | 0.08 | 0.07 | -0.01 | 12 | ||
2002-10-17 | 2002-09-30 | 0.05 | 0.06 | 0.01 | 20 | ||
1997-01-23 | 1996-12-31 | 0.03 | 0.04 | 0.01 | 33 |
Southwest Airlines Target Price Consensus
Southwest target price is determined by taking all analyst projections and averaging them out. There is no one specific way to measure analysts' performance other than comparing it to past results via a very sophisticated attribution analysis. Southwest Airlines' target price projections below should be used in combination with other traditional price prediction techniques such as stock price forecasting, investor sentiment analysis, technical analysis, earnings estimate, and various momentum models.
| 23 | Hold |
Most Southwest analysts issue ratings four times a year, at intervals of three months. Ratings are usually accompanied by a target price to help potential investors understand Southwest stock's fair price compared to its market value. Analysts arrive at stock ratings after researching the public financial statements of Southwest Airlines, talking to its executives and customers, or listening to those companies' conference calls.
Macroaxis Advice Exposure ValuationSouthwest Airlines Target Price Projection
Southwest Airlines' current and average target prices are 30.28 and 32.26, respectively. The current price of Southwest Airlines is the price at which Southwest Airlines is currently trading. On the other hand, Southwest Airlines' target price is what analysts think the stock is worth or could sell for in the future. The more significant the discrepancy between the two prices, the more it stimulates investors to act.Current Price
Southwest Airlines Market Quote on 17th of February 2025
Target Price
Analyst Consensus On Southwest Airlines Target Price
Southwest Airlines Analyst Ratings
Southwest Airlines' analyst stock recommendations are determined by taking an average estimate of all analysts we track and classifying them as Strong Buy, Buy, Hold, Strong Sell, or Sell. Ratings generally communicate what analysts sense about Southwest Airlines stock, and they use a lot of effort and time to analyze it and arrive at a rating. That suggests that analyst recommendations are the outcome of an objective and thorough examination of Southwest Airlines' financials, market performance, and future outlook by experienced professionals. Southwest Airlines' historical ratings below, therefore, can serve as a valuable tool for investors.Know Southwest Airlines' Top Institutional Investors
Have you ever been surprised when a price of an equity instrument such as Southwest Airlines is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading Southwest Airlines backward and forwards among themselves. Southwest Airlines' institutional investor refers to the entity that pools money to purchase Southwest Airlines' securities or originate loans. Institutional investors include commercial and private banks, credit unions, insurance companies, pension funds, hedge funds, endowments, and mutual funds. Operating companies that invest excess capital in these types of assets may also be included in the term and may influence corporate governance by exercising voting rights in their investments.
| Shares | Morgan Stanley - Brokerage Accounts | 2024-09-30 | 8.1 M | Amvescap Plc. | 2024-09-30 | 6.7 M | Dimensional Fund Advisors, Inc. | 2024-12-31 | 6.1 M | Fmr Inc | 2024-09-30 | 6 M | Jpmorgan Chase & Co | 2024-09-30 | 5.3 M | American Century Companies Inc | 2024-12-31 | 5.3 M | Bank Of America Corp | 2024-09-30 | 5.1 M | Northern Trust Corp | 2024-09-30 | 4.5 M | Jacobs Levy Equity Management, Inc. | 2024-09-30 | 3.6 M | Vanguard Group Inc | 2024-12-31 | 68.7 M | Elliott Investment Management Lp | 2024-09-30 | 61.1 M |
Southwest Airlines' market capitalization trends
The company currently falls under 'Large-Cap' category with a total capitalization of 17.95 B.Market Cap |
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Southwest Airlines' profitablity analysis
| Last Reported | Projected for Next Year | ||
| Return On Tangible Assets | 0.01 | 0.01 | |
| Return On Capital Employed | 0.01 | 0.01 | |
| Return On Assets | 0.01 | 0.01 | |
| Return On Equity | 0.04 | 0.04 |
Determining Southwest Airlines' profitability involves analyzing its financial statements and using various financial metrics to determine if Southwest Airlines is a good buy. For example, gross profit margin measures Southwest Airlines' profitability after accounting for the cost of goods sold, while net profit margin measures profitability after accounting for all expenses. Other important metrics include return on assets, return on equity, and free cash flow. By reviewing multiple sources and metrics, you can gain a complete picture of Southwest Airlines' profitability and make more informed investment decisions.
Please note, the imprecision that can be found in Southwest Airlines' accounting process means that the reasonable investor should take a skeptical approach toward the financial statement analysis of Southwest Airlines. Check Southwest Airlines' Beneish M Score to see the likelihood of Southwest Airlines' management manipulating its earnings.
Evaluate Southwest Airlines' management efficiency
Return On Tangible Assets is likely to drop to 0.01 in 2025. Return On Capital Employed is likely to drop to 0.01 in 2025. At this time, Southwest Airlines' Non Current Assets Total are fairly stable compared to the past year. Non Currrent Assets Other is likely to climb to about 1.1 B in 2025, whereas Other Current Assets are likely to drop slightly above 331.4 M in 2025. Southwest Airlines' management efficiency ratios could be used to measure how well Southwest Airlines manages its routine affairs as well as how well it operates its assets and liabilities.| Last Reported | Projected for Next Year | ||
| Book Value Per Share | 16.79 | 17.63 | |
| Tangible Book Value Per Share | 14.73 | 15.47 | |
| Enterprise Value Over EBITDA | 8.50 | 4.65 | |
| Price Book Value Ratio | 2.00 | 1.90 | |
| Enterprise Value Multiple | 8.50 | 4.65 | |
| Price Fair Value | 2.00 | 1.90 | |
| Enterprise Value | 19.1 B | 20.1 B |
Southwest Airlines benefits from a management team that prioritizes both innovation and efficiency. We analyze these priorities to gauge the stock's future performance.
Basic technical analysis of Southwest Stock
As of the 17th of February 2025, Southwest Airlines has the Variance of 2.14, coefficient of variation of (2,683), and Risk Adjusted Performance of (0.02). In relation to fundamental indicators, the technical analysis model makes it possible for you to check existing technical drivers of Southwest Airlines, as well as the relationship between them. Please validate Southwest Airlines risk adjusted performance, information ratio, as well as the relationship between the Information Ratio and kurtosis to decide if Southwest Airlines is priced more or less accurately, providing market reflects its prevalent price of 30.28 per share. Given that Southwest Airlines has information ratio of (0.04), we advise you to double-check Southwest Airlines's current market performance to make sure the company can sustain itself at a future point.Southwest Airlines' Outstanding Corporate Bonds
Southwest Airlines issues bonds to finance its operations. Corporate bonds make up one of the largest components of the U.S. bond market, which is considered the world's largest securities market. Southwest Airlines uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most Southwest bonds can be classified according to their maturity, which is the date when Southwest Airlines has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
| SOUTHWEST AIRLS 7375 Corp BondUS844741AN81 | View | |
| SOUTHWEST AIRLINES CO Corp BondUS844741BK34 | View | |
| SOUTHWEST AIRLS 3 Corp BondUS844741BC18 | View | |
| US844741BF49 Corp BondUS844741BF49 | View | |
| SOUTHWEST AIRLS 345 Corp BondUS844741BE73 | View | |
| Valero Energy Partners Corp BondUS91914JAA07 | View | |
| MPLX LP 4125 Corp BondUS55336VAK61 | View |
Understand Southwest Airlines' technical and predictive indicators
Using predictive indicators to make investment decisions involves analyzing Southwest Airlines' various financial and market-based factors to help forecast future trends and identify investment opportunities. Select the indicators that are most relevant to your investment strategy. Each indicator has its own strengths and weaknesses, so it's essential to combine multiple indicators to get a more comprehensive view of the market and reduce the risk of making poor decisions based on limited data.
| Risk Adjusted Performance | (0.02) | |||
| Market Risk Adjusted Performance | (0.84) | |||
| Mean Deviation | 1.13 | |||
| Coefficient Of Variation | (2,683) | |||
| Standard Deviation | 1.46 | |||
| Variance | 2.14 | |||
| Information Ratio | (0.04) | |||
| Jensen Alpha | (0.06) | |||
| Total Risk Alpha | (0.07) | |||
| Treynor Ratio | (0.85) | |||
| Maximum Drawdown | 7.88 | |||
| Value At Risk | (2.24) | |||
| Potential Upside | 2.03 | |||
| Skewness | (0.02) | |||
| Kurtosis | 0.6035 |
| Risk Adjusted Performance | (0.02) | |||
| Market Risk Adjusted Performance | (0.84) | |||
| Mean Deviation | 1.13 | |||
| Coefficient Of Variation | (2,683) | |||
| Standard Deviation | 1.46 | |||
| Variance | 2.14 | |||
| Information Ratio | (0.04) | |||
| Jensen Alpha | (0.06) | |||
| Total Risk Alpha | (0.07) | |||
| Treynor Ratio | (0.85) | |||
| Maximum Drawdown | 7.88 | |||
| Value At Risk | (2.24) | |||
| Potential Upside | 2.03 | |||
| Skewness | (0.02) | |||
| Kurtosis | 0.6035 |
Consider Southwest Airlines' intraday indicators
Southwest Airlines intraday indicators are useful technical analysis tools used by many experienced traders. Just like the conventional technical analysis, daily indicators help intraday investors to analyze the price movement with the timing of Southwest Airlines stock daily movement. By combining multiple daily indicators into a single trading strategy, you can limit your risk while still earning strong returns on your managed positions.
Southwest Airlines Corporate Filings
F4 | 11th of February 2025 The report filed by a party regarding the acquisition or disposition of a company's common stock, as well as derivative securities such as options, warrants, and convertible securities | ViewVerify |
8K | 10th of February 2025 Report filed with the SEC to announce major events that shareholders should know about | ViewVerify |
10K | 7th of February 2025 Annual report required by the U.S. Securities and Exchange Commission (SEC) of a company financial performance | ViewVerify |
| 16th of December 2024 Other Reports | ViewVerify |
Southwest Stock media impact
Far too much social signal, news, headlines, and media speculation about Southwest Airlines that are available to investors today. That information is available publicly through Southwest media outlets and privately through word of mouth or via Southwest internal channels. However, regardless of the origin, that massive amount of Southwest data is challenging to quantify into actionable patterns, especially for investors that are not very sophisticated with ever-evolving tools and techniques used in the investment management field.
A primary focus of Southwest Airlines news analysis is to determine if its current price reflects all relevant headlines and social signals impacting the current market conditions. A news analyst typically looks at the history of Southwest Airlines relative headlines and hype rather than examining external drivers such as technical or fundamental data. It is believed that price action tends to repeat itself due to investors' collective, patterned thinking related to Southwest Airlines' headlines and news coverage data. This data is often completely overlooked or insufficiently analyzed for actionable insights to drive Southwest Airlines alpha.
Southwest Airlines Sentiment by Major News Outlets
Investor sentiment, mood or attitude towards Southwest Airlines can have a significant impact on its stock price or the market as a whole. This sentiment can be positive or negative, and various factors, such as economic indicators, news events, or market trends, can influence it. When investor sentiment is positive, investors are more likely to buy stocks, increasing demand and increasing the stock price. Positive investor sentiment can be driven by good news about the company or the broader market, such as solid earnings reports or positive economic data.
Note that negative investor sentiment can cause investors to sell stocks, leading to a decrease in demand and a drop in the stock price. Negative sentiment can be driven by factors such as poor earnings reports, negative news about the company or industry, or broader economic concerns. It's important to note that investor sentiment is just one of many factors that can affect stock prices. Other factors, such as company performance, industry trends, and global economic conditions, can also play a significant role in determining the value of a stock.
Southwest Airlines Historical Investor Sentiment
Investor biases related to Southwest Airlines' public news can be used to forecast risks associated with an investment in Southwest. The trend in average sentiment can be used to explain how an investor holding Southwest can time the market purely based on public headlines and social activities around Southwest Airlines. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Southwest Airlines' market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Southwest Airlines and other traded tickers. The bigger the bubble, the more accurate the estimated score. Higher bars for a given day show more participation in the average Southwest Airlines news discussions. The higher the estimate score, the more favorable the investor's outlook on Southwest Airlines.
Southwest Airlines Corporate Directors
| Thomas Gilligan | Independent Director | Profile | |
| Nancy Loeffler | Independent Director | Profile | |
| Douglas Brooks | Independent Director | Profile | |
| John Montford | Independent Director | Profile |
Additional Tools for Southwest Stock Analysis
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.