Southwest Airlines Price To Earning vs. EBITDA
| LUV Stock | MXN 680.00 3.00 0.44% |
For Southwest Airlines profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Southwest Airlines to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Southwest Airlines utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Southwest Airlines's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Southwest Airlines over time as well as its relative position and ranking within its peers.
Southwest |
Southwest Airlines EBITDA vs. Price To Earning Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Southwest Airlines's current stock value. Our valuation model uses many indicators to compare Southwest Airlines value to that of its competitors to determine the firm's financial worth. Southwest Airlines is currently regarded as number one stock in price to earning category among its peers. It also is currently regarded as number one stock in ebitda category among its peers totaling about 10,227,761 of EBITDA per Price To Earning. Comparative valuation analysis is a catch-all model that can be used if you cannot value Southwest Airlines by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Southwest Airlines' Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.Southwest EBITDA vs. Price To Earning
Price to Earnings ratio is typically used for current valuation of a company and is one of the most popular ratios that investors monitor daily. Holding a low PE stock is less risky because when a company's profitability falls, it is likely that earnings will also go down as well. In other words, if you start from a lower position, your downside risk is limited. There are also some investors who believe that low Price to Earnings ratio reflects the low pricing because a given company is in trouble. On the other hand, a higher PE ratio means that investors are paying more for each unit of profit.
Southwest Airlines |
| = | 232.70 X |
Generally speaking, the Price to Earnings ratio gives investors an idea of what the market is willing to pay for the company's current earnings.
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a measure of a company operating cash flow based on data from the company income statement and is a very good way to compare companies within industries or across different sectors. However, unlike Operating Cash Flow, EBITDA does not include the effects of changes in working capital.
Southwest Airlines |
| = | 2.38 B |
In a nutshell, EBITDA is calculated by adding back each of the excluded items to the post-tax profit, and can be used to compare companies with very different capital structures.
Southwest EBITDA Comparison
Southwest Airlines is currently under evaluation in ebitda category among its peers.
Southwest Airlines Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Southwest Airlines, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Southwest Airlines will eventually generate negative long term returns. The profitability progress is the general direction of Southwest Airlines' change in net profit over the period of time. It can combine multiple indicators of Southwest Airlines, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
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 founded in 1967 and is headquartered in Dallas, Texas. SOUTHWEST AIRLINES operates under Airlines classification in Mexico and is traded on Mexico Stock Exchange. It employs 54448 people.
Southwest Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Southwest Airlines. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Southwest Airlines position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Southwest Airlines' important profitability drivers and their relationship over time.
Use Southwest Airlines in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Southwest Airlines position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Southwest Airlines will appreciate offsetting losses from the drop in the long position's value.Southwest Airlines Pair Trading
Southwest Airlines Pair Trading Analysis
The ability to find closely correlated positions to Southwest Airlines could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Southwest Airlines when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Southwest Airlines - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Southwest Airlines to buy it.
The correlation of Southwest Airlines is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Southwest Airlines moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Southwest Airlines moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Southwest Airlines can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Southwest Airlines position
In addition to having Southwest Airlines in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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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.