Southwest Airlines Shares Outstanding vs. Operating Margin

LUV Stock  USD 33.86  0.58  1.74%   
Based on Southwest Airlines' profitability indicators, Southwest Airlines may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in January. Profitability indicators assess Southwest Airlines' ability to earn profits and add value for shareholders. At this time, Southwest Airlines' Price To Sales Ratio is fairly stable compared to the past year. Operating Cash Flow Sales Ratio is likely to climb to 0.17 in 2024, whereas EV To Sales is likely to drop 0.62 in 2024. At this time, Southwest Airlines' Change To Netincome is fairly stable compared to the past year. Income Quality is likely to climb to 7.14 in 2024, whereas Net Income From Continuing Ops is likely to drop slightly above 472.1 M in 2024.
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 Airlines' Revenue Breakdown by Earning Segment

Check out Correlation Analysis.
For more information on how to buy Southwest Stock please use our How to Invest in Southwest Airlines guide.
Is Passenger Airlines space 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
(0.64)
Dividend Share
0.72
Earnings Share
(0.08)
Revenue Per Share
45.837
Quarterly Revenue Growth
0.053
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.

Southwest Airlines Operating Margin vs. Shares Outstanding 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 rated third overall in shares outstanding category among its peers. It is rated fourth overall in operating margin category among its peers . The ratio of Shares Outstanding to Operating Margin for Southwest Airlines is about  214,191,794,286 . At this time, Southwest Airlines' Operating Profit Margin is fairly stable compared to the past year. Comparative valuation analysis is a catch-all technique that is used if you cannot value Southwest Airlines by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Southwest Operating Margin vs. Shares Outstanding

Outstanding Shares are shares of common stock of a public company that were purchased by investors after they were authorized and issued by the company to the public. Outstanding Shares are typically reported on fully diluted basis, including exotic instruments such as options, or convertibles bonds.

Southwest Airlines

Shares Outstanding

 = 

Public Shares

-

Repurchased

 = 
599.74 M
Outstanding shares that are stated on company Balance Sheet are used when calculating many important valuation and performance indicators including Return on Equity, Market Cap, EPS and many others.
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Southwest Airlines

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.

Southwest Operating Margin Comparison

Southwest Airlines is currently under evaluation in operating margin 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.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income395.6 M415.4 M
Operating Income224 M212.8 M
Income Before Tax633 M846.8 M
Total Other Income Expense Net409 M429.4 M
Net Income465 M653.7 M
Income Tax Expense168 M254.6 M
Net Income Applicable To Common Shares619.9 M869.2 M
Net Income From Continuing Ops497 M472.1 M
Non Operating Income Net Other10.8 M11.3 M
Interest Income541 M568 M
Net Interest Income303 M318.1 M
Change To Netincome437.4 M459.3 M
Net Income Per Share 0.78  0.65 
Income Quality 6.80  7.14 
Net Income Per E B T 0.73  0.53 

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.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Southwest Airlines position

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Education
Education Theme
Companies involved in apprenticeship, education, tutoring, schooling, online universities, and other learning services. The Education theme has 42 constituents at this time.
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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.