Southwest Airlines Valuation
| LUV Stock | USD 32.36 0.40 1.25% |
At this time, the company appears to be fairly valued. Southwest Airlines has a current Real Value of $31.12 per share. The regular price of the company is $32.36. Our model measures the value of Southwest Airlines from inspecting the company fundamentals such as Operating Margin of 0 %, return on equity of -0.0045, and Shares Outstanding of 599.74 M as well as reviewing its technical indicators and probability of bankruptcy. Key fundamental drivers impacting Southwest Airlines' valuation include:
Price Book 1.8682 | Enterprise Value 19.2 B | Enterprise Value Ebitda 10.2309 | Price Sales 0.7002 | Forward PE 20.5339 |
Fairly Valued
Today
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.
The fair value of the Southwest stock is 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 32.36 | Real 31.12 | Target 30.77 | Hype 32.45 | Naive 31.36 |
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.
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: Traditionally, analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Southwest Airlines' intrinsic value based on its ongoing forecasts of Southwest Airlines' financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Southwest Airlines' closest peers.
Southwest Airlines Cash |
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Southwest Valuation Trend
Analysing the historical paterns of Southwest Airlines' enterprise value and its market capitalization is a good way to estimate and gauge the value of Southwest Airlines over time and is usually enough for investors to make rational market timing decisions.
Southwest Revenue by Product
Southwest Airlines Total Value Analysis
Southwest Airlines is now anticipated to have company total value of 19.16 B with market capitalization of 19.17 B, debt of 9.2 B, and cash on hands of 9.49 B. Please note that company total value may be misleading and is a subject to accounting gimmicks. We encourage investors to carefully check all of the Southwest Airlines fundamentals before making security assessment based on enterprise value of the company| Takeover Price | Market Cap | Debt Obligations | Cash |
19.16 B | 19.17 B | 9.2 B | 9.49 B |
Southwest Airlines Investor Information
About 92.0% of the company shares are owned by institutional investors. The company has price-to-book ratio of 1.87. 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 0.48. The entity recorded a loss per share of 0.08. The firm last dividend was issued on the 26th of December 2024. Southwest Airlines had 3:2 split on the 16th of February 2001. Based on the key indicators related to Southwest Airlines' liquidity, profitability, solvency, and operating efficiency, Southwest Airlines is not in a good financial situation at this time. It has a very high probability of going through financial hardship in December.Southwest Airlines Asset Utilization
The concept of asset utilization usually refers to the revenue earned for every dollar of assets a company currently reports. The latest return on assets of Southwest indicates not a very effective usage of assets in November.Southwest Airlines Ownership Allocation
Southwest Airlines shows a total of 599.74 Million outstanding shares. The majority of Southwest Airlines outstanding shares are owned by institutional holders. These institutional investors are usually referred to as non-private investors looking to take positions in Southwest Airlines to benefit from reduced commissions. Consequently, institutions are subject to a different set of regulations than regular investors in Southwest Airlines. Please pay attention to any change in the institutional holdings of Southwest Airlines as this could imply that something significant has changed or is about to change at the company. Please note that on August 19, 2022, Representative Dwight Evans of US Congress acquired under $15k worth of Southwest Airlines's common stock.Southwest Airlines Profitability Analysis
The company reported the last year's revenue of 26.09 B. Total Income to common stockholders was 465 M with profit before taxes, overhead, and interest of 5.98 B.Southwest Airlines Past Distributions to stockholders
About Southwest Airlines Valuation
Our relative valuation model uses a comparative analysis of Southwest Airlines. We calculate exposure to Southwest Airlines's market risk, different technical and fundamental indicators, and relevant financial multiples and ratios and then compare them to those of Southwest Airlines's related companies.| Last Reported | Projected for Next Year | ||
| Gross Profit | 4.2 B | 3.5 B | |
| Pretax Profit Margin | 0.02 | 0.02 | |
| Operating Profit Margin | 0.01 | 0.01 | |
| Net Profit Margin | 0.02 | 0.02 | |
| Gross Profit Margin | 0.16 | 0.15 |
Southwest Airlines Quarterly Retained Earnings |
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A single share of Southwest Airlines represents a small ownership stake in the entity. As a stockholder of Southwest, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.
Southwest Airlines Dividends Analysis For Valuation
Dividends Paid is likely to climb to about 449.4 M in 2024. Dividend Yield is likely to climb to 0.02 in 2024. At this time, Southwest Airlines' Retained Earnings are fairly stable compared to the past year. Earnings Yield is likely to climb to 0.05 in 2024, whereas Retained Earnings Total Equity is likely to drop slightly above 11.2 B in 2024.
| Last Reported | Projected for Next Year | ||
| Dividends Paid | 428 M | 449.4 M | |
| Dividend Yield | 0.02 | 0.02 | |
| Dividend Payout Ratio | 0.83 | 0.87 | |
| Dividend Paid And Capex Coverage Ratio | 0.79 | 0.94 |
There are various types of dividends Southwest Airlines can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Southwest shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Southwest Airlines directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Southwest pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Southwest Airlines by the value of the dividends paid out.
Southwest Airlines Growth Indicators
Investing in growth stocks can be very risky. If the company such as Southwest Airlines does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
| Common Stock Shares Outstanding | 640 M | |
| Quarterly Earnings Growth Y O Y | -0.644 | |
| Forward Price Earnings | 20.5339 |
Southwest Airlines Current Valuation Indicators
Southwest Airlines' valuation analysis is a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Southwest Airlines' valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Southwest Airlines, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Southwest Airlines' valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Southwest Airlines' worth.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.