LUV Valuation

Southwest Airlines Co

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29.710

-0.21(-0.702%)1D

Overview
Forecast
Valuation
Earnings

LUV Relative Valuation

LUV's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, LUV is overvalued; if below, it's undervalued.

Historical Valuation

Southwest Airlines Co (LUV) is now in the Undervalued zone, suggesting that its current forward PS ratio of 0.00 is considered Undervalued compared with the five-year average of 26.09. The fair price of Southwest Airlines Co (LUV) is between +Inf to +Inf according to relative valuation methord. Compared to the current price of 29.71 USD , Southwest Airlines Co is Undervalued By Fair.

Relative Value

Fair Zone

+Inf-+Inf

Current Price：29.71

Fair

Undervalued

16.56

Trailing

Forward

6.33

EV/EBITDA

Southwest Airlines Co. (LUV) has a current EV/EBITDA of 6.33. The 5-year average EV/EBITDA is -17.67. The thresholds are as follows: Strongly Undervalued below -219.24, Undervalued between -219.24 and -118.46, Fairly Valued between 83.11 and -118.46, Overvalued between 83.11 and 183.90, and Strongly Overvalued above 183.90. The current Forward EV/EBITDA of 6.33 falls within the Historic Trend Line -Fairly Valued range.

15.25

EV/EBIT

Southwest Airlines Co. (LUV) has a current EV/EBIT of 15.25. The 5-year average EV/EBIT is 76.05. The thresholds are as follows: Strongly Undervalued below -465.29, Undervalued between -465.29 and -194.62, Fairly Valued between 346.71 and -194.62, Overvalued between 346.71 and 617.38, and Strongly Overvalued above 617.38. The current Forward EV/EBIT of 15.25 falls within the Historic Trend Line -Fairly Valued range.

0.54

Southwest Airlines Co. (LUV) has a current PS of 0.54. The 5-year average PS is 1.04. The thresholds are as follows: Strongly Undervalued below -0.02, Undervalued between -0.02 and 0.51, Fairly Valued between 1.56 and 0.51, Overvalued between 1.56 and 2.09, and Strongly Overvalued above 2.09. The current Forward PS of 0.54 falls within the Historic Trend Line -Fairly Valued range.

13.90

P/OCF

Southwest Airlines Co. (LUV) has a current P/OCF of 13.90. The 5-year average P/OCF is -1146.68. The thresholds are as follows: Strongly Undervalued below -14259.43, Undervalued between -14259.43 and -7703.06, Fairly Valued between 5409.69 and -7703.06, Overvalued between 5409.69 and 11966.06, and Strongly Overvalued above 11966.06. The current Forward P/OCF of 13.90 falls within the Historic Trend Line -Fairly Valued range.

-8.80

P/FCF

Southwest Airlines Co. (LUV) has a current P/FCF of -8.80. The 5-year average P/FCF is -715.41. The thresholds are as follows: Strongly Undervalued below -6687.92, Undervalued between -6687.92 and -3701.66, Fairly Valued between 2270.85 and -3701.66, Overvalued between 2270.85 and 5257.10, and Strongly Overvalued above 5257.10. The current Forward P/FCF of -8.80 falls within the Historic Trend Line -Fairly Valued range.

Southwest Airlines Co (LUV) has a current Price-to-Book (P/B) ratio of 1.95. Compared to its 3-year average P/B ratio of 1.78 , the current P/B ratio is approximately 9.69% higher. Relative to its 5-year average P/B ratio of 2.21, the current P/B ratio is about -11.77% higher. Southwest Airlines Co (LUV) has a Forward Free Cash Flow (FCF) yield of approximately 0.00%. Compared to its 3-year average FCF yield of -4.66%, the current FCF yield is approximately -100.00% lower. Relative to its 5-year average FCF yield of -1.90% , the current FCF yield is about -100.00% lower.

1.95

P/B

Median3y

1.78

Median5y

2.21

-1.74

FCF Yield

Median3y

-4.66

Median5y

-1.90

Competitors Valuation Multiple

The average P/S ratio for LUV's competitors is 0.50, providing a benchmark for relative valuation. Southwest Airlines Co Corp (LUV) exhibits a P/S ratio of , which is -100.00% above the industry average. Given its robust revenue growth of -1.50%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

LUV.N

Southwest Airlines Co

Controladora Vuela Compania de Aviacion SAB de CV

American Airlines Group Inc

Performance Decomposition

Market capitalization of LUV increased by 4.64% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 30.37 to 44.71.

The secondary factor is the Revenue Growth, contributed -1.50%to the performance.

Overall, the performance of LUV in the past 1 year is driven by P/E Change. Which is more unsustainable.

-1.50%

7.35B → 7.24B

Revenue Growth

-41.08%

4.99 → 2.94

Margin Expansion

47.22%

30.37 → 44.71

P/E Change

4.64%