LUVLUV
US • —
$51.58
P/E
34.26
PEG
0.42
FCF Yield
—
Rev Growth YoY
+4.7% YoY
Gross Margin
73.8%
Health Score
5/10
D/E Ratio
0.61
Confidence
LOW
Business Snapshot
Southwest Airlines Co. is a major U.S. airline operating a point-to-point route network, primarily generating revenue from passenger ticket sales, with additional income from cargo, and loyalty programs. The company operates in a highly competitive, capital-intensive airline industry where it holds a position as a large domestic carrier, distinguished by its low-cost model and unique employee culture. The company's market cap is not available for this analysis, preventing a definitive scale assessment.
Financial Health
Gross margin stands at a strong 73.8%, though it is not possible to determine the trend direction as the prior year figure is unavailable. Net margin of 2.8% is thin, indicating that after operating expenses and taxes, the company retains a small portion of each dollar as profit...
Risk Assessment
- VALUATION — P/E of 34.26x is elevated compared to the sector average of 22x, representing a 56% premium.
- EARNINGS QUALITY — The company beat analyst estimates in only 1 of the last 4 quarters, suggesting low guidance credibility.
- DEBT / LIQUIDITY — Current ratio of 0.52x is well below the 1.0x threshold, indicating potential short-term liquidity stress.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
- MARGINS — Net margin of 2.8% is very thin, meaning a small shift in costs or revenue could significantly impact profitability....
Gross margin stands at a strong 73.8%, though it is not possible to determine the trend direction as the prior year figure is unavailable. Net margin of 2.8% is thin, indicating that after operating expenses and taxes, the company retains a small portion of each dollar as profit. The balance sheet appears healthy with a debt-to-equity ratio of 0.61x, but the current ratio of 0.52x signals potential liquidity pressure, as current assets cover only half of short-term obligations. Free cash flow data is not available, preventing an assessment of the company's cash generation or burn rate. Overall, the firm has solid asset efficiency and manageable leverage, but low margins and a weak current ratio suggest limited financial flexibility for dividends or aggressive reinvestment.
- VALUATION — P/E of 34.26x is elevated compared to the sector average of 22x, representing a 56% premium. - EARNINGS QUALITY — The company beat analyst estimates in only 1 of the last 4 quarters, suggesting low guidance credibility. - DEBT / LIQUIDITY — Current ratio of 0.52x is well below the 1.0x threshold, indicating potential short-term liquidity stress. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed. - MARGINS — Net margin of 2.8% is very thin, meaning a small shift in costs or revenue could significantly impact profitability.
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