Southwest Airlines Co
Find Ratings Reports
0.4 |
0.65%
SOUTHWEST AIRLINES's gross profit margin for the first quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. SOUTHWEST AIRLINES has weak liquidity. Currently, the Quick Ratio is 0.55 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.
During the same period, stockholders' equity ("net worth") has increased by 9.44% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.
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| Income Statement | Q1 FY17 | Q1 FY16 |
|---|---|---|
| Net Sales ($mil) | 4883.0 | 4826.0 |
| EBITDA ($mil) | 981.0 | 1234.0 |
| EBIT ($mil) | 663.0 | 944.0 |
| Net Income ($mil) | 351.0 | 511.0 |
| Balance Sheet | Q1 FY17 | Q1 FY16 |
|---|---|---|
| Cash & Equiv. ($mil) | 3482.0 | 3582.0 |
| Total Assets ($mil) | 23763.0 | 22241.0 |
| Total Debt ($mil) | 3066.0 | 3308.0 |
| Equity ($mil) | 8204.0 | 7496.0 |
| Profitability | Q1 FY17 | Q1 FY16 |
|---|---|---|
| Gross Profit Margin | 33.14 | 37.55 |
| EBITDA Margin | 20.09 | 25.56 |
| Operating Margin | 13.58 | 19.56 |
| Sales Turnover | 0.86 | 0.9 |
| Return on Assets | 8.76 | 10.06 |
| Return on Equity | 25.4 | 29.86 |
| Debt | Q1 FY17 | Q1 FY16 |
|---|---|---|
| Current Ratio | 0.62 | 0.55 |
| Debt/Capital | 0.27 | 0.31 |
| Interest Expense | 29.0 | 30.0 |
| Interest Coverage | 22.86 | 31.47 |
| Share Data | Q1 FY17 | Q1 FY16 |
|---|---|---|
| Shares outstanding (mil) | 604.66 | 638.69 |
| Div / share | 0.1 | 0.08 |
| EPS | 0.57 | 0.79 |
| Book value / share | 13.57 | 11.74 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 4606070.0 | 5588277.0 |
BUY. This stock's P/E ratio indicates a discount compared to an average of 21.53 for the Airlines industry and a discount compared to the S&P 500 average of 25.73. For additional comparison, its price-to-book ratio of 4.43 indicates a premium versus the S&P 500 average of 3.08 and a premium versus the industry average of 3.98. The current price-to-sales ratio is below the S&P 500 average, but above the industry average.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| LUV 18.16 | Peers 21.53 | LUV 8.42 | Peers 7.24 | |||||||||||||||||||||
|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. LUV is trading at a discount to its peers. |
Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. LUV is trading at a premium to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| LUV 12.79 | Peers 15.61 | LUV 2.15 | Peers 2.45 | |||||||||||||||||||||
|
Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations. LUV is trading at a valuation on par with its peers. |
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. LUV trades at a discount to its peers. |
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| Price/Book |
|
Earnings Growth |
|
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| LUV 4.43 | Peers 3.98 | LUV -2.36 | Peers -14.91 | |||||||||||||||||||||
|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. LUV is trading at a premium to its peers. |
Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. LUV is expected to have an earnings growth rate that significantly exceeds its peers. |
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| Price/Sales |
|
Sales Growth |
|
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| LUV 1.77 | Peers 1.47 | LUV 2.10 | Peers 0.19 | |||||||||||||||||||||
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Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. LUV is trading at a premium to its industry on this measurement. |
Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share. LUV has a sales growth rate that significantly exceeds its peers. |
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