Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Southwest Airlines ( LUV) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Southwest Airlines as such a stock due to the following factors:

  • LUV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $276.1 million.
  • LUV traded 15,453 shares today in the pre-market hours as of 7:57 AM.
  • LUV is down 3.3% today from yesterday's close.

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More details on LUV:

Southwest Airlines Co. operates passenger airlines that provide scheduled air transportation services in the United States and near-international markets. As of December 31, 2014, it operated 665 Boeing 737 aircraft; and had 12 Boeing 717 aircraft. The stock currently has a dividend yield of 0.5%. LUV has a PE ratio of 27.7. Currently there are 10 analysts that rate Southwest Airlines a buy, 2 analysts rate it a sell, and 2 rate it a hold.

The average volume for Southwest Airlines has been 7.8 million shares per day over the past 30 days. Southwest Airlines has a market cap of $30.7 billion and is part of the services sector and transportation industry. The stock has a beta of 0.43 and a short float of 2% with 1.93 days to cover. Shares are up 6.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Southwest Airlines as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • LUV's revenue growth trails the industry average of 22.1%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, LUV's share price has jumped by 94.99%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • SOUTHWEST AIRLINES's earnings per share declined by 6.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SOUTHWEST AIRLINES increased its bottom line by earning $1.65 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $1.65).
  • The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that LUV's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Airlines industry and the overall market on the basis of return on equity, SOUTHWEST AIRLINES has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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