Southwest Airlines Co
NYSE:LUV
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Southwest Airlines Co
NYSE:LUV
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Intrinsic Value
The intrinsic value of Southwest Airlines Co (LUV) under the Base Case is 43.03 USD per share.
Compared with the current market price of 43.665 USD, the stock appears
Overvalued by 1% .
The intrinsic value is calculated using the DCF method. The model assumes Southwest Airlines’ net margin rises from 1.6% last year to 7.4% by 2033. If it stayed at its five-year average of 2.7%, the estimate would be about $30. The value of the years after 2033 is based on revenue, so margins affect only the forecast years.
Do our valuations actually work? See backtest results .
Cheap or expensive for this stock?
This block shows whether today’s valuation is cheap or expensive compared with the stock’s own history, and what happened after similar valuations in the past.
We compare the gap between the stock’s price and our estimated value over time.
- Undervalued can still be historically expensive. The stock may trade below our estimated value, but usually offer an even bigger discount.
- Overvalued can still be historically cheap. The stock may trade above our estimated value, but usually carry an even higher premium.
Market expectations can differ from our model, which may not fully capture everything affecting the price. That is why some stocks regularly trade above our estimated value and others below it.
The scale and chart show how today’s valuation compares with the past. The cards summarize past returns and waiting times until the stock stopped being cheap or expensive. This can happen because the price changed, our estimated value changed, or both.
Only completed periods are included. These are past results, not forecasts. The usual historical range does not necessarily mean fair value.
Fundamental Analysis
What Southwest Airlines Does
Southwest Airlines is a U.S. airline that carries passengers and their checked bags on domestic and some international routes. It sells airline seats directly to travelers through its website, app, call centers, and travel partners, and it also sells related services such as seat upgrades, baggage fees, and credit card and loyalty program partnerships.
- Headquarters
- United States of America US
- Employees
- 73 401
- IPO date
- Jun 27, 1977
Southwest Airlines has no economic moat
Travelers can compare Southwest with other airlines and book a rival for their next trip without giving up anything costly to replace. Because competitors can match or beat its fares, and Southwest’s familiar name does not reliably let it charge more for a similar flight, rivals can win customers on price, schedule, or route.
Read the full moat analysis
Revenue & Expenses Breakdown
Southwest Airlines Co
Earnings Waterfall
Southwest Airlines Co
The intrinsic value for Southwest Airlines Co (LUV) under the Base Case is 43.03 USD.
Compared with the current market price of 43.665 USD, the stock appears Overvalued by 1% .