SOUTHWEST AIRLINES CO (SWN.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:SWN - US8447411088 - Common Stock
34.925 EUR
-0.55 (-1.56%)
SWN gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 14 industry peers in the Passenger Airlines industry. SWN has a bad profitability rating. Also its financial health evaluation is rather negative. While showing a medium growth rate, SWN is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- In the past year SWN was profitable.
- SWN had a positive operating cash flow in the past year.
- Of the past 5 years SWN 4 years were profitable.
- Of the past 5 years SWN 4 years had a positive operating cash flow.
1.2 Ratios
- SWN has a worse Return On Assets (1.34%) than 85.71% of its industry peers.
- With a Return On Equity value of 4.87%, SWN is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
- With a Return On Invested Capital value of 1.38%, SWN is not doing good in the industry: 92.86% of the companies in the same industry are doing better.
- Measured over the past 3 years, the Average Return On Invested Capital for SWN is significantly below the industry average of 9.17%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.34% | ||
| ROE | 4.87% | ||
| ROIC | 1.38% |
ROA(3y)1.39%
ROA(5y)-0.4%
ROE(3y)4.65%
ROE(5y)-2.26%
ROIC(3y)1.77%
ROIC(5y)N/A
1.3 Margins
- SWN has a worse Profit Margin (1.38%) than 85.71% of its industry peers.
- In the last couple of years the Profit Margin of SWN has declined.
- The Operating Margin of SWN (1.14%) is worse than 92.86% of its industry peers.
- In the last couple of years the Operating Margin of SWN has declined.
- With an excellent Gross Margin value of 73.50%, SWN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- SWN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.14% | ||
| PM (TTM) | 1.38% | ||
| GM | 73.5% |
OM growth 3YN/A
OM growth 5Y-38.41%
PM growth 3Y-35.09%
PM growth 5Y-30.26%
GM growth 3Y0.9%
GM growth 5Y-0.77%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SWN is destroying value.
- The number of shares outstanding for SWN has been reduced compared to 1 year ago.
- SWN has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, SWN has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.20 indicates that SWN is not a great score, but indicates only limited risk for bankruptcy at the moment.
- With an excellent Altman-Z score value of 2.20, SWN belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
- SWN has a Debt/Equity ratio of 0.52. This is a neutral value indicating SWN is somewhat dependend on debt financing.
- SWN's Debt to Equity ratio of 0.52 is amongst the best of the industry. SWN outperforms 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.2 |
ROIC/WACC0.16
WACC8.74%
2.3 Liquidity
- SWN has a Current Ratio of 0.49. This is a bad value and indicates that SWN is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Current ratio value of 0.49, SWN is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
- A Quick Ratio of 0.42 indicates that SWN may have some problems paying its short term obligations.
- The Quick ratio of SWN (0.42) is worse than 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.42 |
3. Growth
3.1 Past
- SWN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 31.08%, which is quite impressive.
- SWN shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -26.91% yearly.
- SWN shows a small growth in Revenue. In the last year, the Revenue has grown by 0.64%.
- The Revenue has been growing slightly by 4.15% on average over the past years.
EPS 1Y (TTM)31.08%
EPS 3Y-23.26%
EPS 5Y-26.91%
EPS Q2Q%-26.67%
Revenue 1Y (TTM)0.64%
Revenue growth 3Y20.29%
Revenue growth 5Y4.15%
Sales Q2Q%1.15%
3.2 Future
- The Earnings Per Share is expected to grow by 42.60% on average over the next years. This is a very strong growth
- SWN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.36% yearly.
EPS Next Y3.46%
EPS Next 2Y86.79%
EPS Next 3Y64.25%
EPS Next 5Y42.6%
Revenue Next Year2.23%
Revenue Next 2Y5.66%
Revenue Next 3Y5.52%
Revenue Next 5Y5.36%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 43.12, which means the current valuation is very expensive for SWN.
- Based on the Price/Earnings ratio, SWN is valued expensively inside the industry as 92.86% of the companies are valued cheaper.
- SWN's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.82.
- A Price/Forward Earnings ratio of 12.84 indicates a correct valuation of SWN.
- SWN's Price/Forward Earnings ratio is rather expensive when compared to the industry. SWN is more expensive than 92.86% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.95. SWN is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 43.12 | ||
| Fwd PE | 12.84 |
4.2 Price Multiples
- SWN's Enterprise Value to EBITDA ratio is rather expensive when compared to the industry. SWN is more expensive than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.78 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- A more expensive valuation may be justified as SWN's earnings are expected to grow with 64.25% in the coming years.
PEG (NY)12.46
PEG (5Y)N/A
EPS Next 2Y86.79%
EPS Next 3Y64.25%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.70%, SWN has a reasonable but not impressive dividend return.
- SWN's Dividend Yield is a higher than the industry average which is at 0.99.
- SWN's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
5.2 History
- The dividend of SWN has a limited annual growth rate of 0.82%.
Dividend Growth(5Y)0.82%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
- 105.01% of the earnings are spent on dividend by SWN. This is not a sustainable payout ratio.
- SWN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP105.01%
EPS Next 2Y86.79%
EPS Next 3Y64.25%
SOUTHWEST AIRLINES CO / SWN.DE FAQ
What is the ChartMill fundamental rating of SOUTHWEST AIRLINES CO (SWN.DE) stock?
ChartMill assigns a fundamental rating of 3 / 10 to SWN.DE.
What is the valuation status for SWN stock?
ChartMill assigns a valuation rating of 2 / 10 to SOUTHWEST AIRLINES CO (SWN.DE). This can be considered as Overvalued.
What is the profitability of SWN stock?
SOUTHWEST AIRLINES CO (SWN.DE) has a profitability rating of 3 / 10.
What is the expected EPS growth for SOUTHWEST AIRLINES CO (SWN.DE) stock?
The Earnings per Share (EPS) of SOUTHWEST AIRLINES CO (SWN.DE) is expected to grow by 3.46% in the next year.
Is the dividend of SOUTHWEST AIRLINES CO sustainable?
The dividend rating of SOUTHWEST AIRLINES CO (SWN.DE) is 4 / 10 and the dividend payout ratio is 105.01%.