Shares of Southwest Airlines Co. (NYSE:LUV) recorded -3.06% loss during trading session on May 23rd, 2019. The script traded as low as $50.36 and last traded at $50.96. 5.42 million shares changed exchanged hands during trading, a drop of -15.01% from the 30-day average session volume of 4.71M shares. The firm had previously closed at $52.57. The company has $546.70M outstanding shares, a price-to-earnings ratio of 12.08, price-to-earnings-growth ratio of 1.26and a beta of 1.48. The company has a RSI of 43.86, ATR of 1.23 and a volatility of 2.14% this week. LUV has a 52 week low price of $44.28 and a 52 week high price of $64.02.
Investors have identified the tech company Southwest Airlines Co. as an interesting stock but before investments are made there, an in-depth look at its trading activities will have to be conducted. The share is trading with a market value of around 27.86B, the company now has both obstacles and catalysts that affect them and they came from their mode of operations. With the company affected by events currently, it is a perfect time to analyze the numbers behind the firm in order to come up with a rather realistic picture of what this stock is.
Southwest Airlines Co. (LUV) Fundamentals that are to be considered.
When analyzing a stock, the first fundamental thing to take into account is the balance sheet. How healthy the balance sheet of a company is will determine if the company will be able to carry out all its financial and non-financial obligations and also keep the faith of its investors. For LUV, the company has in raw cash 2.34 billion on their books with 1.35 billion currently as liabilities. How the trend is over time is what investors should be concerned about. The company has a healthy balance sheet as their debt profile has been on a decline. In terms of their assets, the company currently has 0 total, with 16.32 billion as their total liabilities. This figure have given the company a good sense of viability under numerous contexts.
LUV were able to record 945 million as free cash flow during the recently reported quarter of the year, this saw their quarterly net cash flow reduce by 490 million. In cash movements, the company had a total of 1.11 billion as operating cash flow.
Potential earnings growth for Southwest Airlines Co. (LUV)
In order to determine the future investment potential for this stock, we will have to analyze key trends that affect it. During the third quarter of the year, Southwest Airlines Co. recorded a total of 5.15 billion in revenue. This figure implies that they witnessed a quarterly year/year change in their earnings with 0.04% coming in sequential stages and their sales for the third quarter reducing by -0.11%.
What matters though is how it ends. When the core data for the company is broken down, then the stock sounds interesting. The company spent 3.62 billion trying to sell their products during the last quarter, with the result yielding a gross income of 1.53 billion. This allows shareholders to hold on to 546.70M with the revenue now reading 700 cents per share. This is a figure that is close to analyst’s prediction for their fourth quarter (1.27 cents a share).
Is the stock of LUV attractive?
Having a look at the company’s valuation, the company is expected to record 5.25 total earnings per share during the next fiscal year. It is very important though to remember that the importance of trend far outweighs that of outlook. This analysis has been great and getting further updates on LUV sounds very interesting.
In related news, Director MONTFORD JOHN T sold 980 shares of the company’s stock in a transaction that recorded on December 12th, 2019. The sale was performed at an average price of 51.27, for a total value of 50,241. As the sale deal closes, the Director MONTFORD JOHN T now sold 956 shares of the company’s stock, valued at 50,042. Also, EVP & Chief Revenue Officer Watterson Andrew M sold 6,130 shares of the company’s stock in a deal that was recorded on August 17th, 2019. The shares were sold at an average price of 59.28 per share, with a total market value of 12,131. Following this completion of acquisition, the Director now holds 430 shares of the company’s stock, valued at 25,054. In the last 6 months, insiders have changed their ownership in shares of company stock by 0.30%.
7 out of 22 analysts covering the stock have rated it a Buy, while 9 have maintained a Hold recommendation on Southwest Airlines Co. stock. 0 analysts has assigned a Sell rating on the LUV stock. The 12-month mean consensus price target for the company’s shares has been set at $59.53.