Stock analysis · Bull Rankings model

LUV analysis

Southwest Airlines Co.Airlines. Scored on the same transparent model behind the daily rankings.

Airlines & Travel
LUV
Southwest Airlines Co. · Airlines
FCF-$455mF
Rev+9.5%B
D/E0.97C+
P/S0.7xA-
PEG0.38A
54.4Score
$44.90$22.0B
1Y Target$51.79Analyst consensus · 23 analysts
5Y Target$90.58Compound horizon
10Y Target$161.88Long-dated conviction
FCF-$455mTTM
F
FCF is negative (-$455m) — cash-burning phase; acceptable only for pre-profit spec names
Rev+9.5%TTM YoY
B
Revenue +9.5% — at or above S&P median
D/E0.97
C+
D/E 0.97 — above the Industrials debt median (≈75th pctile)
P/S0.7x
A-
P/S 0.7x — cheaper than most Industrials peers (≈25th pctile)
PEG0.38
A
PEG 0.38 — exceptional; paying well under fair value for growth

Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.

Quality-growth score · 54.4
Quality0.53
Growth0.50
Value0.61
Why this score
  • Buying back stock
  • Cyclical growth
Entry · Margin of safety
52-week rangeMid-range
19% off the 12-month high
Quality signals · context only
ROIC8.3% · Breturn on invested capital — not score-weighted

Model-generatedGenerated by the Bull Rankings model from this company's reported fundamentals, and checked against the figures shown above.

Why now
Airlines · market cap $22.0b. 19% off the 52-week high of $55.11. PEG 0.38 — paying under fair value for the growth rate. 23 sell-side analysts rate this a Hold with a mean 1-yr target of $51.79 (implying +15% upside).
Moat
ROE 12% meets the long-run market sustainable threshold — solid but not differentiated; the durability comes from elsewhere.
Risk
Free cash flow is negative (-$455m) — capital raises or debt issuance likely required; dilution / leverage risk. Net margin 2.8% is thin — operating leverage cuts both ways; input-cost inflation or pricing pressure hits the bottom line first.
Horizon
1-3 yr $51.79 (23-analyst consensus) — catalyst-driven; binary events dominate. 5 yr $90.58 — requires the platform / technology to reach commercial scale. 10 yr $161.88 — return distribution heavily skewed.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.

LUV vs the Top Picks average

PillarLUVBook avgDiff
Quality0.530.83-0.31
Growth0.500.92-0.42
Value0.610.75-0.14

Averaged across the 30 names in today's Top Picks (mean score 82.4). A name can beat these averages and still be absent from the book — it also applies concentration limits.

Trend
-0.5 over 37 daily scores
From 54.9 (Jun 22) → 54.4 (now)

One point per daily model run. The range autoscales, so a flat-looking line can still hide 1–2 point moves — read the From → To values for the actual range.

Shares to buy
44
Position size
$1,976
4.0% of portfolio
Stop price
$33.67
25% below $44.90
$ at risk if stopped
$493.90
budget $500.00 · 1% of portfolio

Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.

Southwest Airlines Co. (LUV): score, valuation & FAQ

Southwest Airlines Co. (LUV) is a Airlines company that scores 54.4 out of 100 on the Bull Rankings quality-growth model — a middling reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

Its strongest graded signals are PEG (A) and P/S (A-), while FCF (F) rate weaker.

Is LUV a good stock to buy?

Bull Rankings scores LUV 54.4 out of 100 on its quality-growth model, which is a middling reading. That is driven by PEG (A) and P/S (A-). A score is a quantitative screen of Southwest Airlines Co.'s fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does LUV score 54.4 on Bull Rankings?

The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). LUV earns its highest marks on PEG (A) and P/S (A-), and is held back by FCF (F). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.

Is LUV overvalued or undervalued?

We don't compute a reliable discounted-cash-flow value for LUV — typically because it is not yet consistently profitable or free-cash-flow positive — so its valuation rests on growth and price-to-sales rather than on earnings-based intrinsic value. Judge it on the trajectory of the business, not a single multiple.

What are the main risks of investing in LUV?

Free cash flow is negative (-$455m) — capital raises or debt issuance likely required; dilution / leverage risk. Net margin 2.8% is thin — operating leverage cuts both ways; input-cost inflation or pricing pressure hits the bottom line first.

New to these metrics? The guides explain free cash flow, how the score works, and more in the learn hub — or run another name through the screener.

Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial adviser.

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