For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.
Based in Dallas, TX, Southwest Airlines is a passenger airline that provides scheduled air transportation in the United States and 'ten near-international' markets. The company was incorporated in Texas in 1967 and commenced operations in 1971 with three Boeing 737 jets serving the cities of Dallas, Houston and San Antonio.
LUV sits at a Zacks Rank #3 (Hold), holds a Value Style Score of B, and has a VGM Score of B. Compared to the Transportation - Airline industry's P/E of 8.4X, shares of Southwest Airlines are trading at a forward P/E of 19.5X. LUV also has a PEG Ratio of 0.6, a Price/Cash Flow ratio of 8.4X, and a Price/Sales ratio of 0.7X.
Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Eight analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.05 to $1.63 per share. LUV has an average earnings surprise of 58.6%.
LUV should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.
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Southwest Airlines Co. (LUV) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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