Air Transportation, Scheduled
Southwest Airlines Co. operates as a passenger airline company that provide scheduled air transportation services in the United States and near-international markets. As of December 31, 2022, the company operated a total fleet of 770 Boeing 737 aircrafts; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. It also provides inflight entertainment portal and connectivity services on Wi-Fi enabled aircrafts; and Rapid Rewards loyalty program that enables program members to earn points for dollars spent on Southwest base fares. In addition, the company offers a suite of digital platforms to support customers' travel needs, including websites and apps; and SWABIZ, an online booking tool. Further, it provides ancillary services, such as Southwest's EarlyBird Check-In, upgraded boarding, and transportation of pets and unaccompanied minors. The company was incorporated in 1967 and is headquartered in Dallas, Texas.
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 11% | 11% | 16% | 11% | 10% | -34% | 6.2% | -13% | 1.8% | 1.5% |
ROA | 19% | 16% | 14% | 13% | 12% | -11% | 4.7% | 2.9% | 1.7% | 1.5% |
ROE | 30% | 27% | 33% | 25% | 23% | -35% | 9.4% | -29% | 4.4% | 3.9% |
The average Net Margin over the past 5 years is -2.91%.
The trend of Net Margin over the past 5 years is -2.19%.
The average ROA over the past 5 years is +3.79%.
The trend of ROA over the past 5 years is -1.87%.
The average ROE over the past 5 years is -0.2%.
The trend of ROE over the past 5 years is -6.16%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 2.65 | 1.50 | 2.03 | 1.14 | 0.90 | -6.46 | 6.17 | -60.84 | -22.62 | -11.38 |
Debt Equity | 0.43 | 0.40 | 0.35 | 0.34 | 0.27 | 1.19 | 1.08 | 0.76 | 0.77 | 0.78 |
MIN | ||||||||||
Graham Stability | - | - | 100% | 93% | 84% | -110% | 100% | -4.5K% | - | -4.5K% |
The Debt/FCF trailing twelve month is -11.38.
The trend of Debt/FCF over the past 5 years is -8.33.
Graham’s Stability measure stands at -45.43.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
---|---|---|---|---|---|
Revenue | 3.6% | 3.5% | 42% | 9.6% | 3.9% |
Net Income | -20% | -28% | - | - | -23% |
Stockholders Equity | 3.2% | 1.3% | 5.8% | -1.6% | -1.6% |
FCF | - | - | - | - | -3.2% |
The Revenue CAGR over the past 5 years is +3.5%.
The trend of Revenue growth rate over the past 5 years is +3.9%.
The Earnings CAGR over the past 5 years is -28.36%.
The trend of Earnings growth rate over the past 5 years is -22.96%.
The Equity CAGR over the past 5 years is +1.31%.
The trend of Equity growth rate over the past 5 years is -1.56%.
The FCF CAGR over the past 5 years is -.
The trend of FCF growth rate over the past 5 years is -3.21%.