WallStSmart

Southwest Airlines Company (LUV)vsUnited Airlines Holdings Inc (UAL)

VS

Smart Verdict

WallStSmart Research — data-driven comparison

United Airlines Holdings Inc generates 110% more annual revenue ($59.07B vs $28.06B). UAL leads profitability with a 5.7% profit margin vs 1.6%. LUV appears more attractively valued with a PEG of 0.20. LUV earns a higher WallStSmart Score of 63/100 (C+).

LUV

Buy

63

out of 100

Grade: C+

Growth: 7.3Profit: 4.5Value: 4.7Quality: 6.5
Piotroski: 6/9Altman Z: 1.84

UAL

Buy

60

out of 100

Grade: C

Growth: 5.3Profit: 6.0Value: 7.3Quality: 4.0
Piotroski: 6/9Altman Z: 1.16
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

LUVSignificantly Overvalued (-39.1%)

Margin of Safety

-39.1%

Fair Value

$36.97

Current Price

$39.41

$2.44 premium

UndervaluedFair: $36.97Overvalued
UALUndervalued (+43.5%)

Margin of Safety

+43.5%

Fair Value

$201.55

Current Price

$89.95

$111.60 discount

UndervaluedFair: $201.55Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

LUV3 strengths · Avg: 9.3/10
PEG RatioValuation
0.2010/10

Growing faster than its price suggests

EPS GrowthGrowth
50.8%10/10

Earnings expanding 50.8% YoY

Price/BookValuation
2.5x8/10

Reasonable price relative to book value

UAL3 strengths · Avg: 9.0/10
P/E RatioValuation
8.8x10/10

Attractively priced relative to earnings

Return on EquityProfitability
24.0%9/10

Every $100 of equity generates 24 in profit

Price/BookValuation
1.9x8/10

Reasonable price relative to book value

Areas to Watch

LUV4 concerns · Avg: 3.0/10
Altman Z-ScoreHealth
1.844/10

Grey zone — moderate risk

Return on EquityProfitability
4.8%3/10

ROE of 4.8% — below average capital efficiency

Profit MarginProfitability
1.6%3/10

1.6% margin — thin

P/E RatioValuation
50.9x2/10

Premium valuation, high expectations priced in

UAL4 concerns · Avg: 2.8/10
Revenue GrowthGrowth
4.8%4/10

4.8% revenue growth

Profit MarginProfitability
5.7%3/10

5.7% margin — thin

PEG RatioValuation
5.952/10

Expensive relative to growth rate

Free Cash FlowQuality
$-604.00M2/10

Negative free cash flow — burning cash

Comparative Analysis Report

WallStSmart Research

Bull Case : LUV

The strongest argument for LUV centers on PEG Ratio, EPS Growth, Price/Book. PEG of 0.20 suggests the stock is reasonably priced for its growth.

Bull Case : UAL

The strongest argument for UAL centers on P/E Ratio, Return on Equity, Price/Book.

Bear Case : LUV

The primary concerns for LUV are Altman Z-Score, Return on Equity, Profit Margin. A P/E of 50.9x leaves little room for execution misses. Thin 1.6% margins leave little buffer for downturns.

Bear Case : UAL

The primary concerns for UAL are Revenue Growth, Profit Margin, PEG Ratio. Debt-to-equity of 2.39 is elevated, increasing financial risk.

Key Dynamics to Monitor

UAL carries more volatility with a beta of 1.25 — expect wider price swings.

LUV is growing revenue faster at 7.4% — sustainability is the question.

LUV generates stronger free cash flow (-564M), providing more financial flexibility.

Monitor AIRLINES industry trends, competitive dynamics, and regulatory changes.

Bottom Line

LUV scores higher overall (63/100 vs 60/100). UAL offers better value entry with a 43.5% margin of safety. Both earn "Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.

This analysis is generated from publicly available financial data. Not financial advice.

Southwest Airlines Company

INDUSTRIALS · AIRLINES · USA

Southwest Airlines Co., typically referred to as Southwest, is one of the major airlines of the United States and the world's largest low-cost carrier airline. It is headquartered in Dallas, Texas.

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United Airlines Holdings Inc

INDUSTRIALS · AIRLINES · USA

United Airlines Holdings, Inc. (formerly known as United Continental Holdings, Inc., UAL Corporation, Allegis Corporation and founded originally as UAL, Inc.) is a publicly traded airline holding company headquartered in the Willis Tower in Chicago. UAH owns and operates United Airlines, Inc.

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