WallStSmart

Southwest Airlines Company (LUV)vsNorthrop Grumman Corporation (NOC)

VS

Smart Verdict

WallStSmart Research — data-driven comparison

Northrop Grumman Corporation generates 49% more annual revenue ($41.95B vs $28.06B). NOC leads profitability with a 10.0% profit margin vs 1.6%. LUV appears more attractively valued with a PEG of 0.19. LUV earns a higher WallStSmart Score of 63/100 (C+).

LUV

Buy

63

out of 100

Grade: C+

Growth: 7.3Profit: 4.5Value: 5.3Quality: 5.5
Piotroski: 6/9Altman Z: 1.84

NOC

Buy

56

out of 100

Grade: C

Growth: 6.0Profit: 7.5Value: 5.3Quality: 4.5
Piotroski: 3/9Altman Z: 1.96
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

LUVSignificantly Overvalued (-39.1%)

Margin of Safety

-39.1%

Fair Value

$36.97

Current Price

$37.36

$0.39 premium

UndervaluedFair: $36.97Overvalued
NOCUndervalued (+24.9%)

Margin of Safety

+24.9%

Fair Value

$904.35

Current Price

$679.00

$225.35 discount

UndervaluedFair: $904.35Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

LUV3 strengths · Avg: 9.3/10
PEG RatioValuation
0.1910/10

Growing faster than its price suggests

EPS GrowthGrowth
50.8%10/10

Earnings expanding 50.8% YoY

Price/BookValuation
2.4x8/10

Reasonable price relative to book value

NOC3 strengths · Avg: 8.7/10
Market CapQuality
$96.91B9/10

Large-cap with strong market position

Return on EquityProfitability
26.2%9/10

Every $100 of equity generates 26 in profit

Free Cash FlowQuality
$3.23B8/10

Generating 3.2B in free cash flow

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
47.3x2/10

Premium valuation, high expectations priced in

NOC4 concerns · Avg: 3.0/10
Altman Z-ScoreHealth
1.964/10

Grey zone — moderate risk

Debt/EquityHealth
1.183/10

Elevated debt levels

Piotroski F-ScoreQuality
3/93/10

Weak financial health signals

PEG RatioValuation
5.152/10

Expensive relative to growth rate

Comparative Analysis Report

WallStSmart Research

Bull Case : LUV

The strongest argument for LUV centers on PEG Ratio, EPS Growth, Price/Book. PEG of 0.19 suggests the stock is reasonably priced for its growth.

Bull Case : NOC

The strongest argument for NOC centers on Market Cap, Return on Equity, Free Cash Flow.

Bear Case : LUV

The primary concerns for LUV are Altman Z-Score, Return on Equity, Profit Margin. A P/E of 47.3x leaves little room for execution misses. Thin 1.6% margins leave little buffer for downturns.

Bear Case : NOC

The primary concerns for NOC are Altman Z-Score, Debt/Equity, Piotroski F-Score.

Key Dynamics to Monitor

LUV carries more volatility with a beta of 1.09 — expect wider price swings.

NOC is growing revenue faster at 9.6% — sustainability is the question.

NOC generates stronger free cash flow (3.2B), providing more financial flexibility.

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

Bottom Line

LUV scores higher overall (63/100 vs 56/100). NOC offers better value entry with a 24.9% 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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Northrop Grumman Corporation

INDUSTRIALS · AEROSPACE & DEFENSE · USA

Northrop Grumman Corporation (NYSE: NOC) is an American multinational aerospace and defense technology company.

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