Southwest Gas Holdings, Inc. Fundamental Analysis (NYSE: SWX)
Southwest Gas Holdings, Inc. (NYSE: SWX) shows moderate financial fundamentals with a PE ratio of 12.82, profit margin of 29.83%, and ROE of 12.89%. The company generates $1.7B in annual revenue with weak year-over-year growth of -62.05%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -34.2/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SWX's fundamental strength across five key dimensions:
Efficiency Score
WeakSWX struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSWX trades at attractive valuation levels.
Growth Score
WeakSWX faces weak or negative growth trends.
Financial Health Score
ExcellentSWX maintains a strong and stable balance sheet.
Profitability Score
WeakSWX struggles to sustain strong margins.
Key Financial Metrics
Is SWX Expensive or Cheap?
P/E Ratio
SWX trades at 12.82 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, SWX's PEG of 0.08 indicates potential undervaluation.
Price to Book
The market values Southwest Gas Holdings, Inc. at 1.62 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 3.90 times EBITDA. This is generally considered low.
How Well Does SWX Make Money?
Net Profit Margin
For every $100 in sales, Southwest Gas Holdings, Inc. keeps $29.83 as profit after all expenses.
Operating Margin
Core operations generate 28.68 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.89 in profit for every $100 of shareholder equity.
ROA
Southwest Gas Holdings, Inc. generates $4.96 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Southwest Gas Holdings, Inc. generates strong operating cash flow of $456.69M, reflecting robust business health.
Free Cash Flow
Southwest Gas Holdings, Inc. generates weak or negative free cash flow of $-827.77M, restricting financial flexibility.
FCF Per Share
Each share generates $-11.44 in free cash annually.
FCF Yield
SWX converts -12.46% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.82
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.08
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.62
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.83
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.85
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.12
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.13
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How SWX Stacks Against Its Sector Peers
| Metric | SWX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.82 | 20.26 | Better (Cheaper) |
| ROE | 12.89% | 1019.00% | Weak |
| Net Margin | 29.83% | -658.00% (disorted) | Strong |
| Debt/Equity | 0.85 | 1.64 | Strong (Low Leverage) |
| Current Ratio | 1.12 | 1.70 | Neutral |
| ROA | 4.96% | 4578088.00% | Weak |
SWX outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Southwest Gas Holdings, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-54.36%
Industry Style: Defensive, Dividend, Income
DecliningEPS CAGR
46.91%
Industry Style: Defensive, Dividend, Income
High GrowthFCF CAGR
-31.08%
Industry Style: Defensive, Dividend, Income
Declining