Comparing Southwest Airlines (NYSE:LUV) and EHang (NYSE:EH)

Southwest Airlines (NYSE:LUV) and EHang (NASDAQ:EH) are both transportation companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Valuation and Earnings

This table compares Southwest Airlines and EHang’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southwest Airlines $22.43 billion 0.95 $2.30 billion $4.27 9.66
EHang $17.50 million 33.97 -$65.24 million ($1.23) -9.11

Southwest Airlines has higher revenue and earnings than EHang. EHang is trading at a lower price-to-earnings ratio than Southwest Airlines, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Southwest Airlines and EHang’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southwest Airlines 10.26% 23.31% 8.75%
EHang N/A N/A N/A

Insider & Institutional Ownership

85.8% of Southwest Airlines shares are held by institutional investors. Comparatively, 0.1% of EHang shares are held by institutional investors. 0.3% of Southwest Airlines shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Southwest Airlines and EHang, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southwest Airlines 1 10 8 1 2.45
EHang 0 0 1 0 3.00

Southwest Airlines presently has a consensus target price of $53.94, suggesting a potential upside of 30.84%. EHang has a consensus target price of $14.00, suggesting a potential upside of 24.89%. Given Southwest Airlines’ higher possible upside, analysts plainly believe Southwest Airlines is more favorable than EHang.

Summary

Southwest Airlines beats EHang on 12 of the 14 factors compared between the two stocks.

About Southwest Airlines

Southwest Airlines Co. operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2018, the company operated a total of 750 Boeing 737 aircraft; and served 99 destinations in 40 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as 10 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 offers inflight entertainment and connectivity service on Wi-Fi enabled aircraft; and sells points and related services to business partners participating in the Rapid Rewards loyalty program, such as car rental agencies, hotels, restaurants, and retailers. In addition, the company provides a suite of digital platforms to support customers' needs across the travel journey, including Southwest.com, mobile.southwest.com, an iOS app, and an android app; and Swabiz.com, a Website for business customers that offer businesses shared stored company credit cards, company activity reporting, and centralized traveler management services. Southwest Airlines Co. was founded in 1967 and is based in Dallas, Texas.

About EHang

EHang Holdings Limited operates as an autonomous aerial vehicle (AAV) technology platform company. It designs, develops, manufactures, sells, and operates AAVs, as well as their supporting systems and infrastructure for a range of industries and applications, including passenger transportation, logistics, smart city management, and aerial media solutions. The company was incorporated in 2014 and is headquartered in Guangzhou, the People's Republic of China.

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