(LUV) Southwest Airlines - Overview
Stock: Flights, Loyalty, Digital, Ancillary
EPS (Earnings per Share)
Revenue
Dividends
| Dividend Yield | 2.18% |
| Yield on Cost 5y | 1.48% |
| Yield CAGR 5y | -10.56% |
| Payout Consistency | 87.8% |
| Payout Ratio | 46.8% |
| Risk 5d forecast | |
|---|---|
| Volatility | 44.5% |
| Relative Tail Risk | -14.5% |
| Reward TTM | |
|---|---|
| Sharpe Ratio | 1.39 |
| Alpha | 59.96 |
| Character TTM | |
|---|---|
| Beta | 1.337 |
| Beta Downside | 1.789 |
| Drawdowns 3y | |
|---|---|
| Max DD | 42.93% |
| CAGR/Max DD | 0.44 |
Description: LUV Southwest Airlines December 19, 2025
Southwest Airlines Co. (NYSE:LUV) is a U.S.-based passenger carrier that operates scheduled flights across 117 domestic and near-international destinations, serving 42 states, D.C., Puerto Rico, and ten Caribbean and Central American countries. Its fleet consists exclusively of 803 Boeing 737 aircraft, and the airline complements its core service with inflight entertainment, the Rapid Rewards loyalty program, digital booking platforms (website, mobile apps, and SWABIZ), and ancillary offerings such as EarlyBird Check-In, upgraded boarding, and pet or unaccompanied-minor transport.
Key performance indicators from the most recent fiscal year (2024) show Southwest generating approximately $27 billion in revenue, achieving a load factor of 84.2 % (above the industry average of ~80 %), and posting an operating margin of 12.5 % after accounting for fuel and labor cost pressures. The airline’s point-to-point network and single-aircraft type strategy continue to support high aircraft utilization (averaging ~11.5 flight hours per day per plane).
Primary economic drivers for Southwest include volatile jet-fuel prices (which historically account for ~30 % of operating costs), the pace of consumer discretionary spending on leisure travel, and the outcome of ongoing airline labor negotiations that can affect wage growth. Additionally, macro-level trends such as U.S. GDP growth and the strength of the domestic tourism sector directly influence passenger demand, while the airline’s low-cost model makes it relatively resilient to price-sensitive market shifts.
For a deeper, data-driven look at Southwest’s valuation and risk profile, you may find ValueRay’s analytical tools worth exploring.
Piotroski VR‑10 (Strict, 0-10) 6.0
| Net Income: 441.0m TTM > 0 and > 6% of Revenue |
| FCF/TA: -0.03 > 0.02 and ΔFCF/TA 1.94 > 1.0 |
| NWC/Revenue: -18.80% < 20% (prev -3.65%; Δ -15.15% < -1%) |
| CFO/TA 0.06 > 3% & CFO 1.84b > Net Income 441.0m |
| Net Debt (3.52b) to EBITDA (2.24b): 1.57 < 3 |
| Current Ratio: 0.52 > 1.5 & < 3 |
| Outstanding Shares: last quarter (521.0m) vs 12m ago -18.72% < -2% |
| Gross Margin: 17.44% > 18% (prev 0.16%; Δ 1728 % > 0.5%) |
| Asset Turnover: 89.36% > 50% (prev 81.43%; Δ 7.93% > 0%) |
| Interest Coverage Ratio: 5.94 > 6 (EBITDA TTM 2.24b / Interest Expense TTM 114.0m) |
Altman Z'' 1.65
| A: -0.18 (Total Current Assets 5.64b - Total Current Liabilities 10.92b) / Total Assets 29.06b |
| B: 0.56 (Retained Earnings 16.39b / Total Assets 29.06b) |
| C: 0.02 (EBIT TTM 677.0m / Avg Total Assets 31.41b) |
| D: 0.82 (Book Value of Equity 17.25b / Total Liabilities 21.08b) |
| Altman-Z'' Score: 1.65 = BB |
Beneish M -3.01
| DSRI: 1.01 (Receivables 1.15b/1.11b, Revenue 28.06b/27.48b) |
| GMI: 0.93 (GM 17.44% / 16.23%) |
| AQI: 1.18 (AQ_t 0.07 / AQ_t-1 0.06) |
| SGI: 1.02 (Revenue 28.06b / 27.48b) |
| TATA: -0.05 (NI 441.0m - CFO 1.84b) / TA 29.06b) |
| Beneish M-Score: -3.01 (Cap -4..+1) = AA |
What is the price of LUV shares?
Over the past week, the price has changed by +14.18%, over one month by +27.73%, over three months by +72.95% and over the past year by +78.34%.
Is LUV a buy, sell or hold?
- StrongBuy: 4
- Buy: 2
- Hold: 11
- Sell: 4
- StrongSell: 3
What are the forecasts/targets for the LUV price?
| Issuer | Target | Up/Down from current |
|---|---|---|
| Wallstreet Target Price | 43.5 | -19.9% |
| Analysts Target Price | 43.5 | -19.9% |
| ValueRay Target Price | 60.6 | 11.7% |
LUV Fundamental Data Overview January 31, 2026
P/E Forward = 17.762
P/S = 0.9077
P/B = 3.1427
P/EG = 0.3236
Revenue TTM = 28.06b USD
EBIT TTM = 677.0m USD
EBITDA TTM = 2.24b USD
Long Term Debt = 4.08b USD (from longTermDebt, two quarters ago)
Short Term Debt = 636.0m USD (from shortTermDebt, last quarter)
Debt = 6.75b USD (from shortLongTermDebtTotal, last quarter)
Net Debt = 3.52b USD (from netDebt column, last quarter)
Enterprise Value = 28.99b USD (25.47b + Debt 6.75b - CCE 3.23b)
Interest Coverage Ratio = 5.94 (Ebit TTM 677.0m / Interest Expense TTM 114.0m)
EV/FCF = -34.93x (Enterprise Value 28.99b / FCF TTM -830.0m)
FCF Yield = -2.86% (FCF TTM -830.0m / Enterprise Value 28.99b)
FCF Margin = -2.96% (FCF TTM -830.0m / Revenue TTM 28.06b)
Net Margin = 1.57% (Net Income TTM 441.0m / Revenue TTM 28.06b)
Gross Margin = 17.44% ((Revenue TTM 28.06b - Cost of Revenue TTM 23.17b) / Revenue TTM)
Gross Margin QoQ = 20.30% (prev 16.66%)
Tobins Q-Ratio = 1.00 (Enterprise Value 28.99b / Total Assets 29.06b)
Interest Expense / Debt = 0.46% (Interest Expense 31.0m / Debt 6.75b)
Taxrate = 20.64% (84.0m / 407.0m)
NOPAT = 537.3m (EBIT 677.0m * (1 - 20.64%))
Current Ratio = 0.52 (Total Current Assets 5.64b / Total Current Liabilities 10.92b)
Debt / Equity = 0.85 (Debt 6.75b / totalStockholderEquity, last quarter 7.98b)
Debt / EBITDA = 1.57 (Net Debt 3.52b / EBITDA 2.24b)
Debt / FCF = -4.24 (negative FCF - burning cash) (Net Debt 3.52b / FCF TTM -830.0m)
Total Stockholder Equity = 8.28b (last 4 quarters mean from totalStockholderEquity)
RoA = 1.40% (Net Income 441.0m / Total Assets 29.06b)
RoE = 5.33% (Net Income TTM 441.0m / Total Stockholder Equity 8.28b)
RoCE = 5.48% (EBIT 677.0m / Capital Employed (Equity 8.28b + L.T.Debt 4.08b))
RoIC = 4.03% (NOPAT 537.3m / Invested Capital 13.35b)
WACC = 8.65% (E(25.47b)/V(32.22b) * Re(10.84%) + D(6.75b)/V(32.22b) * Rd(0.46%) * (1-Tc(0.21)))
Discount Rate = 10.84% (= CAPM, Blume Beta Adj.)
Shares Correlation 3-Years: -33.33 | Cagr: -6.50%
Fair Price DCF = unknown (Cash Flow -830.0m)
EPS Correlation: 4.67 | EPS CAGR: 85.68% | SUE: 0.10 | # QB: 0
Revenue Correlation: 66.89 | Revenue CAGR: 13.08% | SUE: -0.80 | # QB: 0
EPS next Quarter (2026-03-31): EPS=0.41 | Chg30d=+0.192 | Revisions Net=+6 | Analysts=16
EPS current Year (2026-12-31): EPS=3.75 | Chg30d=+0.873 | Revisions Net=+16 | Growth EPS=+303.5% | Growth Revenue=+10.6%
EPS next Year (2027-12-31): EPS=4.32 | Chg30d=+0.746 | Revisions Net=+8 | Growth EPS=+15.2% | Growth Revenue=+4.9%