(LUV) Southwest Airlines - Overview
Sector: Industrials | Industry: Airlines | Exchange: NYSE (USA) | Market Cap: 19.971m USD | Total Return: 34.3% in 12m
Avg Turnover: 287M
EPS Trend: 14.3%
Qual. Beats: 0
Rev. Trend: 94.4%
Qual. Beats: 0
Warnings
No concerns identified
Tailwinds
No distinct edge detected
Southwest Airlines Co. (LUV) is a major passenger carrier providing scheduled air transportation across 117 destinations in the United States and ten near-international markets. The company utilizes a point-to-point service model, which differs from the traditional hub-and-spoke systems used by legacy carriers to reduce connection times and aircraft turnaround delays. Its fleet is uniquely standardized on the Boeing 737 airframe, a strategy designed to minimize maintenance costs and simplify pilot training.
Revenue streams include passenger tickets, the Rapid Rewards loyalty program, and ancillary services such as upgraded boarding and pet transportation. The airline also operates SWABIZ for corporate booking and provides a digital inflight entertainment platform. Within the highly competitive passenger airline sector, fuel prices and labor contracts remain the primary drivers of operating expenses.
Investors can evaluate the company’s long-term valuation trends by reviewing the data on ValueRay. Founded in 1967 and headquartered in Dallas, Texas, Southwest maintains a significant market presence in the low-cost carrier segment while expanding its international footprint in the Caribbean and Central America.
- Boeing 737 MAX delivery delays constrain seat capacity and fleet modernization plans
- Volatility in jet fuel prices directly impacts operating margins and quarterly earnings
- Labor negotiations and union contract renewals increase long-term structural operating costs
- Point-to-point domestic flight demand dictates core passenger revenue and load factors
- Expansion of ancillary services and loyalty program fees drives high-margin revenue growth
| Net Income: 817.0m TTM > 0 and > 6% of Revenue |
| FCF/TA: -0.01 > 0.02 and ΔFCF/TA 0.33 > 1.0 |
| NWC/Revenue: -22.56% < 20% (prev -11.48%; Δ -11.07% < -1%) |
| CFO/TA 0.08 > 3% & CFO 2.40b > Net Income 817.0m |
| Net Debt (4.08b) to EBITDA (2.73b): 1.50 < 3 |
| Current Ratio: 0.48 > 1.5 & < 3 |
| Outstanding Shares: last quarter (503.0m) vs 12m ago -13.87% < -2% |
| Gross Margin: 16.46% > 18% (prev 0.17%; Δ 1.63k% > 0.5%) |
| Asset Turnover: 92.33% > 50% (prev 83.05%; Δ 9.28% > 0%) |
| Interest Coverage Ratio: 9.62 > 6 (EBITDA TTM 2.73b / Interest Expense TTM 121.0m) |
| A: -0.22 (Total Current Assets 5.97b - Total Current Liabilities 12.5b) / Total Assets 29.4b |
| B: 0.56 (Retained Earnings 16.5b / Total Assets 29.4b) |
| C: 0.04 (EBIT TTM 1.16b / Avg Total Assets 31.3b) |
| D: 0.77 (Book Value of Equity 17.4b / Total Liabilities 22.5b) |
| Altman-Z'' = 1.44 = BB |
| DSRI: 1.11 (Receivables 1.25b/1.08b, Revenue 28.9b/27.6b) |
| GMI: 1.04 (GM 16.46% / 17.05%) |
| AQI: 1.69 (AQ_t 0.10 / AQ_t-1 0.06) |
| SGI: 1.05 (Revenue 28.9b / 27.6b) |
| TATA: -0.05 (NI 817.0m - CFO 2.40b) / TA 29.4b) |
| Beneish M = -2.52 (Cap -4..+1) = A |
As of May 29, 2026, the stock is trading at USD 43.31 with a total of 8,302,333 shares traded.
Over the past week, the price has changed by +9.09%,
over one month by +13.94%,
over three months by -11.70% and
over the past year by +34.34%.
Southwest Airlines has received a consensus analysts rating of 3.00. Therefore, it is recommended to hold LUV.
- StrongBuy: 4
- Buy: 2
- Hold: 11
- Sell: 4
- StrongSell: 3
| Analysts Target Price | 45.3 | 4.5% |
P/E Trailing = 27.24
P/E Forward = 13.0548
P/S = 0.6914
P/B = 2.8992
P/EG = 0.2771
Revenue TTM = 28.9b USD
EBIT TTM = 1.16b USD
EBITDA TTM = 2.73b USD
Long Term Debt = 4.54b USD (from longTermDebt, last quarter)
Short Term Debt = 1.15b USD (from shortTermDebt, last quarter)
Debt = 7.41b USD (from shortLongTermDebtTotal, last quarter) + Leases 1.01b
Net Debt = 4.08b USD (calculated: Debt 7.41b - CCE 3.33b)
Enterprise Value = 24.0b USD (20.0b + Debt 7.41b - CCE 3.33b)
Interest Coverage Ratio = 9.62 (Ebit TTM 1.16b / Interest Expense TTM 121.0m)
EV/FCF = -59.97x (Enterprise Value 24.0b / FCF TTM -401.0m)
FCF Yield = -1.67% (FCF TTM -401.0m / Enterprise Value 24.0b)
FCF Margin = -1.39% (FCF TTM -401.0m / Revenue TTM 28.9b)
Net Margin = 2.83% (Net Income TTM 817.0m / Revenue TTM 28.9b)
Gross Margin = 16.46% ((Revenue TTM 28.9b - Cost of Revenue TTM 24.1b) / Revenue TTM)
Gross Margin QoQ = 10.04% (prev 20.30%)
Tobins Q-Ratio = 0.82 (Enterprise Value 24.0b / Total Assets 29.4b)
Interest Expense / Debt = 1.63% (Interest Expense 121.0m / Debt 7.41b)
Taxrate = 20.35% (58.0m / 285.0m)
NOPAT = 927.1m (EBIT 1.16b * (1 - 20.35%))
Current Ratio = 0.48 (Total Current Assets 5.97b / Total Current Liabilities 12.5b)
Debt / Equity = 1.08 (Debt 7.41b / totalStockholderEquity, last quarter 6.88b)
Debt / EBITDA = 1.50 (Net Debt 4.08b / EBITDA 2.73b)
Debt / FCF = -10.17 (negative FCF - burning cash) (Net Debt 4.08b / FCF TTM -401.0m)
Total Stockholder Equity = 7.66b (last 4 quarters mean from totalStockholderEquity)
RoA = 2.61% (Net Income 817.0m / Total Assets 29.4b)
RoE = 10.67% (Net Income TTM 817.0m / Total Stockholder Equity 7.66b)
RoCE = 9.55% (EBIT 1.16b / Capital Employed (Equity 7.66b + L.T.Debt 4.54b))
RoIC = 5.32% (NOPAT 927.1m / Invested Capital 17.4b)
WACC = 7.41% (E(20.0b)/V(27.4b) * Re(9.68%) + D(7.41b)/V(27.4b) * Rd(1.63%) * (1-Tc(0.20)))
Discount Rate = 9.68% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -64.44 | Cagr: -7.26%
[DCF] Fair Price = unknown (Cash Flow -401.0m)
EPS Correlation: 14.34 | EPS CAGR: 4.03% | SUE: -0.26 | # QB: 0
Revenue Correlation: 94.42 | Revenue CAGR: 4.28% | SUE: -0.37 | # QB: 0
EPS current Quarter (2026-06-30): EPS=0.44 | Chg30d=-25.85% | Revisions=-33% | Analysts=20
EPS next Quarter (2026-09-30): EPS=0.54 | Chg30d=-16.91% | Revisions=-29% | Analysts=19
EPS current Year (2026-12-31): EPS=2.65 | Chg30d=-16.27% | Revisions=-73% | GrowthEPS=+184.7% | GrowthRev=+16.5%
EPS next Year (2027-12-31): EPS=4.51 | Chg30d=-0.25% | Revisions=-14% | GrowthEPS=+70.4% | GrowthRev=+3.0%
[Analyst] Revisions Ratio: -73%