SOUTHWEST AIRLINES CO (LUV) Stock Fundamental Analysis

NYSE:LUV • US8447411088

52.09 USD
+0.01 (+0.02%)
At close: Feb 20, 2026
52 USD
-0.09 (-0.17%)
After Hours: 2/20/2026, 8:04:00 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Analyst Ratings Earnings Estimates Financials Ownership News
Fundamental Rating

5

Taking everything into account, LUV scores 5 out of 10 in our fundamental rating. LUV was compared to 22 industry peers in the Passenger Airlines industry. Both the profitability and the financial health of LUV get a neutral evaluation. Nothing too spectacular is happening here. LUV is not valued too expensively and it also shows a decent growth rate.


Dividend Valuation Growth Profitability Health

6

1. Profitability

1.1 Basic Checks

  • In the past year LUV was profitable.
  • LUV had a positive operating cash flow in the past year.
  • In the past 5 years LUV has always been profitable.
  • In the past 5 years LUV always reported a positive cash flow from operatings.
LUV Yearly Net Income VS EBIT VS OCF VS FCFLUV Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 2B -2B 4B -4B

1.2 Ratios

  • The Return On Assets of LUV (1.52%) is better than 68.18% of its industry peers.
  • The Return On Equity of LUV (5.53%) is better than 68.18% of its industry peers.
  • With a Return On Invested Capital value of 1.84%, LUV perfoms like the industry average, outperforming 45.45% of the companies in the same industry.
  • Measured over the past 3 years, the Average Return On Invested Capital for LUV is significantly below the industry average of 20.66%.
  • The 3 year average ROIC (1.36%) for LUV is below the current ROIC(1.84%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 1.52%
ROE 5.53%
ROIC 1.84%
ROA(3y)1.39%
ROA(5y)1.68%
ROE(3y)4.81%
ROE(5y)5.77%
ROIC(3y)1.36%
ROIC(5y)N/A
LUV Yearly ROA, ROE, ROICLUV Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20 -20

1.3 Margins

  • LUV's Profit Margin of 1.57% is fine compared to the rest of the industry. LUV outperforms 68.18% of its industry peers.
  • In the last couple of years the Profit Margin of LUV has declined.
  • The Operating Margin of LUV (1.53%) is comparable to the rest of the industry.
  • LUV's Operating Margin has declined in the last couple of years.
  • LUV's Gross Margin of 73.57% is amongst the best of the industry. LUV outperforms 100.00% of its industry peers.
  • LUV's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 1.53%
PM (TTM) 1.57%
GM 73.57%
OM growth 3Y-29.69%
OM growth 5YN/A
PM growth 3Y-11.45%
PM growth 5YN/A
GM growth 3Y2.37%
GM growth 5Y2.24%
LUV Yearly Profit, Operating, Gross MarginsLUV Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20 -20 40 -40 60

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ROAROEROICOperating and Profit MarginShow most profitable peers

4

2. Health

2.1 Basic Checks

  • LUV has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
  • Compared to 1 year ago, LUV has less shares outstanding
  • Compared to 5 years ago, LUV has less shares outstanding
  • Compared to 1 year ago, LUV has an improved debt to assets ratio.
LUV Yearly Shares OutstandingLUV Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M
LUV Yearly Total Debt VS Total AssetsLUV Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10B 20B 30B

2.2 Solvency

  • An Altman-Z score of 2.31 indicates that LUV is not a great score, but indicates only limited risk for bankruptcy at the moment.
  • The Altman-Z score of LUV (2.31) is better than 81.82% of its industry peers.
  • A Debt/Equity ratio of 0.57 indicates that LUV is somewhat dependend on debt financing.
  • Looking at the Debt to Equity ratio, with a value of 0.57, LUV belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.57
Debt/FCF N/A
Altman-Z 2.31
ROIC/WACC0.21
WACC8.94%
LUV Yearly LT Debt VS Equity VS FCFLUV Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 2B 4B 6B 8B 10B

2.3 Liquidity

  • LUV has a Current Ratio of 0.52. This is a bad value and indicates that LUV is not financially healthy enough and could expect problems in meeting its short term obligations.
  • LUV's Current ratio of 0.52 is in line compared to the rest of the industry. LUV outperforms 40.91% of its industry peers.
  • A Quick Ratio of 0.45 indicates that LUV may have some problems paying its short term obligations.
  • LUV's Quick ratio of 0.45 is in line compared to the rest of the industry. LUV outperforms 40.91% of its industry peers.
Industry RankSector Rank
Current Ratio 0.52
Quick Ratio 0.45
LUV Yearly Current Assets VS Current LiabilitesLUV Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. Growth

3.1 Past

  • The Earnings Per Share has been growing slightly by 6.45% over the past year.
  • Measured over the past years, LUV shows a decrease in Earnings Per Share. The EPS has been decreasing by -3.45% on average per year.
  • Looking at the last year, LUV shows a small growth in Revenue. The Revenue has grown by 2.11% in the last year.
  • The Revenue has been growing by 25.41% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)6.45%
EPS 3Y-3.45%
EPS 5YN/A
EPS Q2Q%3.57%
Revenue 1Y (TTM)2.11%
Revenue growth 3Y5.63%
Revenue growth 5Y25.41%
Sales Q2Q%5.61%

3.2 Future

  • LUV is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 47.38% yearly.
  • LUV is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.37% yearly.
EPS Next Y323.46%
EPS Next 2Y126.78%
EPS Next 3Y77.99%
EPS Next 5Y47.38%
Revenue Next Year12.81%
Revenue Next 2Y8.8%
Revenue Next 3Y7.22%
Revenue Next 5Y6.37%

3.3 Evolution

  • The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
LUV Yearly Revenue VS EstimatesLUV Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 10B 20B 30B
LUV Yearly EPS VS EstimatesLUV Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0 2 -2 4 -4 6 -6

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Find the best growth stocksShow best growing peers

5

4. Valuation

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 52.62, the valuation of LUV can be described as expensive.
  • The rest of the industry has a similar Price/Earnings ratio as LUV.
  • Compared to an average S&P500 Price/Earnings ratio of 26.99, LUV is valued quite expensively.
  • With a Price/Forward Earnings ratio of 12.43, LUV is valued correctly.
  • Based on the Price/Forward Earnings ratio, LUV is valued a bit cheaper than 63.64% of the companies in the same industry.
  • The average S&P500 Price/Forward Earnings ratio is at 28.06. LUV is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 52.62
Fwd PE 12.43
LUV Price Earnings VS Forward Price EarningsLUV Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 50 100 150

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, LUV is valued a bit cheaper than 72.73% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 13.71
LUV Per share dataLUV EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20 30 40 50

4.3 Compensation for Growth

  • The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • The decent profitability rating of LUV may justify a higher PE ratio.
  • LUV's earnings are expected to grow with 77.99% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.16
PEG (5Y)N/A
EPS Next 2Y126.78%
EPS Next 3Y77.99%

More info and screens

Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

5

5. Dividend

5.1 Amount

  • LUV has a Yearly Dividend Yield of 1.38%. Purely for dividend investing, there may be better candidates out there.
  • LUV's Dividend Yield is rather good when compared to the industry average which is at 0.85. LUV pays more dividend than 81.82% of the companies in the same industry.
  • LUV's Dividend Yield is slightly below the S&P500 average, which is at 1.81.
Industry RankSector Rank
Dividend Yield 1.38%

5.2 History

  • On average, the dividend of LUV grows each year by 16.25%, which is quite nice.
  • LUV has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)16.25%
Div Incr Years0
Div Non Decr Years0
LUV Yearly Dividends per shareLUV Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2023 2024 2025 2026 0.2 0.4 0.6 0.8

5.3 Sustainability

  • 90.48% of the earnings are spent on dividend by LUV. This is not a sustainable payout ratio.
  • The dividend of LUV is growing, but earnings are growing more, so the dividend growth is sustainable.
DP90.48%
EPS Next 2Y126.78%
EPS Next 3Y77.99%
LUV Yearly Income VS Free CF VS DividendLUV Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 2B -2B
LUV Dividend Payout.LUV Dividend Payout, showing the Payout Ratio.LUV Dividend Payout.PayoutRetained Earnings

More info and screens

Find the best dividend stocksShow peers with best dividend

SOUTHWEST AIRLINES CO

NYSE:LUV (2/20/2026, 8:04:00 PM)

After market: 52 -0.09 (-0.17%)

52.09

+0.01 (+0.02%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)01-28
Earnings (Next)04-22
Inst Owners101.39%
Inst Owner Change-4.05%
Ins Owners0.9%
Ins Owner Change-0.12%
Market Cap25.59B
Revenue(TTM)28.06B
Net Income(TTM)441.00M
Analysts66
Price Target46.09 (-11.52%)
Short Float %6.34%
Short Ratio2.85
Dividend
Industry RankSector Rank
Dividend Yield 1.38%
Yearly Dividend0.72
Dividend Growth(5Y)16.25%
DP90.48%
Div Incr Years0
Div Non Decr Years0
Ex-Date03-12
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)216.06%
Min EPS beat(2)-0.64%
Max EPS beat(2)432.76%
EPS beat(4)2
Avg EPS beat(4)111.2%
Min EPS beat(4)-16.06%
Max EPS beat(4)432.76%
EPS beat(8)5
Avg EPS beat(8)560.05%
EPS beat(12)6
Avg EPS beat(12)389.99%
EPS beat(16)8
Avg EPS beat(16)279.85%
Revenue beat(2)0
Avg Revenue beat(2)-1.26%
Min Revenue beat(2)-1.94%
Max Revenue beat(2)-0.59%
Revenue beat(4)0
Avg Revenue beat(4)-1.2%
Min Revenue beat(4)-1.94%
Max Revenue beat(4)-0.59%
Revenue beat(8)2
Avg Revenue beat(8)-0.81%
Revenue beat(12)3
Avg Revenue beat(12)-0.79%
Revenue beat(16)3
Avg Revenue beat(16)-0.77%
PT rev (1m)18.71%
PT rev (3m)37.69%
EPS NQ rev (1m)55.23%
EPS NQ rev (3m)175.77%
EPS NY rev (1m)48.25%
EPS NY rev (3m)55.36%
Revenue NQ rev (1m)2.82%
Revenue NQ rev (3m)3.8%
Revenue NY rev (1m)3.31%
Revenue NY rev (3m)4.26%
Valuation
Industry RankSector Rank
PE 52.62
Fwd PE 12.43
P/S 0.91
P/FCF N/A
P/OCF 13.89
P/B 3.21
P/tB 3.81
EV/EBITDA 13.71
EPS(TTM)0.99
EY1.9%
EPS(NY)4.19
Fwd EY8.05%
FCF(TTM)-1.69
FCFYN/A
OCF(TTM)3.75
OCFY7.2%
SpS57.12
BVpS16.24
TBVpS13.67
PEG (NY)0.16
PEG (5Y)N/A
Graham Number19.02
Profitability
Industry RankSector Rank
ROA 1.52%
ROE 5.53%
ROCE 2.36%
ROIC 1.84%
ROICexc 2.24%
ROICexgc 2.45%
OM 1.53%
PM (TTM) 1.57%
GM 73.57%
FCFM N/A
ROA(3y)1.39%
ROA(5y)1.68%
ROE(3y)4.81%
ROE(5y)5.77%
ROIC(3y)1.36%
ROIC(5y)N/A
ROICexc(3y)2.08%
ROICexc(5y)N/A
ROICexgc(3y)2.29%
ROICexgc(5y)N/A
ROCE(3y)1.74%
ROCE(5y)N/A
ROICexgc growth 3Y-29.98%
ROICexgc growth 5YN/A
ROICexc growth 3Y-29.6%
ROICexc growth 5YN/A
OM growth 3Y-29.69%
OM growth 5YN/A
PM growth 3Y-11.45%
PM growth 5YN/A
GM growth 3Y2.37%
GM growth 5Y2.24%
F-Score7
Asset Turnover0.97
Health
Industry RankSector Rank
Debt/Equity 0.57
Debt/FCF N/A
Debt/EBITDA 2.3
Cap/Depr 171.35%
Cap/Sales 9.53%
Interest Coverage 3.96
Cash Conversion 92.66%
Profit Quality N/A
Current Ratio 0.52
Quick Ratio 0.45
Altman-Z 2.31
F-Score7
WACC8.94%
ROIC/WACC0.21
Cap/Depr(3y)176.77%
Cap/Depr(5y)172.51%
Cap/Sales(3y)10.24%
Cap/Sales(5y)10.1%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)6.45%
EPS 3Y-3.45%
EPS 5YN/A
EPS Q2Q%3.57%
EPS Next Y323.46%
EPS Next 2Y126.78%
EPS Next 3Y77.99%
EPS Next 5Y47.38%
Revenue 1Y (TTM)2.11%
Revenue growth 3Y5.63%
Revenue growth 5Y25.41%
Sales Q2Q%5.61%
Revenue Next Year12.81%
Revenue Next 2Y8.8%
Revenue Next 3Y7.22%
Revenue Next 5Y6.37%
EBIT growth 1Y33.33%
EBIT growth 3Y-25.74%
EBIT growth 5YN/A
EBIT Next Year604.21%
EBIT Next 3Y105.3%
EBIT Next 5Y62.48%
FCF growth 1Y48.64%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y298.7%
OCF growth 3Y-21.38%
OCF growth 5YN/A

SOUTHWEST AIRLINES CO / LUV FAQ

Can you provide the ChartMill fundamental rating for SOUTHWEST AIRLINES CO?

ChartMill assigns a fundamental rating of 5 / 10 to LUV.


What is the valuation status of SOUTHWEST AIRLINES CO (LUV) stock?

ChartMill assigns a valuation rating of 5 / 10 to SOUTHWEST AIRLINES CO (LUV). This can be considered as Fairly Valued.


What is the profitability of LUV stock?

SOUTHWEST AIRLINES CO (LUV) has a profitability rating of 6 / 10.


How financially healthy is SOUTHWEST AIRLINES CO?

The financial health rating of SOUTHWEST AIRLINES CO (LUV) is 4 / 10.


What is the expected EPS growth for SOUTHWEST AIRLINES CO (LUV) stock?

The Earnings per Share (EPS) of SOUTHWEST AIRLINES CO (LUV) is expected to grow by 323.46% in the next year.