SOUTHWEST AIRLINES CO (LUV) Fundamental Analysis & Valuation

NYSE:LUV • US8447411088

Current stock price

40.19 USD
+0.36 (+0.9%)
At close:
40.0153 USD
-0.17 (-0.43%)
After Hours:

This LUV fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

6

1. LUV Profitability Analysis

1.1 Basic Checks

  • LUV had positive earnings in the past year.
  • In the past year LUV had a positive cash flow from operations.
  • In the past 5 years LUV has always been profitable.
  • LUV had a positive operating cash flow in each of the past 5 years.
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

  • LUV has a Return On Assets of 1.52%. This is in the better half of the industry: LUV outperforms 63.64% of its industry peers.
  • LUV's Return On Equity of 5.53% is fine compared to the rest of the industry. LUV outperforms 63.64% of its industry peers.
  • The Return On Invested Capital of LUV (1.84%) is comparable to the rest of the industry.
  • LUV had an Average Return On Invested Capital over the past 3 years of 1.36%. This is significantly below the industry average of 20.69%.
  • 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 has a better Profit Margin (1.57%) than 63.64% of its industry peers.
  • In the last couple of years the Profit Margin of LUV has declined.
  • LUV's Operating Margin of 1.53% is in line compared to the rest of the industry. LUV outperforms 45.45% of its industry peers.
  • In the last couple of years the Operating Margin of LUV has declined.
  • With an excellent Gross Margin value of 73.57%, LUV belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
  • In the last couple of years the Gross Margin of LUV has grown nicely.
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

More info and screens

ROAROEROICOperating and Profit MarginShow most profitable peers

4

2. LUV Health Analysis

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LUV is destroying value.
  • Compared to 1 year ago, LUV has less shares outstanding
  • LUV has less shares outstanding than it did 5 years ago.
  • The debt/assets ratio for LUV has been reduced compared to a year ago.
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 2.15 indicates that LUV is not a great score, but indicates only limited risk for bankruptcy at the moment.
  • Looking at the Altman-Z score, with a value of 2.15, LUV belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
  • LUV has a Debt/Equity ratio of 0.57. This is a neutral value indicating LUV is somewhat dependend on debt financing.
  • LUV's Debt to Equity ratio of 0.57 is amongst the best of the industry. LUV outperforms 90.91% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.57
Debt/FCF N/A
Altman-Z 2.15
ROIC/WACC0.2
WACC9.1%
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.
  • With a Current ratio value of 0.52, LUV perfoms like the industry average, outperforming 40.91% of the companies in the same industry.
  • A Quick Ratio of 0.45 indicates that LUV may have some problems paying its short term obligations.
  • LUV has a Quick ratio (0.45) which is comparable to the rest of the industry.
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

More info and screens

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

5

3. LUV Growth Analysis

3.1 Past

  • LUV shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.45%.
  • The Earnings Per Share has been decreasing by -3.45% on average over the past years.
  • LUV shows a small growth in Revenue. In the last year, the Revenue has grown by 2.11%.
  • LUV shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 25.41% yearly.
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

  • The Earnings Per Share is expected to grow by 47.38% on average over the next years. This is a very strong growth
  • LUV is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.37% yearly.
EPS Next Y342.07%
EPS Next 2Y129.51%
EPS Next 3Y79.06%
EPS Next 5Y47.38%
Revenue Next Year13.42%
Revenue Next 2Y8.94%
Revenue Next 3Y7.25%
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.
  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
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

More info and screens

Find the best growth stocksShow best growing peers

5

4. LUV Valuation Analysis

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 40.60 indicates a quite expensive valuation of LUV.
  • LUV's Price/Earnings ratio is in line with the industry average.
  • The average S&P500 Price/Earnings ratio is at 25.61. LUV is valued rather expensively when compared to this.
  • With a Price/Forward Earnings ratio of 9.18, the valuation of LUV can be described as very reasonable.
  • Based on the Price/Forward Earnings ratio, LUV is valued a bit cheaper than 77.27% of the companies in the same industry.
  • LUV is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.79, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 40.6
Fwd PE 9.18
LUV Price Earnings VS Forward Price EarningsLUV Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

  • LUV's Enterprise Value to EBITDA is on the same level as the industry average.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 10.77
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.
  • LUV has a very decent profitability rating, which may justify a higher PE ratio.
  • LUV's earnings are expected to grow with 79.06% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.12
PEG (5Y)N/A
EPS Next 2Y129.51%
EPS Next 3Y79.06%

More info and screens

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

5

5. LUV Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 1.76%, LUV has a reasonable but not impressive dividend return.
  • LUV's Dividend Yield is rather good when compared to the industry average which is at 0.98. LUV pays more dividend than 81.82% of the companies in the same industry.
  • LUV's Dividend Yield is comparable with the S&P500 average which is at 1.89.
Industry RankSector Rank
Dividend Yield 1.76%

5.2 History

  • The dividend of LUV is nicely growing with an annual growth rate of 16.25%!
  • LUV has been paying a dividend for at least 10 years, so it has 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

  • LUV pays out 90.48% of its income as dividend. This is not a sustainable payout ratio.
  • LUV's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP90.48%
EPS Next 2Y129.51%
EPS Next 3Y79.06%
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

LUV Fundamentals: All Metrics, Ratios and Statistics

SOUTHWEST AIRLINES CO

NYSE:LUV (3/25/2026, 8:04:00 PM)

After market: 40.0153 -0.17 (-0.43%)

40.19

+0.36 (+0.9%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryPassenger Airlines
Earnings (Last)01-28
Earnings (Next)04-22
Inst Owners97.78%
Inst Owner Change-7.62%
Ins Owners0.93%
Ins Owner Change-0.15%
Market Cap19.75B
Revenue(TTM)28.06B
Net Income(TTM)441.00M
Analysts67.33
Price Target48.63 (21%)
Short Float %5.05%
Short Ratio2.32
Dividend
Industry RankSector Rank
Dividend Yield 1.76%
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)5.51%
PT rev (3m)41.6%
EPS NQ rev (1m)-4.52%
EPS NQ rev (3m)147.92%
EPS NY rev (1m)4.39%
EPS NY rev (3m)64.89%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)3.61%
Revenue NY rev (1m)0.61%
Revenue NY rev (3m)4.94%
Valuation
Industry RankSector Rank
PE 40.6
Fwd PE 9.18
P/S 0.7
P/FCF N/A
P/OCF 10.72
P/B 2.47
P/tB 2.94
EV/EBITDA 10.77
EPS(TTM)0.99
EY2.46%
EPS(NY)4.38
Fwd EY10.89%
FCF(TTM)-1.69
FCFYN/A
OCF(TTM)3.75
OCFY9.33%
SpS57.12
BVpS16.24
TBVpS13.67
PEG (NY)0.12
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 2.15
F-Score7
WACC9.1%
ROIC/WACC0.2
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 Y342.07%
EPS Next 2Y129.51%
EPS Next 3Y79.06%
EPS Next 5Y47.38%
Revenue 1Y (TTM)2.11%
Revenue growth 3Y5.63%
Revenue growth 5Y25.41%
Sales Q2Q%5.61%
Revenue Next Year13.42%
Revenue Next 2Y8.94%
Revenue Next 3Y7.25%
Revenue Next 5Y6.37%
EBIT growth 1Y33.33%
EBIT growth 3Y-25.74%
EBIT growth 5YN/A
EBIT Next Year714.35%
EBIT Next 3Y113.87%
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 Fundamental Analysis 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 342.07% in the next year.