Stock Analysis
Southwest Airlines Co.LUV
P/E 23.09×· 5Y range 20.16–33,586.60×· bottom 3% of history
Sector: Consumer Cyclical · Industry: Air Transportation, Scheduled
AnalystsHold30 analystsP/E 23.1× sits at the 3rd percentile of its 5.086926762491444-year history.
Cash covers 66% of debt · FY 2025.
PMP Verdict
Mixed fundamentals, cheap valuation
Strengths
- Financial Health63
Risks
- Profitability35
- Growth45
Mixed business trading cheap — priced for skepticism.
Market context
-3.3% today· Z 1.8σ
Bull Case
- ✓Piotroski F-Score 7/9 — high earnings quality
- ✓Revenue CAGR 15.5% — durable top-line growth
- ✓Interest coverage 25.1× — debt well covered
- ✓P/E 23.1× at bottom 3% of 5-year history
What's happening with LUV
Profile
moat, profitability and growth lag behind.
How is each axis scored?
- Valuation62/100 · Moderate
- P/E vs own history (3th pct)25/25
- FCF yield (-2.4%)0/25
- P/S (0.6x)25/25
- EV/EBIT (20.2x)12/25
- Growth45/100 · Weak
- Revenue CAGR (15.5%)20/25
- Net income CAGR (-18.0%)0/25
- EPS CAGR 5Y (-16.3%)0/25
- Fwd implied growth (133.2%)25/25
- Profitability35/100 · Weak
- ROIC (8.5%)12/25
- ROE (10.5%)12/25
- Net margin (2.8%)6/25
- Operating margin (3.5%)5/25
- Financial Health63/100 · Moderate
- Altman Z (2.21)18/25
- Current ratio (0.52)0/25
- Interest coverage (25.1x)25/25
- Net cash / debt (D/A 6%)20/25
- Quality59/100 · Moderate
- Piotroski F (7/9)22/25
- Beneish M (-3.50)25/25
- FCF conversion (-55%)0/25
- Margin stability (σ 13.5%)12/25
- Moat18/100 · Weak
- ROIC >12% years (6/10 yrs)13/25
- Median gross margin (n/a)0/25
- FCF-positive years (5/10 yrs)5/25
- Worst-year net margin (worst -34.0%)0/25
Risk Flags
- ⚠Negative FCF margin (-0.0%) — burning cash
About Southwest Airlines Co.
Southwest Airlines is the largest domestic air carrier in the United States by passengers boarded. Show more
Southwest operates nearly 800 aircraft in an all-Boeing 737 fleet. Despite offering some longer routes and a few perks for business travelers, the airline predominantly specializes in short-haul, leisure flights operated with a simple cabin configuration in a point-to-point network. In early 2026, Southwest modified its cabins to offer some rows with extra legroom, its ticketing process and merchandising to offer assigned seats, and more fare categories to include a basic economy class that appears for the first time in travel aggregators' search results and more directly competes with other airlines' offerings.
Headquarters: DALLAS, TX · Employees: 73,456 · Website ↗
Price History
Weekly Candlestick Chart — up to 5Y
Key Metrics
Financial snapshot · Tap any metric for its definition and grade
TTM Snapshot
trailing twelve months · YoYValuation
62BP/E (TTM)23.1xB
Grade B: FairPrice / TTM EPS (own statements) — vs own 5Y history: 20.2x–33586.6x · 3rd pct
P/FCF18.2xB
Grade B: FairPrice / Free Cash Flow per share (Finnhub). Inverse of FCF yield — negative when FCF is negative · CapEx exceeds operating cash flow (118% of OCF) — reported FCF understates normalized earning power in this investment phase
FCF Yield-2.4%D
Grade D: NegativeTTM (OCF − CapEx) / Market Cap — vs own 5Y history: -11.0%–8.8% · 50th pct · CapEx exceeds operating cash flow (118% of OCF) — reported FCF understates normalized earning power in this investment phase
P/S (TTM)0.64xA
Grade A: CheapPrice / TTM Revenue (own statements) — vs own 5Y history: 0.5x–3.3x · 16th pct
EV/EBIT20.2xC
Grade C: ExpensiveEnterprise value / TTM EBIT (D&A not in our data) — capital-structure neutral — vs own 5Y history: 7.3x–133.5x · 27th pct
EV/Sales0.7xA
Grade A: CheapEnterprise Value / TTM Revenue (Finnhub) — capital-structure neutral sales multiple
Forward P/E9.9xA
Grade A: CheapPrice / next-year EPS estimate — shows whether the TTM multiple is rich or just front-loading growth
P/B Ratio2.42xA
Grade A: FairPrice to Book Value. Neg. equity = heavy buybacks
PEG Ratio0.29A
Grade A: CheapFinnhub PEG — their P/E basis ÷ expected EPS growth. Suppressed when their P/E diverges >2× from our TTM P/E (different basis)
Dividend Yield3.03%A
Grade A: PaysTTM dividend yield (Finnhub) — annual dividends / price. None = no dividend; very high yield can signal distress
Payout Ratio113.4%D
Grade D: UnsustainableDividends / Net Income (Finnhub) — share of earnings paid out; >90% or negative = unsustainable
CapEx exceeds OCF: CapEx exceeds operating cash flow (118% of OCF) — reported FCF understates normalized earning power in this investment phase
Profitability
35DROIC8.5%C
Grade C: AverageNOPAT (EBIT less ~21% tax) / invested capital (equity + debt − cash). Flagship quality metric — durable >15% signals a moat
ROE10.5%C
Grade C: AverageReturn on Equity. Neg. equity = heavy buybacks
ROA2.9%D
Grade D: WeakReturn on Assets (Finnhub) — Net Income / Total Assets; how efficiently assets produce profit
Net Margin2.8%D
Grade D: LowNet Income / Revenue
Operating Margin3.5%D
Grade D: LowTTM EBIT / TTM Revenue
Gross Margin70.7%A
Grade A: PremiumGross Profit / Revenue
FCF Margin-1.5%D
Grade D: LowFCF / Revenue · CapEx exceeds operating cash flow (118% of OCF) — reported FCF understates normalized earning power in this investment phase
True FCF Margin-1.5%D
Grade D: LowTTM (OCF − CapEx − SBC) / TTM Revenue — SBC treated as a real cost · CapEx exceeds operating cash flow (118% of OCF) — reported FCF understates normalized earning power in this investment phase
Growth
45D+Revenue CAGR15.5%A
Grade A: HighCompound annual revenue growth (up to 5Y depending on data availability)
Net Income CAGR-18.0%D
Grade D: LowCompound annual net income growth (up to 5Y depending on data availability)
EPS CAGR (5Y)-16.3%D
Grade D: LowCompound annual EPS growth over up to 5Y of per-share earnings (own statements). Null when either endpoint EPS ≤ 0
Implied EPS Growth133.2%A
Grade A: HighAnalyst forward EPS (normalized basis) vs our GAAP TTM EPS — different bases, so extreme values usually mark cyclically depressed TTM earnings, not real growth
Dilution (5Y)-20.1%A
Grade A: BuybacksShare count change over 5Y
SBC / Net Income—
Stock-based comp/Net income. >30% = dilution risk
SBC / Revenue—
TTM stock-based comp / TTM Revenue
Financial Health
63BAltman Z-Score2.21C
Grade C: Gray zoneBankruptcy risk. >3 Safe, <1.8 Distress
Current Ratio0.52xD
Grade D: LowCurrent Assets/Liabilities
Quick Ratio0.38xD
Grade D: Low(Current Assets − Inventory) / Current Liabilities (Finnhub) — stricter liquidity test, excludes inventory
Interest Coverage25.1xA
Grade A: StrongEBIT/Interest. >10 Strong
Debt Repayment—
Years to repay net debt via FCF · CapEx exceeds operating cash flow (118% of OCF) — reported FCF understates normalized earning power in this investment phase
Net Debt/EBIT1.6xA
Grade A: LowLeverage. <2x Low, >4x High
Debt/Equity0.61xA
Grade A: LowDebt / Equity: <1 Conservative, >2 Risky. Not meaningful with non-positive equity; shown as unavailable rather than low debt.
Cash / Debt0.66xC
Grade C: PartialCash covers how much of total debt. >1 = could repay all debt from cash
Quality
59CPiotroski F-Score7/9A
Grade A: StrongFinancial strength 0–9. >7 Strong
Beneish M-Score-3.50A
Grade A: SafeEarnings manipulation risk. < -2.22 Safe
FCF Conversion-54.6%D
Grade D: PoorFCF / Net Income · CapEx exceeds operating cash flow (118% of OCF) — reported FCF understates normalized earning power in this investment phase
Margin Stability13.5%C
Grade C: AverageEBIT margin std deviation. Lower = stable
Capex / Revenue9.9%C
Grade C: AverageTTM CapEx / TTM Revenue — high % = capital-hungry business
Asset Turnover1.03xA
Grade A: HighRevenue / Total Assets (Finnhub) — how efficiently the asset base generates sales
Insider Transactions
SEC Form 4 · 8 recordsP/S codes are the directional signal; grants, option exercises and tax withholding carry none. Form 4 doesn't flag 10b5-1 plans — scheduled sales may appear within open-market sells.
| Trade date | Insider | Transaction | Shares | Filed |
|---|---|---|---|---|
Martinez Jimmy Ryan Filed | Martinez Jimmy Ryan | Grant / award | +2.7K | |
Martinez Jimmy Ryan Filed | Martinez Jimmy Ryan | Tax withholding | -179 | |
Krishna Varun Filed | Krishna Varun | Grant / award | +3.8K | |
Liberty Jason T Filed | Liberty Jason T | Grant / award | +3.8K | |
Woods Lauren Tauscher Filed | Woods Lauren Tauscher | Grant / award | +7.6K |
Show 3 more filingsShow fewer filings
| Trade date | Insider | Transaction | Shares | Filed |
|---|---|---|---|---|
Doxey Tom Filed | Doxey Tom | Grant / award | +6.3K | |
Roach Anthony Filed | Roach Anthony | Grant / award | +9.5K | |
Jones Justin Filed | Jones Justin | Grant / award | +8.6K |
More metrics — Moat, Per Share, Balance Sheet, MarketHide additional metrics
Moat
18EROIC >12% Years6/10 yrsC
Grade C: ModerateShare of completed fiscal years with ROIC > 12% — measures multi-year capital-return durability
Gross Margin (Med.)—
Median annual gross margin across available fiscal years — pricing-power durability
FCF-Positive Years5/10 yrsD
Grade D: WeakShare of completed fiscal years with positive free cash flow
Net Margin Floor-34.0%D
Grade D: WeakWeakest annual net margin across completed fiscal years — recession/downcycle resilience
Per Share
EPS (TTM)$1.71
Own TTM net income / shares — same earnings basis as P/E
Cash / Share$7.76
Cash & short-term investments per share (Finnhub)
Book Value / Share$14.49
Shareholders' equity per share (Finnhub). Negative = accumulated losses / heavy buybacks
Balance Sheet
Total Debt$4.90B
Total debt obligations (short + long term)
Cash & Equiv.$3.23B
Cash and short-term investments
Net Debt$1.67B
Total Debt minus Cash. Negative = Net Cash position
Total Equity$7.98B
Shareholders' equity (book value)
Asset / Liability1.38xC
Grade C: AdequateTotal Assets / Total Liabilities
Market
Market Cap$19.32B
Current Market Capitalization
Beta1.23C
Grade C: VolatilePrice sensitivity vs the market (Finnhub) — 1.0 moves with market, >1.2 amplifies swings
How grades work: each metric is graded A–D against fixed thresholds (tap a row for the meaning). Card grades map the pillar score to A+–E — a card grade is that pillar's own score, not an average of the rows shown.
Financials as of Jun 2026 · Ratio snapshot Oct 17, 2026
Key Insights: Southwest Airlines Co. (LUV)
LUV is down 3.26% at the last close. Southwest Airlines Co. meets 7 of 9 Piotroski F-Score criteria, placing its fundamental strength in the top tier of US-listed stocks. Altman Z-Score of 2.21 falls in the grey zone (1.81–2.99) — financial distress is unlikely but not ruled out. Beneish M-Score of -3.50 suggests a low likelihood of earnings manipulation. Revenue has compounded at roughly 15% annually — a strong growth profile.
- Free-cash-flow margin is negative (-2%) — the business currently burns cash.
- Company has negative FCF, making debt repayment from operations difficult.
- Southwest Airlines Co. posted a net loss in 1 of 10 available completed fiscal years (2016–2025).
- The stock currently yields 3.0% in dividends.
See how LUV ranks on the Capex Tracker — top 50 capital spenders compared.
Recent Market Moves
See all LUV moves →| Date | Session | Price | Move | Z-Score |
|---|---|---|---|---|
| Oct 15 | Regular | 40.77 | +3.63% | 2.28 |
| Oct 15 | After-hours | 40.69 | +3.43% | 2.16 |
Frequently Asked Questions about LUV
What is the current Southwest Airlines Co. (LUV) stock price?
LUV is trading at $39.50 at the last market close, down 3.26% on the session. PreMarketPrice tracks LUV pre-market, intraday and after-hours prices.
Is LUV stock a buy right now?
PreMarketPrice's quantitative model rates Southwest Airlines Co.'s financial health at 63/100. This is a data-driven snapshot of fundamentals, not investment advice.
Is LUV stock overvalued?
Southwest Airlines Co. trades at a trailing P/E of 23.1 and our valuation score rates it 62/100 (higher = cheaper vs. its own history). See the Valuation History and Key Metrics sections for forward P/E, EV/EBITDA and PEG context.
When does Southwest Airlines Co. report earnings?
No confirmed earnings date is currently scheduled for LUV. The Earnings section lists recent reports and updates as dates are announced.
What sector does Southwest Airlines Co. operate in?
Southwest Airlines Co. operates in the Consumer Cyclical sector, within the Air Transportation, Scheduled industry. The Related Stocks section lists sector peers for comparison.
What does Southwest Airlines Co. do?
Southwest Airlines is the largest domestic air carrier in the United States by passengers boarded.
About Southwest Airlines Co. (LUV) Stock
Southwest Airlines Co. (LUV) is a US-listed stock operating in the Consumer Cyclical sector, specifically the Air Transportation, Scheduled industry. As of the latest update, Southwest Airlines Co. is trading at $39.50, down 3.26% on the day with a market capitalization of $19.3 billion. The financial health score for LUV is 63/100, which indicates good financial strength based on profitability, leverage, liquidity, and growth metrics. This page provides real-time pre-market pricing, earnings calendar, financial health analysis, and valuation metrics for LUV stock.
LUV Stock Analysis & Key Metrics
On PreMarketPrice, you can track Southwest Airlines Co. (LUV) across multiple dimensions:
- Pre-market price & movement: Real-time LUV stock price with percentage change, updated continuously during pre-market and regular trading hours.
- Valuation & P/E history: Historical P/E, P/S, and P/B ratios for LUV with trend analysis and normalized valuation multiples.
- Financial statements: Revenue, net income, assets, liabilities, and equity for Southwest Airlines Co. across multiple reporting periods.
- Financial health score: A composite score of 63/100 based on Altman Z-Score, Piotroski F-Score, profitability, and leverage metrics for LUV.
- Sector peers: Compare LUV against 5 other consumer cyclical stocks on key financial metrics.
Is LUV a Good Stock to Buy?
This page provides data-driven analysis to help you evaluate Southwest Airlines Co. (LUV) as an investment. The financial health score of 63/100 suggests good financial fundamentals. Valuation metrics show whether the stock is trading above or below its historical average.However, this is not financial advice — always do your own research before investing.
Data on this page is sourced from real-time market feeds, Polygon.io, and Finnhub.Southwest Airlines Co. (LUV) trades on NYSE/NASDAQ. Pre-market trading occurs 4:00 AM – 9:30 AM ET. Regular market hours are 9:30 AM – 4:00 PM ET.