Southwest Airlines Co.
Southwest Airlines Co. operates as a passenger airline company that provides scheduled air transportation services in the United States and internationally. It also provides Rapid Rewards loyalty program; SWABIZ, an online booking tool; and inflight entertainment platform that includes movies-on-dem…
What to know about LUV
Southwest Airlines Co. is a large Industrials company with a mixed financial profile. It scores well on valuation and growth, but cash flow is worth keeping an eye on.
Should you consider LUV?
Based on 31 financial metrics and sector comparison. Not financial advice.
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Southwest Airlines Co. is a large-cap Industrials company with a mixed overall financial profile — it ranks near the bottom of Industrials stocks (75 of 75).
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Profit margins are thin compared to most S&P 500 peers — the company keeps less of each dollar it earns than the average. Watch for signs of margin improvement.
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Valuation looks attractive — the stock is priced reasonably relative to its earnings and sales compared to most peers. You're not overpaying for the business.
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Growth has been slower than most peers. That's not necessarily a dealbreaker, but it means the investment case rests more on current earnings than future expansion.
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There is a small dividend (0.02%), but income-focused investors will likely find better yields elsewhere in the market.
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The stock is more volatile than most S&P 500 names — it can swing sharply in both directions. This suits investors comfortable with bigger short-term moves.
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Analyst sentiment is cautious and short interest is relatively elevated — meaning some professional investors are actively betting the price will fall. Worth understanding why.
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There are several areas of concern. This may suit investors with a higher risk tolerance or a specific contrarian view on the Industrials sector.
At a glance
How it scores
We look at 31 different financial metrics and group them into categories. Here's how LUV compares to the other S&P 500 stocks.
Dive deeper — all 31 metrics 9 categories · valuation, growth, health, dividends & more Show all Hide
Valuation
Is the stock cheap or expensive relative to its earnings, sales, and assets? Lower multiples often mean better value.
| Metric | Value | vs S&P 500 |
|---|---|---|
| P/E Ratio (Trailing) | 31.98 | Average |
| Forward P/E | 10.59 | Top 25% |
| PEG Ratio | 0.32 | Top 25% |
| Price to Sales | 0.81 | Top 25% |
| Price to Book | 3.41 | Average |
| EV/EBITDA | 11.86 | Above avg |
| Earnings Yield | 3.13% | Average |
Profitability
How efficiently does the company turn revenue into profit? Higher margins mean more money kept from each dollar earned.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Gross Margin | 23.01% | Below avg |
| Operating Margin | 4.55% | Below avg |
| Net Profit Margin | 2.83% | Below avg |
| Return on Equity | 10.06% | Average |
| Return on Invested Capital | 1.94% | Below avg |
Growth
How fast is the business expanding? Strong growth in revenue and earnings signals increasing market demand.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Revenue Growth (YoY) | 12.80% | Above avg |
| Revenue Growth (3Y CAGR) | 5.63% | Above avg |
| EPS Growth (YoY) | — | N/A |
| Free Cash Flow Growth | -47.80% | Below avg |
Health
Can the company cover its debts and obligations? A healthy balance sheet reduces the risk of financial trouble.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Current Ratio | 0.48 | Below avg |
| Debt to Equity | 0.93 | Average |
| Interest Coverage | 5.98 | Average |
| Altman Z-Score | 2.28 | Average |
Dividends
Does the company pay shareholders, and is that payment growing and sustainable?
| Metric | Value | vs S&P 500 |
|---|---|---|
| Dividend Yield | 1.52% | Average |
| Payout Ratio | 48.00% | Average |
| Dividend Growth (5Y) | — | N/A |
Cash Flow
Is real cash flowing into the business — not just accounting profits? Strong cash flow funds growth and dividends.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Free Cash Flow Yield | -1.71% | Below avg |
| OCF to Sales | 8.31% | Below avg |
Risk
How volatile is the stock compared to the broader market? Lower beta and volatility mean a smoother ride.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Beta (1-Year) | 1.16 | Average |
| Volatility (30-Day) | 44.74% | Below avg |
Sentiment
What do analysts and short-sellers think? High analyst ratings and low short interest signal broad confidence.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Short % of Float | 7.92% | Below avg |
| Avg. Analyst Rating | 2.56 | Below avg |
| Target Upside % | -4.22% | Below avg |
Size
How large is the company by market value? Size affects stability, growth potential, and index inclusion.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Market Capitalization | 23.45B | Average |
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