Southwest Airlines Co.
Company Overview Southwest Airlines Co. (the Company or Southwest ) operates Southwest Airlines, a major passenger airline that provides scheduled air transportation in the United States and near-international markets. Southwest commenced service on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities: Dallas, Houston, and San Antonio.
$42.03
+$2.15 (+5.39%)
EOD Oct 22, 2026
Operating margin is thin at 4.39%. Limited cushion if revenue slows or costs rise, not the profile of a wide-moat business.
Revenue growth slowed to 2.1% in the fiscal year ended Dec 2025, essentially flat. This is a business that needs a catalyst.
Negative free cash flow of -$450M. The business is consuming cash, not generating it.
20.7x earnings. Valuation is in a reasonable range. The main question is whether the business can re-accelerate or if current trajectory is already priced in.
Price History
Valuation & Multiples
Based on TTM earnings · Diluted shares
Profitability & Returns
Revenue (TTM)
$31.55B
▲ +2.1% YoY
Net Income (TTM)
$1.05B
▼ -5.2% YoY
Op. Margin
4.39%
▲ +0.4pp YoY
ROIC
7.77%
▲ +0.8pp YoY
Cash Flow & Balance Sheet
FCF (TTM)
-$450M
▲ +47.8% YoY
Op. Cash Flow (TTM)
$2.75B
▲ +298.7% YoY
Net Debt
$3.25B
Cash & Equiv.
$3.62B
5Y CAGR: +25.4%
Continue Research
SourceComputed from the 10-Q filed 21 Oct 2026, covering the period ending 30 Sept 2026, as reported to the SEC. Data last refreshed 23 Oct 2026. How this is calculated.
Price from market data, last close as of 22 Oct 2026. Fiscal year ends Dec. Sector medians are approximate S&P 500 benchmarks and update periodically.
Is Southwest Airlines (LUV) overvalued?
At a P/E of 20.7, Southwest Airlines (LUV)'s valuation is best read against its own history, its peers, and the growth its price implies. A high multiple is not the same as overvalued: fast-growing, high-quality businesses can deserve a premium. See the general approach in how to tell if a stock is overvalued.
On quality, Southwest Airlines scores 39/100 on Intrinsiqq's quality scorecard (a lower-quality business on these measures), weighing growth, margins, returns on capital, share count, and balance-sheet strength. It currently yields about 1.7%; see dividend safety for coverage and history. All figures are computed from SEC filings; read the full methodology, or see how the market compares in our US profitability statistics. This is analysis, not investment advice.
Frequently asked
Is Southwest Airlines a high-quality business?+
Southwest Airlines scores 39 out of 100 on Intrinsiqq's quality score, a weighted blend of 7 metrics each scored 0 to 100, which makes it a lower-quality business on these measures. Recent fundamentals include a 4.4% operating margin and a 7.8% return on invested capital. The score weighs revenue and free-cash-flow growth, operating margins, return on invested capital, share-count change, and balance-sheet strength, all computed from SEC filings, not opinion. Because valuation only means something relative to quality, the full metric-by-metric breakdown is on the quality scorecard.
Does Southwest Airlines (LUV) pay a dividend, and how much?+
Yes, Southwest Airlines pays a regular dividend of about $0.72 per share per year (typically in quarterly installments), a yield of roughly 1.7% at the current price. That is a payout ratio of about 33.9% of earnings, so the dividend is amply covered by earnings. A low headline yield is not the same as a weak dividend: what matters is how well earnings and free cash flow cover the payout and whether it is growing, not the percentage alone. For LUV's full payout history, growth streak and dividend-safety score, see the dividends tab.
Is Southwest Airlines a good stock to buy right now?+
That depends on valuation and quality together, not either alone. you should weigh LUV's valuation and scores 39/100 on quality (lower-quality). It also yields about 1.7%. A cheap price is only a bargain if the business is durable, and a premium can be justified by genuine quality, so the two questions, "is it cheap?" and "is it good?", only make sense side by side. Read the valuation against the quality scorecard, run the DCF on your own assumptions, and decide for yourself. This is analysis from SEC filings, not investment advice.
Related stocks: Air Transportation, Scheduled
Spot a number that looks wrong? Check it in LUV's SEC filings or
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Data sourced from SEC EDGAR filings and third-party price providers. Scores, valuations, and metrics are algorithmic estimates. This is not investment advice. See our Terms and Methodology.
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