# Southwest Airlines Company (LUV) fundamentals

Data as of 2026-09-08. NYSE, United States. Sector: Industrials / Airlines. Price $39.62, market value $19.4 billion.

## Valuation
- **P/E (trailing): 24.8×** (5-yr avg 38.2×, 3-yr avg 43.6×). Southwest Airlines Company trades at 24.8× trailing earnings, well below its own five-year average of 38.2×: cheap by its own standards. The Industrials median in the September 2026 study was 25.7×. Forward P/E is 8.2×, lower than trailing, so analysts expect earnings to grow.
- **PEG: 2.08**. A PEG of 2.08 means the P/E is high relative to expected earnings growth; the price already assumes a lot.
- **Price / sales: 0.6×**. Each dollar of revenue is priced at 0.6×, a low multiple typical of thin-margin businesses or out-of-favour stocks.
- **Price / book: 2.7×**. The shares trade at 2.7× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 8.1×**. Enterprise value is 8.1× operating earnings before depreciation, the multiple that ignores how the company is financed.
- **Free-cash-flow yield: -2.1%** (5-yr avg -1.3%). Free cash flow is negative: the business is consuming cash, which is normal for heavy investment phases but a warning otherwise.
- **Earnings yield: 4.0%**. The inverse of the P/E: 4.0% of the price is earned each year.

## Profitability
- **Operating margin: 3.5%**. 3.5% of revenue is left after running the business, which leaves little cushion in a downturn.
- **Net margin: 1.6%**. 1.6% of each dollar of sales reaches the bottom line.
- **Return on equity: 5.5%**. 5.5% on shareholders' equity is weak; the business earns little on the capital its owners have in it.
- **Return on invested capital: 8.5%**. Return on all capital, debt included, is 8.5%.
- **Return on assets: 2.9%**. Each dollar of assets produces 2.9% of profit.

## Growth
- **Revenue growth (1 yr): 2.1%** (3-yr 5.6%/yr, 5-yr 25.4%/yr). Revenue grew 2.1% over the last year, against 25.4% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): 3.9%** (3-yr -3.2%/yr). Earnings per share rose 3.9%, roughly in step with revenue.

## Financial health
- **Debt to equity: 0.62**. Debt is 0.62 times equity, moderate leverage.
- **Net debt / EBITDA: 0.7×**. It would take 0.7 years of operating earnings to repay net borrowings, within the comfortable range.
- **Piotroski F-score: 7/9**. 7 of 9 fundamental checks pass: strong and improving financials.

## Dividends
- **Dividend yield: 1.82%** ($0.72 per share, trailing). Southwest Airlines Company yields 1.82%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 90%**. 90% of earnings goes out as dividends, leaving a thin cushion.
- **Consecutive years of increases: 1**. 1 straight year of increases.
- **Dividend growth (5 yr): 32.0%/yr** (1-yr 0.0%). The dividend has compounded at 32.0% a year over five years, doubling roughly every 2 years at that pace.

## Analyst view
- **Analyst consensus: hold** (23 analysts). 23 analysts cover Southwest Airlines Company; the consensus is hold, with an average price target of $50.79 (+28% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): 29.0%** (YTD -3.3%, 3-mo -4.2%). The shares are up 29.0% over twelve months including dividends.
- **From 52-week high: -28.1%** (35.4% above the low). Trading 28% below its 52-week high.
- **200-day average: below**. The price sits below its 200-day moving average, the usual definition of a downtrend.
- **RSI (14-day): 38**. An RSI of 38 is neutral.
- **Beta (1 yr): 1.56** (volatility 44%). Beta of 1.56 against the S&P 500: the shares move much more than the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=LUV · Page: https://foliofundamentals.com/stocks/luv

Not investment advice.