Southwest Airlines Company

Valuation Analysis

About the Company

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-demand live and on-demand television, flight tracker, and additional curated content, as well as a variety of premium snacks and coffee. In addition, the company offers ancillary services, such as in-flight purchases, baggage fees, EarlyBird Check-In, and upgraded boarding, as well as transportation of pets and unaccompanied minors. As of December 31, 2025, the company operated a total fleet of 803 Boeing 737 aircraft; and served 117 destinations in 42 states, the District of Columbia, and the Comm

Southwest Airlines Company Stock at a Glance

Southwest Airlines Company (LUV) is currently trading at $45.47 with a market capitalization of $22.2B. The trailing P/E ratio stands at 30.31x, with a forward P/E of 10.04x. The 52-week range spans from $28.98 to $55.11; the current price is 17.5% below the yearly high. Year-over-year revenue growth stands at +12.8%. The net profit margin stands at 2.83%.

💰 Dividend

Southwest Airlines Company pays an annual dividend of $0.72 per share, representing a yield of 1.58%. The payout ratio stands at 48%.

📊 Analyst Rating

23 analysts rate Southwest Airlines Company (LUV) on consensus: Hold. The average price target is $45.64, implying +0.38% from the current price. Analyst price targets range from $30.00 to $60.00.

Southwest Airlines Company: The Investment Case in Detail

Southwest Airlines Company (LUV) operates in the Industrials — specifically Airlines — and is headquartered in United States. Below is a structured read of the investment case built directly from the latest fundamentals, valuation multiples, analyst positioning and smart-money flows. Each section translates raw numbers into the investment logic they imply, so you can decide whether the risk/reward fits your portfolio.

The Bull Case

Revenue is growing at a healthy 12.8% pace year-over-year, suggesting the business model continues to find new customers and pricing power.

The Bear Case

With a net margin of just 2.83%, the business has little room to absorb cost shocks or pricing pressure — a single bad quarter can swing the company to a loss.

Valuation in Context

With a PEG ratio of 0.31, the price-to-earnings multiple is actually below the company's growth rate — classic value-meets-growth territory that Peter Lynch would have called a 'GARP' opportunity.

What to Watch Next

• The forward P/E of 10.04x is meaningfully below the trailing 30.31x — analysts expect earnings to step up; the next earnings release is the test.

Investment Thesis: Strengths & Weaknesses

Technical Snapshot

Price trades above both the 50- and 200-day moving averages, with 50d above 200d — a classic bullish setup (golden-cross alignment).

Risk Profile

The data points to market-like volatility, elevated short interest (7.92%).

Trading Data

💵 Dividend Info

Related Stocks in the Same Sector

Where can I buy Southwest Airlines Company?

Compare top-rated brokers — low fees, trusted providers, fully regulated.