Industrials · Passenger Airlines · US stock · price as of 22 Oct 2026
Key indicators
Price
$42.03
52-week range
$29.26 – $55.11
Market cap
$20.7B
P/E (trailing)
26.1×
EV / EBITDA
8.8×
Free-cash-flow yield
−2.2%
Dividend yield
1.7%
Revenue (last 12 months)
$30.1B
Revenue growth (3y a year)
5.6%
Operating margin
3.5%
Return on invested capital
8.8%
Net debt / EBITDA
0.8×
Fair value
Fair value (average of valid models)$43.63 middle half of models $34 – $55
Versus priceFair+4% to fair value
P/E multiple
$45.87
P/B multiple
$36.99
P/S multiple
$78.13
EV/EBITDA multiple
$48.39
EV/EBIT multiple
$56.57
EV/revenue multiple
$65.19
10-year DCF, EBITDA exit
$23.77
5-year DCF, EBITDA exit
$34.75
10-year DCF, revenue exit
$24.78
5-year DCF, revenue exit
$36.36
5-year DCF, growth exit
$19.16
Dividend discount, stable
$35.66
Dividend discount, multi-stage
$71.07
Earnings power value
$34.15
Model uncertainty
High
X-Ray Score
39/ 100 · Medium confidence · ahead of 15% of sector peers
Valuation44
Growth40
Profitability28
Financial health45
Dividends36
Five-year price chart navy: price · brown: 200-day average · blue band: fair value range
Executive summary
Southwest Airlines is a Dallas-based passenger airline that flies mainly short- and medium-haul routes across the United States and to nearby destinations in Mexico, the Caribbean and Central America. It operates a point-to-point route network rather than a hub-and-spoke one. Customers are leisure and business travellers who book through the airline's website, app and reservation centres, and it also earns income from cargo and a loyalty programme.
Revenue comes mainly from passenger fares, supplemented by cargo, loyalty programme and other income. It totals $30.1 billion over the last twelve months, growing at 5.6% a year across the last three years. The operating margin is 3.5%, and the business earns a profit of 9% on the capital invested in it. The airline carries net debt of 0.8 times EBITDA, and the dividend yield is 1.7%.
StocksXray gives Southwest Airlines Co an X-Ray Score of 39 out of 100 (medium confidence), ahead of 15% of the S&P 500 stocks in its sector. Its strongest lens is financial health (45) and its weakest is profitability (28).
Our fair value (the average of the valid models) is $43.63 (range $34.30 to $54.53). At $42.03 the stock trades 4% below that value, so the label is "Fair" with high model uncertainty. Fair value is a range, not a price target.
XStocksXray
Southwest Airlines Co (LUV)
Valuation history multiples at each fiscal year-end price; the last column uses today's price and the last twelve months
FY2021
FY2022
FY2023
FY2024
FY2025
Now
Price
$39.33
$30.91
$27.26
$32.47
$40.78
$42.03
Market cap
$24.0B
$19.8B
$17.4B
$20.9B
$22.8B
$20.7B
P/E
24.4×
35.5×
35.9×
42.7×
51.6×
26.1×
EV / revenue
1.2×
0.7×
0.5×
0.7×
0.9×
0.8×
EV / EBITDA
6.4×
6.6×
8.0×
9.5×
12.3×
8.8×
Price / free cash flow
13.2×
–
–
–
–
–
Free-cash-flow yield
7.6%
−0.7%
−2.0%
−7.6%
−3.7%
−2.2%
Price / book
2.3×
1.9×
1.7×
2.0×
2.9×
2.9×
Dividend yield
–
0.58%
2.64%
2.22%
1.77%
1.71%
Fundamentals checklist ● 4 Good · ● 3 Average · ● 7 Bad · each check graded against the sector
Cash quality
Earnings backed by cash−5.6%Good
Free-cash-flow yield−2.2%Bad
Risk models
Altman Z score0.9×Bad
Piotroski F-Score8 of 9Good
Growth
EPS growth (3y)−3.2%Bad
Revenue growth (3y)5.6%Average
Growth consistency90%Average
Balance sheet
Current ratio0.5×Bad
Net debt / EBITDA0.8×Good
Interest cover5.2×Bad
Valuation
Fair value vs price1.0×Good
EBIT / EV yield4.6%Average
Profitability
Return on invested capital8.8%Bad
Operating margin3.5%Bad
XStocksXray
Southwest Airlines Co (LUV)
Financials US$ millions, from SEC filings; last column is the last twelve months
Income statement
FY21
FY22
FY23
FY24
FY25
LTM
Revenue
15,790
23,814
26,091
27,483
28,063
30,072
Gross profit
–
–
–
–
–
–
Operating income
1,721
1,017
224
321
428
1,041
Net income
977
539
465
465
441
837
Diluted EPS ($)
1.61
0.87
0.76
0.76
0.79
1.61
Free cash flow
1,817
-134
-356
-1,592
-831
-455
Gross margin
–
–
–
–
–
–
Operating margin
10.9%
4.3%
0.9%
1.2%
1.5%
3.5%
Net margin
6.2%
2.3%
1.8%
1.7%
1.6%
2.8%
Balance sheet
FY21
FY22
FY23
FY24
FY25
LTM
Total assets
36,320
35,369
36,487
33,750
29,061
30,122
Cash
12,480
9,492
9,288
7,509
3,231
3,791
Total debt
10,727
8,088
8,007
6,699
4,901
5,946
Equity
10,414
10,687
10,515
10,350
7,981
7,082
Dividend per share ($)
–
0.18
0.72
0.72
0.72
–
Revenue and net income US$ billions: navy revenue, teal net income
Every number comes from SEC filings, end-of-day prices and the StocksXray models described on the methodology page. The X-Ray Score ranks each metric against the company's own sector. Fair value is the average of up to 15 valuation models, most of them anchored to the company's own multiples, so it stays near the price and should be read as a range, not a point. Analyst ratings, price targets and earnings-call summaries are not part of this report. Educational research, not financial advice; read the disclaimer.
