Southwest Airlines Co

Consumer Discretionary
Air Freight/Delivery Services
www.southwest.com

Earnings Score
Moat Score
Safety Score

Market Cap $17.43B
PE 32
Debt $6.69B
Cash $8.13B
EV $15.99B
FCF -$546.00M

Earnings

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Sales & Net Margins

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Earnings	$547.00M
EBIT	$704.00M
ROE	6%
ROA	2%
FCF	-$546.00M
Equity	$9.37B
Growth Stability	-5K%
PE	31.86
PEG	2.36
PB	1.86
P/FCF	-31.92
P/S	0.63
Price/Cash	0.47
Debt/Equity	0.71
Debt/FCF	-12.26
Net Margins	-2%
Op. Margins	3%
Earnings CAGR	-11%
Sales Growth YoY	2%
Sales Growth QoQ	-7%
Sales CAGR	2%
FCF CAGR	-1%
Equity CAGR	3%
Earnings Stability	0.1
Earnings Growth YoY	-35%
Earnings Growth QoQ	-157%

Earnings CAGR 5Y	13%
Sales CAGR 5Y	27%
FCF CAGR 5Y	-0%
Equity CAGR 5Y	1%
Earnings CAGR 3Y	9%
Sales CAGR 3Y	9%
Equity CAGR 3Y	-4%
Market Cap	$17.43B
Revenue	$27.58B
Dividend Yield	2%
Payout Ratio	59%
Assets	$33.21B
Total Debt	$6.69B
Cash	$8.13B
Shares Outstanding	584M
EV	15.99B
Earnings Score	5%
Moat Score	38%
Safety Score	37%
Final Score	27%
Working Capital	-3.17B
Current Ratio	0.77
Shares Growth 3y	0%
Equity Growth QoQ	-10%
Equity Growth YoY	-8%

Assets & ROA

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Stockholders Equity & ROE

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Southwest Airlines is the largest domestic carrier in the United States, as measured by the number of originating passengers boarded. Southwest operates over 700 aircraft in an all-Boeing 737 fleet. Despite expanding into longer routes and business travel, the airline still specializes in short-haul leisure flights, using a point-to-point network. Southwest operates a low-cost carrier business model.

SEC Filings

Direct access to Southwest Airlines Co (LUV) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2025
- 10-Q Mar 31
2024
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Southwest Airlines Co compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Southwest Airlines Co compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR -11%

Stability 10%

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Southwest Airlines Co Discounted Cash Flow

Fully customizable DCF calculator online for Southwest Airlines Co.

Years

Calculation mode

= -$5B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	-$546M	-$539M	-$533M	-$526M	-$520M	-$514M	-$507M	-$501M	-$495M	-$489M	-$483M	-$4.8B
DCF		-$490M	-$440M	-$395M	-$355M	-$319M	-$286M	-$257M	-$231M	-$207M	-$186M	-$1.9B
Value	-$5B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Net Margins	11%	11%	16%	11%	10%	-34%	6%	-13%	2%	2%	-2%
ROA	-	16%	14%	13%	12%	-11%	5%	3%	2%	2%	2%
ROE	-	27%	33%	25%	23%	-35%	9%	-29%	4%	4%	6%

Bad Net Margins (-2.32%)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Debt over FCF	-	1.5	2.03	1.14	0.9	-6.46	6.17	-60.84	-22.62	-5.23	-12.26
Debt over Equity	0.43	0.4	0.35	0.34	0.27	1.19	1.08	0.76	0.77	0.81	0.71
Growth Stability	-	-	-	93%	84%	-112%	100%	-5K%	-	-	-5K%

Good Debt/FCF ratio (-12.26)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Good Debt/Equity ratio (0.71)

The company is not overleveraged and has a good balance between equity and debt.

Bad Graham’s Stability (-5K%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	CAGR 5Y
Revenue YoY growth	-	3%	4%	4%	2%	-60%	75%	51%	10%	5%	27%
Earnings YoY growth	-	3%	55%	-29%	-7%	-234%	-132%	-415%	-115%	0%	13%
Equity YoY growth	-	15%	24%	-6%	-0%	-10%	17%	3%	-2%	-2%	1%
FCF YoY growth	-	88%	-20%	65%	-0%	-155%	-211%	-107%	166%	347%	-0%