Southwest Airlines Co. (LUV) Financial Ratios
30 years of historical data (1996–2025) · Industrials · Airlines, Airports & Air Services
EV/EBITDA
↑
13.23
↑+26% vs avg
5yr avg: 10.50
30Y Low5.9·High17.5
P/FCF
N/A
—
5yr avg: 14.41
30Y Low6.2·High133.2
P/B Ratio
↑
3.35
↑+49% vs avg
5yr avg: 2.25
30Y Low1.0·High5.1
ROE
↓
4.8%
-17% vs avg
5yr avg: 5.8%
30Y Low-33%·High37%
Debt/EBITDA
↓
3.01
↓-26% vs avg
5yr avg: 4.09
30Y Low0.6·High5.3
Percentile shows where the current value sits in 30-year historical distribution. Sparklines show 5-year trend.
LUV Valuation Multiples
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
Southwest Airlines Co. trades at 60.7x earnings, 51% above its 5-year average of 40.1x, sitting at the 97th percentile of its historical range. Compared to the Industrials sector median P/E of 25.6x, the stock trades at a premium of 137%.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $23.6B | $23.1B | $21.6B | $18.5B | $21.6B | $26.1B | $26.3B | $29.1B | $26.7B | $39.5B | $31.5B |
| Enterprise Value | $26.3B | $25.8B | $22.2B | $18.4B | $21.6B | $25.9B | $27.5B | $30.5B | $28.2B | $41.6B | $33.3B |
| P/E Ratio → | 60.72 | 52.32 | 44.83 | 38.00 | 38.70 | 26.61 | — | 12.64 | 10.83 | 11.32 | 14.04 |
| P/S Ratio | 0.84 | 0.82 | 0.79 | 0.71 | 0.91 | 1.65 | 2.91 | 1.30 | 1.21 | 1.86 | 1.54 |
| P/B Ratio | 3.35 | 2.89 | 2.09 | 1.76 | 2.02 | 2.51 | 2.97 | 2.96 | 2.71 | 3.78 | 3.74 |
| P/FCF | — | — | — | — | — | 14.41 | — | 9.83 | 9.15 | 23.49 | 14.70 |
| P/OCF | 12.79 | 12.52 | 46.79 | 5.84 | 5.70 | 11.24 | — | 7.30 | 5.45 | 10.04 | 7.35 |
P/E links to full P/E history page with 30-year chart
LUV EV Ratios
Enterprise-value multiples — capital-structure-neutral measures of total business value
Southwest Airlines Co.'s enterprise value stands at 13.2x EBITDA, 26% above its 5-year average of 10.5x. This is roughly in line with the Industrials sector median of 13.9x.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 0.92 | 0.81 | 0.71 | 0.91 | 1.64 | 3.04 | 1.36 | 1.28 | 1.97 | 1.63 |
| EV / EBITDA | 13.23 | 12.98 | 11.21 | 10.54 | 9.12 | 8.65 | — | 7.31 | 6.40 | 9.00 | 7.01 |
| EV / EBIT | 61.46 | 38.18 | 27.30 | 21.17 | 20.99 | 14.74 | — | 10.05 | 8.66 | 12.50 | 9.43 |
| EV / FCF | — | — | — | — | — | 14.30 | — | 10.32 | 9.67 | 24.79 | 15.50 |
LUV Profitability
Margins and return-on-capital ratios measuring operating efficiency
Southwest Airlines Co. earns an operating margin of 1.5%, below the Industrials sector average of 4.3%. ROE of 4.8% is modest, trailing the sector median of 8.2%. ROIC of 3.0% represents below-average returns on invested capital versus a sector median of 6.1%.
Margins
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 17.4% | 17.4% | 16.2% | 16.2% | 20.0% | 26.1% | -20.9% | 26.7% | 27.6% | 29.5% | 30.5% |
| Operating Margin | 1.5% | 1.5% | 1.2% | 0.9% | 4.3% | 10.9% | -42.2% | 13.2% | 14.6% | 16.1% | 17.2% |
| Net Profit Margin | 1.6% | 1.6% | 1.7% | 1.8% | 2.3% | 6.2% | -34.0% | 10.3% | 11.2% | 16.5% | 11.0% |
Return on Capital
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 4.8% | 4.8% | 4.5% | 4.4% | 5.1% | 10.1% | -32.9% | 23.4% | 24.3% | 37.0% | 28.4% |
| ROA | 1.4% | 1.4% | 1.3% | 1.3% | 1.5% | 2.8% | -10.2% | 8.8% | 9.6% | 14.4% | 10.1% |
| ROIC | 3.0% | 3.0% | 2.3% | 1.6% | 7.3% | 12.8% | -26.9% | 19.6% | 20.1% | 22.5% | 27.7% |
| ROCE | 2.2% | 2.2% | 1.4% | 0.9% | 3.9% | 6.3% | -17.3% | 16.8% | 17.5% | 19.7% | 23.2% |
LUV Leverage & Debt
Solvency and debt-coverage ratios — lower is generally safer
Southwest Airlines Co. carries a Debt/EBITDA ratio of 3.0x, which is moderately leveraged (7% below the sector average of 3.2x). Net debt stands at $2.8B ($6.0B total debt minus $3.2B cash). Interest coverage of 6.0x is adequate, though a cyclical earnings downturn could tighten the margin of safety.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.75 | 0.75 | 0.78 | 0.87 | 0.89 | 1.18 | 1.37 | 0.41 | 0.34 | 0.35 | 0.40 |
| Debt / EBITDA | 3.01 | 3.01 | 4.07 | 5.27 | 4.00 | 4.10 | — | 0.96 | 0.77 | 0.79 | 0.71 |
| Net Debt / Equity | — | 0.34 | 0.05 | -0.01 | -0.00 | -0.02 | 0.13 | 0.15 | 0.15 | 0.21 | 0.20 |
| Net Debt / EBITDA | 1.38 | 1.38 | 0.28 | -0.05 | -0.01 | -0.07 | — | 0.35 | 0.35 | 0.47 | 0.36 |
| Debt / FCF | — | — | — | — | — | -0.11 | — | 0.49 | 0.52 | 1.29 | 0.80 |
| Interest Coverage | 5.98 | 5.98 | 3.79 | 3.68 | 3.42 | 4.07 | -12.55 | 37.06 | 35.02 | 51.23 | 47.00 |
LUV Liquidity & Efficiency
Short-term solvency ratios and asset-utilisation metrics
The current ratio of 0.52x is below 1.0, meaning current liabilities exceed current assets — though the company's $3.2B cash position helps mitigate short-term liquidity concerns. The current ratio has declined from 1.14x to 0.52x over the past 3 years.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 0.52 | 0.52 | 0.92 | 1.14 | 1.43 | 1.97 | 2.02 | 0.67 | 0.64 | 0.70 | 0.66 |
| Quick Ratio | 0.45 | 0.45 | 0.85 | 1.07 | 1.35 | 1.91 | 1.97 | 0.61 | 0.58 | 0.64 | 0.61 |
| Cash Ratio | 0.30 | 0.30 | 0.71 | 0.94 | 1.18 | 1.69 | 1.78 | 0.45 | 0.47 | 0.47 | 0.48 |
| Asset Turnover | — | 0.97 | 0.81 | 0.72 | 0.67 | 0.43 | 0.26 | 0.87 | 0.84 | 0.84 | 0.88 |
| Inventory Turnover | 29.89 | 29.89 | 28.78 | 27.10 | 24.13 | 21.74 | 26.42 | 31.09 | 34.51 | 35.46 | 41.73 |
| Days Sales Outstanding | — | 14.94 | 14.74 | 16.14 | 15.94 | 31.37 | 45.58 | 17.67 | 9.44 | 11.41 | 9.76 |
LUV Shareholder Yields
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Southwest Airlines Co. returns 12.3% to shareholders annually — split between a 1.5% dividend yield and 10.8% buyback yield. The payout ratio of 90.5% is elevated — while still covered by earnings, there is limited headroom for dividend increases. The earnings yield of 1.6% (inverse of P/E) provides a useful comparison to bond yields when assessing the stock's relative attractiveness to fixed income.
Dividends
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 1.5% | 1.7% | 2.0% | 2.3% | — | — | 0.7% | 1.3% | 1.2% | 0.7% | 0.7% |
| Payout Ratio | 90.5% | 90.5% | 92.5% | 92.0% | — | — | — | 16.2% | 13.5% | 7.9% | 9.9% |
Total Shareholder Return Metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 1.6% | 1.9% | 2.2% | 2.6% | 2.6% | 3.8% | — | 7.9% | 9.2% | 8.8% | 7.1% |
| FCF Yield | — | — | — | — | — | 6.9% | — | 10.2% | 10.9% | 4.3% | 6.8% |
| Buyback Yield | 10.8% | 11.1% | 1.2% | 0.0% | 0.0% | 0.0% | 1.7% | 6.9% | 7.5% | 4.1% | 5.5% |
| Total Shareholder Yield | 12.3% | 12.8% | 3.1% | 2.3% | 0.0% | 0.0% | 2.4% | 8.2% | 8.7% | 4.7% | 6.3% |
| Shares Outstanding | — | $558M | $643M | $640M | $642M | $609M | $565M | $539M | $574M | $603M | $633M |
Peer Comparison
Compare LUV with 10 similar companies in its peer group
| Company | Market Cap | P/E | EV/EBITDA | P/FCF | Gross Margin | Op Margin | ROE | ROIC | Debt/EBITDA |
|---|---|---|---|---|---|---|---|---|---|
 LUVYou | $24B | 60.7 | 13.2 | — | 17.4% | 1.5% | 4.8% | 3.0% | 3.0 |
 DAL | $55B | 11.0 | 8.7 | 14.3 | 22.8% | 9.2% | 27.8% | 12.0% | 2.6 |
 UAL | $38B | 11.6 | 8.3 | 15.0 | 64.1% | 8.0% | 24.0% | 9.1% | 4.1 |
 AAL | $11B | 94.1 | 13.0 | — | 19.2% | 2.7% | — | 3.5% | 10.5 |
 ULCC | $2B | -12.0 | — | — | 35.5% | -4.0% | -25.0% | -2.3% | — |
 ALGT | $2B | -40.6 | 8.4 | 24.8 | 15.4% | 6.7% | -4.2% | 4.6% | 4.4 |
 JBLU | $2B | -3.4 | 32.3 | — | 33.9% | -4.1% | -25.3% | -2.7% | 32.0 |
 SKYW | $4B | 8.9 | 6.2 | 13.0 | 61.6% | 15.2% | 16.6% | 9.2% | 2.4 |
 MESA | $879M | -0.0 | — | 63.1 | 99.1% | -46.5% | -528.9% | -62.9% | — |
 SNCY | $876M | 16.8 | 6.6 | 10.4 | 66.9% | 8.9% | 8.8% | 6.9% | 3.0 |
 BA | $176B | 89.8 | — | — | 4.8% | -6.1% | 289.7% | -9.5% | — |
| Industrials Median | — | 25.6 | 13.9 | 20.0 | 32.0% | 4.3% | 8.2% | 6.1% | 3.2 |
Peer selection based on competitive and market overlap. Compare multiple stocks →
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LUV — Frequently Asked Questions
Quick answers to the most common questions about buying LUV stock.
What is Southwest Airlines Co.'s P/E ratio?
Southwest Airlines Co.'s current P/E ratio is 60.7x. The historical average is 28.6x. This places it at the 97th percentile of its historical range.
What is Southwest Airlines Co.'s EV/EBITDA?
Southwest Airlines Co.'s current EV/EBITDA is 13.2x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 9.8x.
What is Southwest Airlines Co.'s ROE?
Southwest Airlines Co.'s return on equity (ROE) is 4.8%. The historical average is 11.2%.
Is LUV stock overvalued?
Based on historical data, Southwest Airlines Co. is trading at a P/E of 60.7x. This is at the 97th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
What is Southwest Airlines Co.'s dividend yield?
Southwest Airlines Co.'s current dividend yield is 1.49% with a payout ratio of 90.5%.
What are Southwest Airlines Co.'s profit margins?
Southwest Airlines Co. has 17.4% gross margin and 1.5% operating margin.
How much debt does Southwest Airlines Co. have?
Southwest Airlines Co.'s Debt/EBITDA ratio is 3.0x, indicating high leverage. A ratio between 2-4x is manageable but warrants monitoring.