Southwest Airlines Co (LUV) Fair Value & Analysis

Industrials · US · Market cap $23.2B

A solid business, but screening 51% overvalued on our models.

What matters now

• The price sits above even our optimistic bull case ($29.67). The favourable scenario is already priced in.
• Solid but not exceptional quality (59/100) and above fair value, neither a clear bargain nor a standout compounder.

Price vs Fair Value (5 years)

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Jul 15, 2026.

How to read this chart

60‑month range $20.95 – $57.90 · fair‑value band $17.80 – $29.67 · the $46.94 price screens above the $22.85 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Jul 15, 2026.

Full chart & analysis →

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Analysis

Southwest Airlines Co (LUV) currently trades at $46.94, while our model-based Fair Value estimate is $22.85, implying the stock looks roughly 51.3% overvalued today. We read business quality at 59/100 (solid quality), in the Industrials sector. Bear case: priced above our estimate, the market already discounts strong expectations. Bull case: above-average quality can justify a premium, the entry price still matters most (evidence: high).

Over the trailing twelve months, Southwest Airlines Co generated revenue of $28.9B at a net margin of 2.8%. Revenue grew 12.8% year over year. It earns a return on equity of 10.1%. Net debt stands at $2.8B. Fundamentals as of Jul 15, 2026

Our scenario range runs from $17.80 (bear case) to $29.67 (bull case); at $46.94, the current price sits above that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 14% below its 52-week high and 64% above its 52-week low, currently above its 200-day average. For context, the median of 10 Industrials peers we cover trades at 45% fair-value upside, at -51%, LUV screens richer than that median.

Fair Value models

Each model estimates fair value its own way; the Fair Value above is the evidence-weighted blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small.

Widest divergence: Multiples ($15.34) versus Economic Profit ($4.20). Highest evidence: Residual Income (76).

Key figures & financial health

Quality Score breakdown

About the company

Southwest Airlines Co. operates as a passenger airline company that provides scheduled air transportation services in the United States and internationally.

Full company description

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 Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. Southwest Airlines Co. was incorporated in 1967 and is headquartered in Dallas, Texas.

Company description, as reported by the company or data provider.

Revenue & earnings trend

FY2021 – FY2025 · reported fiscal years

Southwest Airlines Co reported revenue of $28.1B in FY2025 versus $15.8B in FY2021, a compound +15.5%/yr. Reported net income was $441M in FY2025, compounding −18.0%/yr from FY2021.

LUV screens 51% overvalued. Compare with Delta Air Lines, Inc →

Peer Group

Airlines · 60 stocks

How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.

Valuation Multiples vs Airlines median · lower = cheaper

Snowflake

Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.

VALUE 0: the price sits above our fair-value range.

Insider activity: 46/100

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

ESG scores are not available for this stock yet. Values and ESG data are contextual and can differ between providers.

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10 more Airlines stocks, each showing price versus our Fair Value estimate (as of Jul 15, 2026).

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Frequently asked questions

How we calculate Fair Value

Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.