Southwest Airlines Company (LUV) fair value: what the stock is really worth
We calculate from audited financials what Southwest Airlines Company is really worth. The fair value tells you whether the price is too high or too low, the quality score (0 to 100) how solid the business behind it is. 26 models, 37 quality factors, updated daily.
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Price vs Fair Value
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Sep 18, 2026.
How to read this chart
60‑month range $20.95 – $54.33 · fair‑value band $17.80 – $29.67 · the $40.98 price screens above the $22.85 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). 1 fiscal year is left out: there the valuation rested on only a fraction of the usual models. Dashed = 300-day average. As of Sep 18, 2026.
Southwest Airlines Co. operates as a passenger airline company that provides scheduled air transportation services in the United States and internationally.
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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.
Stock analysis
Southwest Airlines Company (LUV) currently trades at $40.98, while our model-based Fair Value estimate is $22.85, implying the stock looks roughly 79.4% overvalued today.
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Valuation
Bull case: the Multiples group reads highest at a median of $15.34 per share, and 1 of the 16 models we run sit above the $40.98 price.
Bear case: the Economic Profit group reads lowest at $4.20, and 15 of the 16 models stay below the price. Evidence for this calculation is medium.
Scenario range: $17.80 (bear) to $29.67 (bull), the price of $40.98 sits above it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 57/100 (solid quality), in the Industrials sector.
Expensive Growth: The company is growing, but growth may require heavy reinvestment or weak cash conversion.
Southwest Airlines Company 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.
Key figures
Market cap $22.9B · P/E ratio 27.3 · P/S ratio 0.43 · EPS (TTM) $1.50 · Dividend yield 1.8% · Net margin 1.6% · Return on equity 10.1% · Return on assets (EBIT) 2.1%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 42 out of 100 (low confidence).
What moves the price
The share trades about 25% below its 52-week high and 43% above its 52-week low, currently above its 200-day average.
For context, the median of 10 Industrials peers we cover trades at 29% fair-value upside, at −44%, LUV screens richer than that median.
Fair Value models
Bear $17.80Fair Value $22.85Bull $29.67
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above is their evidence-weighted blend, not the output of a single model. Based on fiscal year 2025 figures (about 9 months old). Earnings retained since then ($0.5569 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target.Evidence ⓘEvidence = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.58/100
The company is growing, but growth may require heavy reinvestment or weak cash conversion.
Revenue growth 1 year
+2.1%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+5.6%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+25.4%
Revenue growth 40 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+9.7%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate.
−21.3%
Earnings growth per share plus dividend.
Earnings per share, growth per year−23.1%
Dividend (yield on the price)1.8%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.−23% vs −13%, slowing
Profit margin 2020 to 2025 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.−42% → 2%
Compare Southwest Airlines Company with another stock
Price, fair value, quality and upside side by side.
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Peer Groupⓘ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.Airlines · 53 stocks
Beats the industry median on 4/14 measures
Overall it trails its industry peers.
Valuation
Quality Score57 · Top 25%
Fair Value upside−42% · Bottom 25%
Profitability
Return on equity (TTM)10% · Below median
Return on assets2% · Below median
Net margin (TTM)3% · Below median
Operating margin (TTM)5% · Below median
Growth and dividend
Revenue growth13% · Above median
Dividend yield (TTM)1.8% · Bottom 25%
Balance sheet
Debt / equity0.57× · Below median
Valuation Multiplesvs Airlines median · lower = cheaper
P/E (TTM)27.3× · Priciest 25%
P/B2.91× · Priciest 25%
P/S (TTM)0.81× · Pricier than median
EV/EBITDA11.1× · Priciest 25%
PEG0.35× · Cheapest 25%
Strength profile in five axes (Snowflake)
This stockSector peers
VALUE (fair-value potential)0· sector 51
FUTURE (revenue growth)64· sector 51
PAST (return on equity)40· sector 47
HEALTH (low debt)71· sector 69
DIVIDEND (yield)35· sector 47
VALUE 0: the price sits above our fair-value range.
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Southwest Airlines Company Fair Value". https://www.fairvalue-calculator.com/stock/LUV
Frequently asked questions
Is Southwest Airlines Company (LUV) overvalued or undervalued?
As of Sep 18, 2026, our model estimates a fair value of $22.85 versus a price of $40.98, about −44% upside (overvalued).
What is the fair value of LUV?
Our model-based fair value for Southwest Airlines Company is $22.85 (as of Sep 18, 2026), built from audited fundamentals. The current price: $40.98.
What is the quality score of LUV?
Southwest Airlines Company has a Quality Score of 57/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Southwest Airlines Company (LUV)?
Our model-based price target is the fair value of $22.85 (as of Sep 18, 2026) from 16 valuation models. Cautious scenario $17.80, optimistic scenario $29.67. It is a calculation from audited fundamentals, not an analyst target.
What is the Southwest Airlines Company stock forecast for 2026?
Our models put fair value at $22.85, about −44% upside versus a price of $40.98 (overvalued). Cautious scenario $17.80, optimistic scenario $29.67. The calculation is refreshed regularly with new filings.
What is the revenue of Southwest Airlines Company (LUV)?
Southwest Airlines Company reported trailing-twelve-month revenue of about $28.9B (latest available figure, as of Sep 18, 2026).
Does Southwest Airlines Company pay a dividend?
Southwest Airlines Company currently shows a dividend yield of about 1.76% relative to its recent price (as of Sep 18, 2026).
What is the intrinsic value of Southwest Airlines Company (LUV)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Southwest Airlines Company it is $22.85 per share (as of Sep 18, 2026), against a price of $40.98. It is the blended result of 16 valuation models (cash flow, earnings, asset, dividend).
Is Southwest Airlines Company stock overvalued or undervalued in 2026?
As of Sep 18, 2026, LUV trades above its calculated fair value: price $40.98, fair value $22.85, a gap of about −44% (overvalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of LUV?
No. The price is what the market pays today ($40.98); the fair value is what the company's own numbers justify ($22.85). For Southwest Airlines Company the two are $18.13 per share apart. That gap is exactly why we show both numbers side by side.
How much is Southwest Airlines Company worth?
The market values Southwest Airlines Company at about $22.9B (market capitalisation, as of Sep 18, 2026). Per share that is $40.98; our models calculate a fair value of $22.85 per share.
What do the bullish and bearish scenarios say about LUV?
Our models span a range for Southwest Airlines Company: cautious scenario $17.80, base $22.85, optimistic $29.67 per share (as of Sep 18, 2026, price $40.98). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of LUV?
Southwest Airlines Company trades at a price-to-earnings ratio of 27.3 (as of Sep 18, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of $22.85 is built from several models across several years. Other multiples: PEG 0.4, P/B 2.9, P/S 0.8, EV/EBITDA 11.1.
What is the PEG ratio of LUV?
The PEG ratio of Southwest Airlines Company is 0.35 (P/E divided by earnings growth, as of Sep 18, 2026). That is below 1, so growth is priced more cheaply than the earnings multiple alone suggests.
How solid is the balance sheet of Southwest Airlines Company (LUV)?
Balance-sheet figures for Southwest Airlines Company (as of Sep 18, 2026): return on equity 10.1%, debt of 0.57 per unit of equity. They feed the Quality Score of 57/100, which measures business quality independently of the share price.
How far is LUV from its 52-week high?
Southwest Airlines Company trades at $40.98, about 25% below its 52-week high of $54.87 and 43% above the low of $28.57 (as of Sep 18, 2026). Distance from the high says nothing about value: that is what the fair value of $22.85 is for.
Which stocks are comparable to Southwest Airlines Company?
From the same area (Industrials) we also value Delta Air Lines, Inc, United Airlines Holdings, Ryanair Holdings, InterGlobe Aviation Limited, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Southwest Airlines Company stock attractive at the current price?
The data as of Sep 18, 2026: price $40.98, calculated fair value $22.85 (−44%), Quality Score 57/100, from 16 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of LUV calculated?
We run Southwest Airlines Company through 16 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of $22.85, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 16.1 % above its aggregate fair value. Southwest Airlines Company itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Southwest Airlines Company (LUV)?
The closing price on Sep 18, 2026 was $40.98. Our model-based fair value is $22.85, about −44% upside (overvalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Southwest Airlines Company right now?
The price sits above even our optimistic bull case ($29.67). The favourable scenario is already priced in. Solid but not exceptional quality (57/100) and above fair value, neither a clear bargain nor a standout compounder.
Where does the earnings growth of Southwest Airlines Company (LUV) come from?
Earnings per share at Southwest Airlines Company grew −13.6 % a year from 2014 to 2025. Broken into its drivers: revenue per share +4.7 %, EBIT margin −25.5 %, tax rate +2.1 %, residual (interest, one-offs) +8.4 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Southwest Airlines Company
How large is the market capitalisation of Southwest Airlines Company (LUV)?
The market capitalisation of Southwest Airlines Company is $22.9B. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Southwest Airlines Company (LUV)?
The price-to-sales ratio of Southwest Airlines Company is 0.43 (P/E × margin). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Southwest Airlines Company (LUV)?
Earnings per share at Southwest Airlines Company are $1.50 (price ÷ EPS = P/E 27.3). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Southwest Airlines Company (LUV)?
The dividend yield of Southwest Airlines Company is 1.8% (payout 48.0%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Southwest Airlines Company (LUV)?
The net margin of Southwest Airlines Company is 1.6% (fiscal year 2025). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Southwest Airlines Company (LUV)?
The return on equity (ROE) of Southwest Airlines Company is 10.1% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Southwest Airlines Company (LUV)?
On an EBIT basis the return on assets of Southwest Airlines Company is 2.1% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Southwest Airlines Company (LUV)?
The operating margin of Southwest Airlines Company is 4.6% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Southwest Airlines Company (LUV)?
Revenue at Southwest Airlines Company is growing +12.8% versus a year earlier (3y avg +5.6%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Southwest Airlines Company (LUV)?
Earnings per share at Southwest Airlines Company are growing +50.8% versus a year earlier. How much earnings per share grew versus a year earlier.
How much free cash flow does Southwest Airlines Company (LUV) generate?
The free cash flow of Southwest Airlines Company is −$831M (fiscal year 2025). The cash truly left after running and investing in the business, this is what pays dividends and buybacks.
How much net debt does Southwest Airlines Company (LUV) carry?
The net debt of Southwest Airlines Company is $2.8B (fiscal year 2025). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Sep 18, 2026