Southwest Airlines Company (LUV) Fair Value & Analysis
Industrials · US · Market cap $23.2B · ISIN US8447411088
What is Southwest Airlines Company really worth?
Southwest Airlines Company
LUV · US
A solid business, but trading 70% above our fair value of $22.85.
Risks
For context
Fair value as of: Sep 5, 2026
From 16 valuation models · updated today
Fair value updated Sep 5, 2026, revised from $14.76 to $22.85 (+54.8%) since Aug 27, 2026. Share price −20.5% over the past month.
What runs behind every stock
69 individual criteria per stock, every one traceable See the method →
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 (57/100) 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 Sep 5, 2026.
How to read this chart
60‑month range $20.95 – $56.14 · fair‑value band $17.80 – $29.67 · the $38.73 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 5, 2026.
Analysis
Southwest Airlines Company (LUV) currently trades at $38.73, while our model-based Fair Value estimate is $22.85, implying the stock looks roughly 69.5% overvalued today. The Quality Score stands at 57/100 (solid quality), in the Industrials sector. 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 $38.73 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.
Over the trailing twelve months, Southwest Airlines Company 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 Sep 5, 2026
Our scenario range runs from $17.80 (bear case) to $29.67 (bull case); at $38.73, 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 29% below its 52-week high and 36% above its 52-week low, currently below its 200-day average. For context, the median of 10 Industrials peers we cover trades at 59% fair-value upside, at −41%, LUV screens richer than that median.
Fair Value models
This estimate rests on fiscal year 2025 figures, and about 8 months have passed since. In that time the company retained roughly $0.5232 per share, which is 2.3 % of the fair value. The fair value deliberately does not add this in: the models value reported figures, not a projection.
Each model estimates fair value its own way; the Fair Value above is the evidence-weighted, family-balanced 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. Every input is real reported data, nothing guessed.
All 16 models by family
Widest divergence: Multiples ($15.34) versus Economic Profit ($4.20). Highest evidence: Residual Income (76).
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Key figures & financial health
More key figures
Figures from reported company fundamentals · as of Sep 5, 2026. TTM = trailing twelve months.
Quality Score breakdown
Of which business quality 54 · Market factors (momentum, volatility) 47
Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.
All values are scores from 0 to 100 (100 = best against fixed, research-based bands), not percentages. The three market factors (momentum, 52-week proximity, low volatility) are displayed but carry zero weight in the headline number: market sentiment is not a business property.
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 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.
of which total revenue +3.7 % · buybacks/dilution +0.9 %
Annual growth per factor. These are factors, not summands: multiplied they give the EPS growth rate, added they do not quite. Start and end points are 3-year averages (details on hover).
LUV screens 70% overvalued. Compare with Delta Air Lines, Inc →
Earlier news
External third-party headlines (Yahoo Finance, Reuters and others), not an editorial selection.
- Southwest Airlines (LUV) is Reshaping Operations to Unlock Margin Growth
- Is Southwest (LUV) Quietly Redefining Its Investment Story With Earnings Beat, Liquidity Boost, New Directors?
- Southwest Airlines (LUV) Stock Looks Undervalued On Earnings While Returns Raise Questions
- Southwest Airlines (LUV), What Is Driving Fresh Attention Now?
Peer Group
Airlines · 57 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
Strength profile in five axes (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.
Similar stocks
10 more Airlines stocks, each showing price versus our Fair Value estimate (as of Sep 5, 2026).
| Stock | Price | Fair Value | vs Fair Value |
|---|---|---|---|
| Delta Air Lines, Inc DAL | $80.07 | $115.82 | +45% |
| United Airlines Holdings UAL | $110.60 | $175.62 | +59% |
| Ryanair Holdings RYA | €25.47 | €41.26 | +62% |
| InterGlobe Aviation Limited INDIGO | ₹5,166 | ₹3,073 | −41% |
| Singapore Airlines Limited C6L | 7.09 SGD | 7.89 SGD | +11% |
| Air China Limited 601111 | ¥5.94 | ¥7.16 | +21% |
| LATAM Airlines Group LTM | $52.50 | $106.79 | +103% |
| China Southern Airlines Company 600029 | ¥5.08 | ¥1.28 | −75% |
| Deutsche Lufthansa AG LHA | €7.99 | €18.94 | +137% |
| China Eastern Airlines Corporation 600115 | ¥3.57 | ¥14.20 | +298% |
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