Latest Ratios: P/E Ratio 62.6x · EV/EBITDA 13.6x · ROE 4.8%. (1996–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $24.3B | $23.1B | $21.6B | $18.5B | $21.6B | $26.1B | $26.3B | $29.1B | $26.7B | $39.5B | $31.5B |
| Enterprise Value | $27.0B | $25.8B | $22.2B | $18.4B | $21.6B | $25.9B | $27.5B | $30.5B | $28.2B | $41.6B | $33.3B |
| P/E Ratio → | 62.57 | 52.32 | 44.83 | 38.00 | 38.70 | 26.61 | — | 12.64 | 10.83 | 11.32 | 14.04 |
| P/S Ratio | 0.86 | 0.82 | 0.79 | 0.71 | 0.91 | 1.65 | 2.91 | 1.30 | 1.21 | 1.86 | 1.54 |
| P/B Ratio | 3.46 | 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 | 13.18 | 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
Enterprise-value multiples — capital-structure-neutral measures of total business value
| 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 | 13.59 | 12.98 | 11.21 | 10.54 | 9.12 | 8.65 | — | 7.31 | 6.40 | 9.00 | 7.01 |
| EV / EBIT | 63.14 | 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 |
Margins and return-on-capital ratios measuring operating efficiency
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% |
| 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% |
Solvency and debt-coverage ratios — lower is generally safer
| 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 |
Short-term solvency ratios and asset-utilisation metrics
| 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 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
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 | 1.4% | 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% |
| 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 | 10.5% | 11.1% | 1.2% | 0.0% | 0.0% | 0.0% | 1.7% | 6.9% | 7.5% | 4.1% | 5.5% |
| Total Shareholder Yield | 12.0% | 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 |
Operational Margin Erosion
According to current market data, LUV trades at a forward P/E of 19.18, which appears elevated relative to its historical performance and the broader airline sector, suggesting that investors are pricing in a recovery that may not be supported by recent earnings volatility.
The disconnect between the high trailing P/E of 65.71 and the forward multiple implies significant market optimism regarding future margin expansion. Investors should monitor whether this premium is sustainable given the ongoing erosion of the company's structural cost advantage.
Based on reported figures, LUV's ROIC has struggled to maintain positive territory, frequently dipping into negative values such as the -2.8% observed in 2024Q1, indicating a persistent inability to generate returns that exceed the cost of capital in the current operating environment.
The trend of low single-digit ROIC suggests that the company's capital allocation is failing to compound value effectively. This decay appears driven by both margin pressure and the high capital intensity required to maintain an aging fleet, warranting further investigation into long-term asset productivity.
As reported in financial statements, LUV's asset turnover has remained stagnant near 0.25, reflecting the capital-intensive nature of its operations and the difficulty in maximizing revenue per dollar of invested capital compared to more efficient, diversified legacy carriers.
The cash conversion cycle has shown volatility, often influenced by seasonal booking patterns and shifts in passenger deposit timing. This lack of efficiency in turning assets into revenue suggests that the company's point-to-point model may be facing diminishing returns in a saturated domestic market.
As indicated by recent filings, the current ratio has deteriorated significantly from 1.14 in 2023Q4 to 0.48 in 2026Q1, signaling that the company's ability to cover short-term obligations with liquid assets has weakened to a level that may be considered vulnerable under stress.
This rapid decline in liquidity suggests that the company is consuming its cash reserves to fund operations and capital expenditures. Investors should monitor whether this trend necessitates future financing, which could further strain the balance sheet in a high-interest-rate environment.
The P/E ratio is frequently misapplied to LUV, as it obscures the extreme volatility in earnings caused by fuel hedging, maintenance cycles, and loyalty program accounting, which often fail to reflect the underlying cash-generating capacity of the core airline business.
Analysts should instead focus on EV/EBITDA or free cash flow metrics to better capture the true enterprise value and operational health. Relying on P/E in a cyclical, capital-intensive industry like aviation may lead to a distorted view of the company's actual valuation and risk profile.
Includes 30+ ratios · 30 years · Updated daily
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Quick answers to the most common questions about buying LUV stock.
Southwest Airlines Co.'s current P/E ratio is 62.6x. The historical average is 28.6x. This places it at the 97th percentile of its historical range.
Southwest Airlines Co.'s current EV/EBITDA is 13.6x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 9.8x.
Southwest Airlines Co.'s return on equity (ROE) is 4.8%. The historical average is 11.2%.
Based on historical data, Southwest Airlines Co. is trading at a P/E of 62.6x. This is at the 97th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Southwest Airlines Co.'s current dividend yield is 1.45% with a payout ratio of 90.5%.
Southwest Airlines Co. has 17.4% gross margin and 1.5% operating margin.
Southwest Airlines Co.'s Debt/EBITDA ratio is 3.0x, indicating high leverage. A ratio between 2-4x is manageable but warrants monitoring.