Stock

Southwest Airlines

LUV

Airlines, Airports & Air Services · Industrials

Also trades as: 0L8F.L GBP 0.42 (+0.42%)

Price

$42.03

+2.15 (+5.39%)

pre-market:$41.57-1.09%

Market Cap

$20.56B

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Data as of Oct 23, 2026 · filings through Sep 30, 2026

§How the score breaks down

Quality

Weak

6/30

Growth

Strong

16/20

Cash Flow

Good

6/10

Stability

Good

6/10

Valuation

Strong

8/10

Ownership

Mixed

4/15

Dividends

Weak

1/5

47 of 100 counted points = Winston Score 47.

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Share count falling — buybacks

−8.4% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 609.0M (2021) → 558.0M (2025)

§Winston Score History

The full picture

Southwest Airlines is one of the largest passenger airlines in the United States. It flies people to destinations across the U.S., Mexico, and the Caribbean, serving everyday travelers looking for low-cost flights. Southwest is known for its no-frills, budget-friendly model and is the largest domestic carrier in the U.S. by number of passengers.

Southwest makes money by selling plane tickets, plus fees for things like early boarding and vacation packages. It operates almost entirely within the Americas, with roughly 800 aircraft and service to about 120 destinations. Its main competitive edge has historically been low operating costs, a single aircraft type (the Boeing 737), and a loyal customer base built around its no-change-fee policy. However, the airline faces real pressure from rising labor costs and fuel prices, which squeeze thin margins — and a recent push by activist investors to overhaul its business strategy adds uncertainty about the company's direction going forward.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+21.2% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+450.0% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

1.1%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Runway

~22 months

$3.6B cash & investments

Quarterly Free Cash Flow

→ Burn rate stable

Adequate runway but may need to raise capital within 2 years

Growth context

Southwest Airlines is growing revenue at 21% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

4.5%

Thin — 4.5% gross margin

Profit after running costs

Operating Margin

4.5%

Thin — 4.5% operating margin

Return on the money invested

ROCE

9.8%

Below par — 9.8% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth

Sales YoY

+14.5%

Fast-growing sales (+14.5% YoY)

Profit growth

EPS YoY

+205.8%

Earnings growing fast (+205.8% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Profit that turns into cash

Cash Conversion

246%

Turns 246% of profit into real cash

Spare cash per sale

FCF Margin

-2.3%

Burning cash (-2.3%)

Free cash flow is negative. They are burning cash, not generating it.

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Stability

What it owes vs what it owns

Debt / Equity

0.94

Moderate — manageable debt (0.94)

Covers its interest

Interest Cover

6.72x

Adequate interest coverage (6.7x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

19.9x

Fair value — P/E 19.9

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

Cheaper or dearer next year

P/E vs Forward

+12.6

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (19.9 → 7.4)

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Dividends

Dividend

Dividend Yield

1.83%

Small dividend — 1.83% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record

Dividend Growth

+0.0%

Dividend flat

Payout Ratio

34%

no trend

Pays out a modest share of profit and keeps the rest to reinvest. Room to keep paying through a weak year.

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