Winston
Southwest Airlines logo

Southwest Airlines

LUV
38
Airlines, Airports & Air Services · Industrials
Price
$50.94
+1.53 (+3.10%)
Market Cap
$24.90B
Winston Score
38
Winston looking serious
Winston is serious
Below-average fundamentals — multiple weak pillars.

Winston Score below 40. The stock fails on most of our quality checks.

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.

Winston Score History

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Growth Profile

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

Revenue Growth

+12.8% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+273.1% 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

1.0%ownership

Relatively low insider ownership

Cash Position

Cash flow positive

$2.9B cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Winston looking proud
Growth + cash flow

Southwest Airlines is a rare growth stock that's already generating positive cash flow while growing at 13%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

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.

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)

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin
10.0%
Thin — 10.0% gross margin
Operating Margin
4.6%
Thin — 4.6% operating margin
ROCE
2.6%
Weak — 2.6% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
+4.7%
Slow sales growth (4.7% YoY)
EPS YoY
+71.7%
Earnings growing fast (71.7% YoY)

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

EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion
294%
Turns 294% of profit into real cash
FCF Margin
-1.4%
Burning cash (-1.4%)

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

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Stability

Debt / Equity
0.83
Moderate — manageable debt (0.83)
Interest Cover
8.11x
Comfortably covers interest (8.1x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)
32.2x
Pricey — P/E 32.2

P/E above the market average. People are paying up for expected growth.

P/E vs Forward
+23.8
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (32.2 → 8.4)

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Dividends

Dividend Yield
1.67%
Small dividend — 1.67% yield

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

Dividend Growth
+0.0%
Dividend flat

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