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Southwest Airlines logo

Southwest Airlines

LUV
50
Airlines, Airports & Air Services · Industrials
Also trades as: 0L8F.L
Price
$47.05
+0.11 (+0.23%)
Market Cap
$23.02B
Winston Score
50
Winston is curious
Mixed quality — meaningful strengths and weaknesses.
Data as of Aug 9, 2026 · filings through Jun 30, 2026

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)

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

+16.4% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+20.0% YoY

YoY Growth Rate

Steady EPS growth

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

1.0%ownership

Flat

Insider ownership roughly steady over the past year

Cash Runway

~2 years

$3.8B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

$3.8B cash & investments at current burn rate

Growth context

Southwest Airlines is growing revenue at 16% 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

Gross Margin
177.3%
Premium pricing power — 177.3% gross margin
Operating Margin
3.4%
Thin — 3.4% operating margin
ROCE
2.2%
Weak — 2.2% 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
+9.5%
Steady sales growth (+9.5% YoY)
EPS YoY
+137.1%
Earnings growing fast (+137.1% YoY)

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

EPS Consistency
5/8 quarters
Mixed — about half the quarters showed growth

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Cash Flow

Cash Conversion
282%
Turns 282% of profit into real cash
FCF Margin
-2.1%
Burning cash (-2.1%)

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

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Stability

Debt / Equity
0.84
Moderate — manageable debt (0.84)
Interest Cover
6.09x
Adequate interest coverage (6.1x)

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

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Valuation

P/E Ratio (TTM)
28.3x
Growth-priced — P/E 28.3

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

P/E vs Forward
+19.4
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (28.3 → 9.0)

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Dividends

Dividend Yield
1.51%
Small dividend — 1.51% yield

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

Dividend Growth
+0.0%
Dividend flat

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