Fact based stock research
Southwest Airlines (NYSE:LUV)

US8447411088

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

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Southwest Airlines stock research in summary

southwest.com

ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Southwest Airlines (Airlines, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Southwest Airlines are a good value (attractively priced) with a consolidated Value Rank of 64 (better than 64% of alternatives) but show below-average growth (Growth Rank of 47), and are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Southwest Airlines's financial characteristics. As the company Southwest Airlines's key financial metrics exhibit good value (Obermatt Value Rank of 64) but low growth (Obermatt Growth Rank of 47) and risky financing practices (Obermatt Safety Rank of 31), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 64% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	64
Growth Rank	47
Safety Rank	31
Combined Rank	42

Country	USA
Industry	Airlines
Index	Dividends USA, S&P 500
Size class	X-Large

31-Jul-2025. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Southwest Airlines

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	47	59	83	64
GROWTH
GROWTH	48	61	39	47
SAFETY
SAFETY	59	63	32	31
SENTIMENT
SENTIMENT	19	24	43	^new
360° VIEW
360° VIEW	26	41	42	^new

Most recent update of the stock research: 31-Jul-2025. Financial reporting date used for calculating ranks: 31-Mar-2025. Stock research history is based on the Obermatt Method. The higher the rank, the better Southwest Airlines is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	47	59	83	64
GROWTH
GROWTH	48	61	39	47
SAFETY
SAFETY	59	63	32	31
COMBINED
COMBINED	45	81	49	42

Last update of combined financial performance: 31-Jul-2025. Stock analysis on combined financial performance: The higher the rank of Southwest Airlines the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 64 (better than 64% compared with alternatives), Southwest Airlines shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Southwest Airlines. Price-to-Sales (P/S) is 54, which means that the stock price compared with what market professionals expect for future sales is lower than for 54% of comparable companies, indicating a good value concerning Southwest Airlines's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 84, which means that dividends are expected to be higher than for 84% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 52% of alternatives (only 48% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 55% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 64, is a buy recommendation based on Southwest Airlines's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2022	2023	2024	2025
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	40	49	64	54
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	20	34	43	45
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	44	53	61	48
DIVIDEND YIELD
DIVIDEND YIELD	82	82	84	84
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	47	59	83	64

Last update of Value Rank: 31-Jul-2025. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Southwest Airlines; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Southwest Airlines shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Southwest Airlines. Sales Growth has a rank of 69 which means that currently, professionals expect the company to grow more than 69% of its competitors. Both Profit Growth, with a rank of 52, and Stock Returns, with a rank of 77, are also above average. But Capital Growth only has a rank of 6, which means that, currently, professionals expect the company to grow its invested capital less than 94% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2022	2023	2024	2025
REVENUE GROWTH
REVENUE GROWTH	82	61	39	69
PROFIT GROWTH
PROFIT GROWTH	53	75	86	52
CAPITAL GROWTH
CAPITAL GROWTH	47	61	26	6
STOCK RETURNS
STOCK RETURNS	27	15	27	77
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	48	61	39	47

Last update of Growth Rank: 31-Jul-2025. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Southwest Airlines.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company Southwest Airlines has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Southwest Airlines is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Southwest Airlines and the other two below average. Leverage is at a rank of 64 meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors.Refinancing is at a rank of 19, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 81% of its competitors. Liquidity is at a rank of 27, meaning that the company generates less profit to service its debt than 73% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), Southwest Airlines has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Southwest Airlines are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Southwest Airlines and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2022	2023	2024	2025
LEVERAGE
LEVERAGE	50	58	71	64
REFINANCING
REFINANCING	84	84	32	19
LIQUIDITY
LIQUIDITY	10	41	23	27
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	59	63	32	31

Last update of Safety Rank: 31-Jul-2025. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Southwest Airlines and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2022	2023	2024	2025
ANALYST OPINIONS
ANALYST OPINIONS	n/a	15	13	^new
OPINIONS CHANGE
OPINIONS CHANGE	3	46	77	^new
PRO HOLDINGS
PRO HOLDINGS	53	39	47	^new
MARKET PULSE
MARKET PULSE	42	52	22	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	19	24	43	^new

Last update of Sentiment Rank: 31-Jul-2025. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Southwest Airlines.
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