Southwest Airlines Company (LUV) Stock Analysis — PE Ratio, PS Ratio, Intrinsic Value & 2030 Price Target
Southwest Airlines Company stock (LUV) is currently trading at $40.19. Southwest Airlines Company PE ratio is 50.87. Southwest Airlines Company PS ratio (Price-to-Sales) is 0.74. Analyst consensus price target for LUV is $47.39. WallStSmart rates LUV as Hold.
- LUV PE ratio analysis and historical PE chart
- LUV PS ratio (Price-to-Sales) history and trend
- LUV intrinsic value — DCF, Graham Number, EPV models
- LUV stock price prediction 2025 2026 2027 2028 2029 2030
- LUV fair value vs current price
- LUV insider transactions and insider buying
- Is LUV undervalued or overvalued?
- Southwest Airlines Company financial analysis — revenue, earnings, cash flow
- LUV Piotroski F-Score and Altman Z-Score
- LUV analyst price target and Smart Rating
Southwest Airlines Company
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LUV Intrinsic Value Analysis for Value Investors
Benjamin Graham Formula · Southwest Airlines Company (LUV)
LUV trades 39% above its Graham fair value of $36.97, indicating the stock may be overvalued at current levels.
Based on Benjamin Graham Formula. Growth rate capped at 25%. For informational purposes only. Not financial advice.
Smart Analysis
Southwest Airlines Company (LUV) · 10 metrics scored
Smart Score
Category Performance
WallStSmart pulls financial metrics like revenue growth, profit margins, and valuation ratios and scores each one from 0 to 10 based on how strong or weak it is. Those 10 scores are grouped into 4 categories: Growth, Profitability, Valuation, and Quality — which form the 4 axes of the spider chart you see. The categories are then combined into a final score out of 100, but not equally. Growth and Profitability together count for 60% of the total, because a fast-growing profitable business matters more than just a cheap one. That final number maps to a rating (Strong Buy, Buy, Hold, Avoid) and a letter grade, giving you one clear Stock Rating.
Investment Thesis
Strong fundamentals in market cap, peg ratio, price/sales. Concerns around return on equity and operating margin. Fundamentals are solid but monitor weak areas for improvement.
Southwest Airlines Company (LUV) Key Strengths (5)
Growing significantly faster than its price suggests
Paying less than $1 for every $1 of annual revenue
Earnings per share surging 50.80% year-over-year
97.74% of shares held by major funds and institutions
Large-cap company with substantial market presence
Supporting Valuation Data
Southwest Airlines Company (LUV) Areas to Watch (5)
Very low returns on shareholder equity
Very thin margins with limited operational efficiency
Very thin margins, barely profitable
Modest revenue growth at 7.40%
Fairly priced relative to book value
Supporting Valuation Data
Southwest Airlines Company (LUV) Detailed Analysis Report
Overall Assessment
This company scores 63/100 in our Smart Analysis, earning a C+ grade. Out of 10 metrics analyzed, 5 register as strengths (avg 9.8/10) while 5 fall into concern territory (avg 3.0/10). The category breakdown reveals uneven performance, with some areas requiring attention.
The Bull Case
The strongest argument centers on PEG Ratio, Price/Sales, EPS Growth. Valuation metrics including PEG Ratio (0.19), Price/Sales (0.74) suggest the stock is attractively priced. Growth metrics are encouraging with EPS Growth at 50.80%.
The Bear Case
The primary concerns are Return on Equity, Operating Margin, Profit Margin. Some valuation metrics including Price/Book (2.43) suggest expensive pricing. Growth concerns include Revenue Growth at 7.40%, which may limit upside. Profitability pressure is visible in Return on Equity at 4.81%, Operating Margin at 5.09%, Profit Margin at 1.57%.
Key Dynamics to Monitor
Three factors to monitor going forward. First, whether Return on Equity improves, as this is the primary drag on the overall score. Second, margin trajectory, with Return on Equity at 4.81% needing improvement to support the investment thesis. Third, growth sustainability, with Revenue Growth at 7.40% needing to reaccelerate.
Risk Considerations
Based on the metric profile, this is a moderate-to-high risk investment. Strengths and concerns are roughly balanced. Investors should size positions according to their risk tolerance and maintain diversification.
Bottom Line
Mixed fundamentals with both positives (PEG Ratio, Price/Sales) and negatives (Return on Equity, Operating Margin). A cautious approach is warranted. Monitor for improvement in weak areas before increasing conviction.
Disclaimer: Smart Analysis is a scoring system developed by WallStSmart Team. Scores update daily using multi-model valuation framework. Always conduct your own research and consult with financial advisors before making investment decisions.
LUV Price-to-Sales(PS) Ratio Chart
Historical valuation based on market cap ÷ trailing 12-month revenue
LUV's Price-to-Sales ratio of 0.74x sits near its historical average of 0.78x (29th percentile), suggesting the market is pricing in steady-state growth. The current valuation is 19% below its historical high of 0.91x set in Mar 2026, and 4% above its historical low of 0.71x in Mar 2026. Over the past 12 months, the PS ratio has compressed from ~0.9x as trailing revenue scaled faster than the stock price.
WallStSmart Analysis Synopsis
Data-driven financial summary for Southwest Airlines Company (LUV) · INDUSTRIALS › AIRLINES
The Big Picture
Southwest Airlines Company is a mature, profitable business with steady cash generation. Revenue reached 28.1B with 7% growth year-over-year. Profit margins are strong at 157.0%, reflecting pricing power and operational efficiency.
Key Findings
ROE of 481.0% means the company generates strong returns on shareholder equity. Above 20% is considered top-tier.
Free cash flow is -564M, meaning the company is burning cash. This may be acceptable for high-growth companies investing heavily.
What to Watch Next
Valuation compression risk at a P/E of 50.9x. Any growth miss could trigger a sharp correction.
Sector dynamics: monitor AIRLINES industry trends, competitive moves, and regulatory changes that could impact Southwest Airlines Company.
Bottom Line
Southwest Airlines Company is a well-established business delivering consistent profitability with 157.0% margins. The growth phase may be slowing, but strong cash generation and operational efficiency make it suitable for investors seeking reliability over excitement.
This synopsis is generated from publicly available financial data. It is not financial advice. Always conduct your own research and consult a qualified financial advisor before making investment decisions.
Insider Transactions
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About Southwest Airlines Company(LUV)
NYSE
INDUSTRIALS
AIRLINES
USA
Southwest Airlines Co., typically referred to as Southwest, is one of the major airlines of the United States and the world's largest low-cost carrier airline. It is headquartered in Dallas, Texas.