LUVSouthwest Airlines
Is the business good?
The checks split: earnings fully cash-backed (2.6×) and margins widening, but returns that lean on debt.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
Leverage-amplified, a high assets-to-equity ratio does much of the work. ROE 11% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is LUV?
Southwest Airlines earns 11% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 2.4 points above what the capital costs: growth creates value
- Operating margin
- 4.4%
Operating margin · Airlines median 7.5% · 12 months to Q3 2026
- Cash conversion
- 2.56×
Cash conversion · 8.22× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −6.1%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | −42% |
| FY2021 | 11% |
| FY2022 | 4.3% |
| FY2023 | 0.86% |
| FY2024 | 1.2% |
| FY2025 | 1.5% |
Details›
- Operating margin12 months to Q3 2026
- 4.4%
- Net margin12 months to Q3 2026
- 3.3%
- Free cash flow margin
- −1.4%
- Revenue, trailing twelve months
- $31.5B
- Free cash flow, trailing twelve months
- −$449M
- Net income, trailing twelve months
- $1.05B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 11%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Customers and suppliers
Who buys from LUV and who it buys from, as the companies report it.
None disclosed.
- BABoeing
Named in LUV’s FY2025 10-K
A company has to disclose every customer behind 10% or more of its revenue. Each share comes from the latest annual report of the company that states it and shows on both companies’ pages; LUV’s own figures are from its FY2025 10-K. Smaller customers and suppliers go unreported. A link without a share is named in one of the two companies’ annual reports, without a figure.
Airlines
The closest names by size in the same industry