Is the business good?
How good a business is LUV?
Southwest Airlines earns 8.9% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
8.9%
Return on invested capital · cost of capital 9.0% · 0.10 points below what the capital costs: growth destroys value
- Operating margin
- 3.5%
Operating margin · Airlines median 6.3% · 12 months to Q2 2026
- Cash conversion
- −0.54×
Cash conversion · −0.80× a year ago · some of the reported profit has not turned into cash yet
- Share count, year on year
- −8.9%
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 Q2 2026
- 3.5%
- Net margin12 months to Q2 2026
- 2.8%
- Free cash flow margin
- −1.5%
- Revenue, trailing twelve months
- $30.1B
- Free cash flow, trailing twelve months
- −$455M
- Net income, trailing twelve months
- $837M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 8.9%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.