Is Southwest Airlines Stock Outperforming Its Rivals?
Southwest Airlines’ (LUV) stock has significantly outperformed over the past year, but how does its high valuation truly stack up against peers navigating a dynamic travel landscape? A closer look reveals strong market returns, yet modest revenue growth, very thin operating margins, and negative free cash flow compared to more profitable rivals. LUV’s shares have surged, driven by strategic transformations including new seating and fee initiatives, positioning it as a high-conviction turnaround story. Despite this momentum, the company faces “Very Weak” profitability and “High” valuation, which is expensive compared to the broader market.
- Operating Margin: LUV’s 1.5% trails DAL’s 9.2%, reflecting higher labor costs and operational issues impacting its traditional low-cost model.
- Revenue Growth: LUV’s 2.1% lags DAL, UAL, ALK due to capacity constraints, but new initiatives like assigned seating aim to boost future revenue.
- Performance: LUV’s 73.9% gain outpaced peers, with its 71.8 P/E reflecting investor optimism for strategic shifts like new revenue initiatives.
Here’s how Southwest Airlines stacks up across size, valuation, and profitability versus key peers.
| LUV | DAL | AAL | UAL | JBLU | ALK | |
|---|---|---|---|---|---|---|
| Market Cap ($ Bil) | 31.7 | 45.0 | 9.0 | 36.6 | 2.2 | 6.1 |
| Revenue ($ Bil) | 28.1 | 63.4 | 54.3 | 59.1 | 9.1 | 14.2 |
| PE Ratio | 71.8 | 9.0 | 14.9 | 10.9 | -3.7 | 60.7 |
| LTM Revenue Growth | 2.1% | 2.8% | 1.3% | 3.5% | -2.3% | 21.3% |
| LTM Operating Margin | 1.5% | 9.2% | 4.2% | 8.4% | -3.7% | 3.9% |
| LTM FCF Margin | -3.0% | 6.1% | 1.6% | 4.3% | -13.4% | -2.4% |
| 12M Market Return | 73.9% | 10.2% | -14.3% | 10.3% | -17.5% | -30.2% |
For more details on Southwest Airlines, read Buy or Sell LUV Stock. Below we compare LUV’s growth, margin, and valuation with peers across years
Revenue Growth Comparison
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| LTM | 2025 | 2024 | 2023 | 2022 | |
|---|---|---|---|---|---|
| LUV | 2.1% | 2.1% | 5.3% | 9.6% | |
| DAL | 2.8% | 2.8% | 6.2% | 14.8% | |
| AAL | 1.3% | – | 2.7% | 7.8% | 63.9% |
| UAL | 3.5% | 3.5% | 6.2% | 19.5% | |
| JBLU | -2.3% | -2.3% | -3.5% | 5.0% | |
| ALK | 21.3% | 21.3% | 12.6% | 8.1% |
Operating Margin Comparison
| LTM | 2025 | 2024 | 2023 | 2022 | |
|---|---|---|---|---|---|
| LUV | 1.5% | 1.5% | 1.2% | 0.9% | |
| DAL | 9.2% | 9.2% | 9.7% | 9.5% | |
| AAL | 4.2% | – | 5.9% | 7.6% | 3.7% |
| UAL | 8.4% | 8.4% | 9.1% | 9.6% | |
| JBLU | -3.7% | -3.7% | -1.0% | -0.3% | |
| ALK | 3.9% | 3.9% | 7.8% | 8.0% |
PE Ratio Comparison
| LTM | 2025 | 2024 | 2023 | 2022 | |
|---|---|---|---|---|---|
| LUV | 71.8 | 52.8 | 43.2 | 37.0 | |
| DAL | 9.0 | 9.0 | 11.2 | 5.6 | |
| AAL | 14.9 | – | 11.9 | 13.9 | 70.4 |
| UAL | 10.9 | 10.8 | 10.1 | 5.2 | |
| JBLU | -3.7 | -2.7 | -3.4 | -6.0 | |
| ALK | 60.7 | 59.4 | 20.7 | 21.2 |
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