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Southwest Airlines CoFRA:SWN +0.80%82 Debt-to-EBITDA is 2.21 as of Mar. 2026, which is 22% above its 10-year median of 1.81. GuruFocus rates FRA:SWN with a GF Score™ of 82/100 and a GF Value™ of €36.66 (Modestly Overvalued). The stock has 3 warning signs investors should review. Among 869 Transportation companies, Southwest Airlines Co ranks better than 54.89% on this metric.
Debt-to-EBITDA measures a company's ability to pay off its debt.
A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt. According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.
The historical rank and industry rank for Southwest Airlines Co's Debt-to-EBITDA or its related term are showing as below:
FRA:SWN'
s Debt-to-EBITDA Range Over the Past 10 Years
Min: -4.54 Med: 1.81 Max: 4.06
Current: 2.35
During the past 13 years, the highest Debt-to-EBITDA Ratio of Southwest Airlines Co was 4.06. The lowest was -4.54. And the median was 1.81.
FRA:SWN's Debt-to-EBITDA is ranked better than 54.89% of 869
companies
in the Transportation industry
Industry Median: 2.64
vs FRA:SWN: 2.35
Southwest Airlines Co (FRA:SWN) Debt-to-EBITDA Explanation
A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt.
According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.
Southwest Airlines Co Debt-to-EBITDA Related Terms
Southwest Airlines Co Debt-to-EBITDA Historical Data
* Premium members only.
The historical data trend for Southwest Airlines Co's Debt-to-EBITDA can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FRA:SWN vs AAL, UAL, CPA: Debt-to-EBITDA Comparison
For the Airlines subindustry, Southwest Airlines Co's Debt-to-EBITDA, along with its competitors' market caps and Debt-to-EBITDA data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Southwest Airlines Co Debt-to-EBITDA vs Transportation Industry
For the Transportation industry and Industrials sector, Southwest Airlines Co's Debt-to-EBITDA distribution charts can be found below:
* The bar in red indicates where Southwest Airlines Co's Debt-to-EBITDA falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Debt-to-EBITDA, the EBITDA of the last fiscal year is used. In calculating the annualized quarterly data,
the EBITDA data used here is four times the quarterly (Mar. 2026) EBITDA data.
Southwest Airlines Co (FRA:SWN) has a Debt-to-EBITDA of 2.21 as of Mar. 2026. Debt-to-EBITDA ratio represents the ratio of total debt to total earnings before interest, taxes, depreciation and amortization. View historical data on Southwest Airlines Co. This is 22% above median its historical median of 1.81. According to the industry distribution chart, Southwest Airlines Co ranks #392 out of 869 companies in the Transportation industry, placing it in the top 45.1%.
Is Southwest Airlines Co's Debt-to-EBITDA too high?
Southwest Airlines Co's current Debt-to-EBITDA of 2.21 is 22% above median its 10-year median of 1.81. The Transportation industry median Debt-to-EBITDA is 2.64. Southwest Airlines Co's value of 2.21 is 16.3% below this industry median. Based on the distribution chart, Southwest Airlines Co ranks #392 out of 869 companies in the Transportation industry, which is above the industry midpoint. Overall, Southwest Airlines Co has a GF Score™ of 82/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Southwest Airlines Co's Debt-to-EBITDA compare to AAL and UAL?
According to the Transportation industry distribution chart, Southwest Airlines Co ranks #392 out of 869 companies for Debt-to-EBITDA. This puts Southwest Airlines Co in the upper half of its industry. The industry median Debt-to-EBITDA is 2.64. Southwest Airlines Co's value of 2.21 is 16.3% below this benchmark. While the company's 10-year median is 1.81 vs. the industry median of 2.64, Southwest Airlines Co has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Debt-to-EBITDA for a Transportation company?
The median Debt-to-EBITDA among Transportation companies is 2.64, based on 869 companies in the industry. Companies in the top quartile (top 25%) have a Debt-to-EBITDA significantly above this median, while those in the bottom quartile fall well below. However, Debt-to-EBITDA should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Southwest Airlines Co's current Debt-to-EBITDA of 2.21 is 16.3% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Debt-to-EBITDA mean?
A high Debt-to-EBITDA can signal that a stock is expensive relative to its fundamentals. Debt-to-EBITDA ratio represents the ratio of total debt to total earnings before interest, taxes, depreciation and amortization. View historical data on Southwest Airlines Co. For the Transportation industry, the median Debt-to-EBITDA is 2.64 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Southwest Airlines Co's current Debt-to-EBITDA is 2.21, which is 22% above median its own 10-year median of 1.81. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Southwest Airlines Co stock overvalued right now?
Based on GuruFocus' analysis, Southwest Airlines Co (FRA:SWN) is currently considered Modestly Overvalued. The stock's GF Value™ is €36.66, compared to a current price of €41.67 — trading 13.7% above its estimated fair value. The current Debt-to-EBITDA is 2.21, which is 22% above median its 10-year median of 1.81 and 16.3% below the Transportation industry median of 2.64. Southwest Airlines Co's overall GF Score™ is 82/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Debt-to-EBITDA calculated?
Debt-to-EBITDA is calculated from a company's financial statements. For Southwest Airlines Co (FRA:SWN), the current Debt-to-EBITDA is 2.21 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Southwest Airlines Co (FRA:SWN) Overvalued in 2026?
Based on GuruFocus' analysis, Southwest Airlines Co stock appears to be overvalued.
The current stock price of €41.67 is trading 13.7% above its estimated GF Value™ of €36.66.
GuruFocus considers Southwest Airlines Co to be Modestly Overvalued.
Key valuation signals for FRA:SWN:
Debt-to-EBITDA: 2.21 (22% above median its 10-year median of 1.81)
GF Value™: €36.66 vs. price of €41.67 (13.7% above fair value)
Industry Position: 16.3% below the Transportation median (#392 of 869)
No single metric tells the full story. See the FRA:SWN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Southwest Airlines is the largest domestic air carrier in the United States by passengers boarded. Southwest operates nearly 800 aircraft in an all-Boeing 737 fleet. Despite offering some longer routes and a few perks for business travelers, the airline predominantly specializes in short-haul, leisure flights operated with a simple cabin configuration in a point-to-point network. In early 2026, Southwest modified its cabins to offer some rows with extra legroom, its ticketing process and merchandising to offer assigned seats, and more fare categories to include a basic economy class that appears for the first time in travel aggregators' search results and more directly competes with other airlines' offerings.
82GF Score
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