Southwest Airlines CoSTU:SWN +4.13%83 ROE % is 12.31% as of Mar. 2026, which is 62% above its 10-year median of 7.62. GuruFocus rates STU:SWN with a GF Score™ of 83/100 and a GF Value™ of €36.52 (Modestly Overvalued). The stock has 6 warning signs investors should review. Among 991 Transportation companies, Southwest Airlines Co ranks better than 62.36% on this metric.
The historical rank and industry rank for Southwest Airlines Co's ROE % or its related term are showing as below:
STU:SWN'
s ROE % Range Over the Past 10 Years
Min: -32.86 Med: 7.62 Max: 37.13
Current: 10.21
During the past 13 years, Southwest Airlines Co's highest ROE % was 37.13%. The lowest was -32.86%. And the median was 7.62%.
STU:SWN's ROE % is ranked better than 62.36% of 991
companies
in the Transportation industry
Industry Median: 7.6
vs STU:SWN: 10.21
Southwest Airlines Co (STU:SWN) ROE % Explanation
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* 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.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
* 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.
For the Airlines subindustry, Southwest Airlines Co's ROE %, along with its competitors' market caps and ROE % 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 ROE % vs Transportation Industry
For the Transportation industry and Industrials sector, Southwest Airlines Co's ROE % distribution charts can be found below:
* The bar in red indicates where Southwest Airlines Co's ROE % 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 ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
ROE % is displayed in the 30-year financial page.
Southwest Airlines Co (STU:SWN) has a ROE % of 12.31% as of Mar. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Southwest Airlines Co and its competitors. This is 62% above median its historical median of 7.62. According to the industry distribution chart, Southwest Airlines Co ranks #373 out of 991 companies in the Transportation industry, placing it in the top 37.6%.
Is Southwest Airlines Co's ROE % too high?
Southwest Airlines Co's current ROE % of 12.31% is 62% above median its 10-year median of 7.62. The Transportation industry median ROE % is 7.60. Southwest Airlines Co's value of 12.31% is 62% above this industry median. Based on the distribution chart, Southwest Airlines Co ranks #373 out of 991 companies in the Transportation industry, which is above the industry midpoint. Overall, Southwest Airlines Co has a GF Score™ of 83/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Southwest Airlines Co's ROE % compare to AAL and CPA?
According to the Transportation industry distribution chart, Southwest Airlines Co ranks #373 out of 991 companies for ROE %. This puts Southwest Airlines Co in the upper half of its industry. The industry median ROE % is 7.60. Southwest Airlines Co's value of 12.31% is 62% above this benchmark. While the company's 10-year median is 7.62 vs. the industry median of 7.60, Southwest Airlines Co has consistently been above 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 ROE % for a Transportation company?
The median ROE % among Transportation companies is 7.60, based on 991 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Southwest Airlines Co's current ROE % of 12.31% is 62% above 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 ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Southwest Airlines Co and its competitors. For the Transportation industry, the median ROE % is 7.60 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Southwest Airlines Co's current ROE % is 12.31%, which is 62% above median its own 10-year median of 7.62. 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 (STU:SWN) is currently considered Modestly Overvalued. The stock's GF Value™ is €36.52, compared to a current price of €45.12 — trading 23.5% above its estimated fair value. The current ROE % is 12.31%, which is 62% above median its 10-year median of 7.62 and 62% above the Transportation industry median of 7.60. Southwest Airlines Co's overall GF Score™ is 83/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROE % calculated?
ROE % is calculated from a company's financial statements. For Southwest Airlines Co (STU:SWN), the current ROE % is 12.31% 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 (STU:SWN) Overvalued in 2026?
Based on GuruFocus' analysis, Southwest Airlines Co stock appears to be overvalued.
The current stock price of €45.12 is trading 23.5% above its estimated GF Value™ of €36.52.
GuruFocus considers Southwest Airlines Co to be Modestly Overvalued.
Key valuation signals for STU:SWN:
ROE %: 12.31% (62% above median its 10-year median of 7.62)
GF Value™: €36.52 vs. price of €45.12 (23.5% above fair value)
Industry Position: 62% above the Transportation median (#373 of 991)
No single metric tells the full story. See the STU: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.
83GF Score
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