LUVNEUTRAL

Gross Margin

18.9%

Updated 200h ago

Sector Performance

13th percentile

LUV

18.9%

Sector Median

44.7%

Sector Avg

45.2%

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Deep Analysis

Gross margin is the percentage of revenue left after subtracting the cost of goods sold, showing how efficiently a company produces its product.

LUV's current gross margin of 18.9% is well below the sector median of 44.4%, placing it in the 13th percentile among its sector peers — meaning 87% of peers have a higher margin. No year-over-year or quarter-over-quarter changes are available, so no trend can be assessed from the data provided. The combination of a low gross margin with no trend data implies an elevated risk relative to the sector, as the company has less room to cover operating expenses or absorb cost increases, but the absence of a trend leaves uncertainty about whether this level is stable or deteriorating. This metric directly supports the overall NEUTRAL verdict: the weak margin signals caution, but without a trend, it does not clearly indicate a worsening or improving position, keeping the stock in a balanced-risk category.

Frequently Asked Questions

What does the Gross Margin tell investors about LUV?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

Who are LUV's closest peers by Gross Margin?

The closest peers by Gross Margin include: WHR (12.7%), JBHT (12.6%), DVN (12.1%), F (11.9%), GM (11.5%).

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.