Willis Lease Finance Corporation (WLFC): A Bull Case Theory

Insider Monkey11-18

We came across a bullish thesis on Willis Lease Finance Corporation (WLFC) on Substack by LTValue. In this article, we will summarize the bulls’ thesis on WLFC. Willis Lease Finance Corporation (WLFC)...

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In this article, we will summarize the bulls’ thesis on WLFC. Willis Lease Finance Corporation (WLFC)...</p>\n\n<a href=\"https://finance.yahoo.com/news/willis-lease-finance-corporation-wlfc-215323678.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0256331488.USD","symbol_name":"SCHRODER ISF GLOBAL ENERGY \"A\" ACC","start_time":0,"source_url":"https://finance.yahoo.com/news/willis-lease-finance-corporation-wlfc-215323678.html","article_id":"2484654277","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/LHduskA9Z8JGM15sfoLyVw--~B/aD01NjU7dz04NDc7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/insidermonkey.com/b51d4083c48c068654f8ae5eac5e8ac2"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2484654277","pubTimestamp":1731880403,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"We came across abullish thesison Willis Lease Finance Corporation  on Substack by LTValue. In this article, we will summarize the bulls’ thesis on WLFC. Willis Lease Finance Corporation 's share was trading at $199.88 as of Nov 13th. WLFC’s trailing P/E was 14.18 according to Yahoo Finance.Willis Lease Finance Corp.  is a leading player in the commercial aircraft engine leasing and servicing industry, with a globally diverse customer base and a vertically integrated business model. Founded in 1985 and listed on NASDAQ since 1996, WLFC has grown to surpass independent competitors in engine leasing, purchasing, and sales volumes. The company provides a range of services, including engine leasing, maintenance, repair and overhaul  services, parts supply, and asset management. Its operations are supported by several subsidiaries, such as Willis Aeronautical Services , which handles spare parts sales, and Willis Asset Management , which provides asset management and cost prediction services","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0256331488.USD":"SCHRODER ISF GLOBAL ENERGY \"A\" ACC","BK4585":"ETF&股票定投概念","BK4213":"石油与天然气的勘探与生产","CAGR":"California Grapes International, Inc.","BK4588":"碎股","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","BK4159":"经销商","WLFC":"威利斯金融租赁","MRO":"马拉松石油","BK4104":"贸易公司与经销商"},"translate_title":"威利斯租赁金融公司(WLFC)：牛市案例理论","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CAGR":1,"DCF":1,"MRO":1,"WLFC":1},"content_text":"We came across a bullish thesis on Willis Lease Finance Corporation (WLFC) on Substack by LTValue. In this article, we will summarize the bulls’ thesis on WLFC. Willis Lease Finance Corporation (WLFC)'s share was trading at $199.88 as of Nov 13th. WLFC’s trailing P/E was 14.18 according to Yahoo Finance.\n Copyright: \n36clicks / 123RF Stock Photo\nWillis Lease Finance Corp. (WLFC) is a leading player in the commercial aircraft engine leasing and servicing industry, with a globally diverse customer base and a vertically integrated business model. Founded in 1985 and listed on NASDAQ since 1996, WLFC has grown to surpass independent competitors in engine leasing, purchasing, and sales volumes. The company provides a range of services, including engine leasing, maintenance, repair and overhaul (MRO) services, parts supply, and asset management. Its operations are supported by several subsidiaries, such as Willis Aeronautical Services (WASI), which handles spare parts sales, and Willis Asset Management (WAML), which provides asset management and cost prediction services. WLFC’s global operations extend across North America, Asia, and Europe, with a customer base consisting primarily of large, financially stable, state-owned airlines.\nWLFC’s business model is structured around the residual value of aircraft engines, offering time and cost savings over traditional MRO services. Its triple net operating lease structure ensures that maintenance, repairs, and insurance costs are covered by the lease payments from its customers, providing stability and long-term revenue streams. The company’s portfolio includes both narrow-body and wide-body engines, as well as aircraft and parts, which are utilized globally. In 2023, WLFC’s engine portfolio saw a healthy utilization rate of 85%, with the company capitalizing on shorter-term leases that allow for re-pricing at higher rates, thus benefiting from favorable market conditions. This flexibility has positioned WLFC to leverage industry dynamics, such as the aging aircraft fleet and delayed engine deliveries, which are driving heightened demand for legacy engines.\nThe company’s growth trajectory has been impressive, with pre-tax income expanding at a 20% compound annual growth rate (CAGR) from 2010 to 2019, from $20 million to $89 million. Revenue also increased at an 11% CAGR during this period, rising from $148 million to $409 million. Despite the severe impacts of COVID-19 on the aerospace industry, WLFC has rebounded strongly, with a focus on maintenance reserves, MRO services, and engine exchange business. The company’s Aerospace Products segment, which includes module swaps and parts sales, is expected to see impressive growth, with EBITDA forecasted to grow at a 64% CAGR from FY23 to FY26. This reflects a conservative outlook for WLFC, given its lower exposure to module swaps compared to other industry players.\nIn terms of valuation, WLFC is estimated to be worth around $400 per share based on discounted cash flow (DCF) assumptions. When compared to peers, WLFC’s vertically integrated model, which includes both engine leasing and MRO capabilities, sets it apart from companies like AER and AL, which focus more on aviation leasing. Engine leasing, due to engines’ superior residual value retention, portability, and lower exposure to market volatility, justifies WLFC’s premium over aircraft leasing companies. However, WLFC faces risks, including macroeconomic challenges related to air travel demand, and concerns regarding the Willis family’s influence on the company. Past attempts to take the company private, coupled with executive compensation issues, have raised concerns among investors. Nevertheless, WLFC has effectively navigated the challenges of the pandemic, and its management has demonstrated strong capital allocation practices, reflected in the company’s solid share price performance.\nLooking forward, WLFC has several potential catalysts for growth. Continued demand for engine exchange services and module swaps, driven by the need to service older-generation engines, is expected to boost revenues. Additionally, WLFC’s narrow-body engine portfolio is currently undervalued by around $400 million, which is expected to result in significant gains on equipment sales. There is also potential for a buyout by private equity firms or other commercial aerospace leasing companies, which could unlock additional value for shareholders. WLFC’s strategic positioning in the aircraft engine leasing and MRO sectors, combined with its strong financial performance and growth potential, presents a compelling investment opportunity, despite the challenges the company faces.\nWillis Lease Finance Corporation (WLFC) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 4 hedge fund portfolios held WLFC at the end of the second quarter which was 3 in the previous quarter. While we acknowledge the risk and potential of WLFC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WLFC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.\nREAD NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.\nDisclosure: None. This article was originally published at Insider Monkey.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2484654277"}