Aercap Holdings (AER) AI Stock Analysis

• Market Cap: $21.34B
• Dividend Yield: 0.87%
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.84
• Revenue Growth: 3.24%
• EPS Growth: 4.46%
• Country: US
• Employees: 698
• Sector: Industrials
• Sector Strength: 72
• Industry: Rental & Leasing Services
• EPS (TTM): 2.83
• Shares Outstanding: 176,566,560
• 10 Day Avg. Volume: 1,536,306
• 30 Day Avg. Volume: 1,736,987
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 3.00
• Enterprise Value/Revenue: 8.03
• Enterprise Value/Gross Profit: 20.60
• Enterprise Value/Ebitda: 12.24
• 1Y Price Target: $130.75
• Price Target Upside: 7.84% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 79 Outperform
• Price Target: $131.00 ▲(8.05% Upside)

AerCap's strong financial performance, technical indicators, and positive earnings call sentiment contribute to a high overall score. The company's undervaluation and robust demand for its assets further enhance its attractiveness. However, high leverage and negative free cash flow due to capital investments pose risks that need careful management.

Positive Factors

Strong Revenue Growth

Aercap's consistent revenue growth indicates strong demand for its leasing services, enhancing its market position and long-term profitability.

High Utilization Rates

High utilization and extension rates reflect robust demand for Aercap's aircraft, ensuring stable revenue streams and operational efficiency.

Strong Liquidity Position

A strong liquidity position provides Aercap with financial flexibility to invest in growth opportunities and manage debt obligations effectively.

Negative Factors

High Leverage

High leverage can increase financial risk, potentially impacting Aercap's ability to fund operations and invest in growth during economic downturns.

Negative Free Cash Flow

Negative free cash flow suggests that Aercap's aggressive reinvestment strategy may strain cash reserves, impacting financial stability if not managed carefully.

Higher SG&A Expenses

Rising SG&A expenses can pressure profit margins, potentially reducing net income and impacting Aercap's ability to maintain cost efficiency.

Aercap Holdings Business Overview & Revenue Model

Company Description

Aercap Holdings (AER) is a global leader in aircraft leasing and aviation finance, specializing in the acquisition, management, and disposition of commercial aircraft. Founded in 1995 and headquartered in Dublin, Ireland, the company operates in the aerospace sector, primarily serving airlines and cargo operators around the world. Aercap's core services include providing operational leasing solutions, asset management, and financing for aircraft and engines, helping clients optimize their fleet operations and manage capital expenditures.

How the Company Makes Money

Aercap generates revenue primarily through leasing commercial aircraft to airlines and cargo operators on long-term contracts, which provide a steady stream of rental income. The company also earns money from the sale of aircraft and engines, as well as through management fees from its aircraft management services. Additional revenue streams include financing arrangements and sales of aviation-related services. Aercap benefits from its extensive portfolio of aircraft, which includes a diverse range of commercial jets and cargo aircraft, and maintains significant partnerships with aircraft manufacturers and airlines, enhancing its market position and revenue generation capabilities.

Aercap Holdings Financial Statement Overview

Summary

Aercap Holdings demonstrates solid revenue and profit growth, with strong operational efficiency as evidenced by high EBIT and EBITDA margins. However, the company faces challenges with its high leverage and negative free cash flow, largely due to substantial capital investments. These investments may drive future growth, but they also increase financial risk. Balancing debt levels while maintaining growth will be crucial for long-term stability and profitability.

Income Statement

The revenue growth rate has been healthy with a consistent upward trajectory over the past few years, though there was a slight dip in the latest TTM compared to the previous annual period. Gross profit margins are strong and show stability, while the net profit margin has improved significantly from losses in earlier years. The EBIT and EBITDA margins reflect strong operational efficiency. However, the recent decrease in gross profit compared to previous years suggests potential cost pressures.

Balance Sheet

The company's debt-to-equity ratio is relatively high, indicating a leveraged position, which could pose risks if not managed prudently. However, the equity ratio has shown improvement, suggesting that the company is strengthening its equity base relative to assets. Return on equity has seen significant improvement, driven by rising net income, which is a positive indicator of profitability for shareholders.

Cash Flow

Operating cash flow remains robust, but free cash flow has turned negative in recent periods due to large capital expenditures, indicating aggressive reinvestment strategies. The cash flow ratios indicate that while the company generates strong operating cash, its conversion into free cash flow is hindered by high investment spending.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.98B	8.00B	7.58B	7.01B	4.59B	4.49B
Gross Profit	3.11B	4.61B	4.34B	2.21B	1.30B	2.52B
EBITDA	5.23B	4.15B	3.91B	4.20B	2.72B	3.93B
Net Income	2.14B	2.10B	3.14B	-726.04M	1.00B	-298.57M
Balance Sheet
Total Assets	72.56B	71.44B	71.27B	69.73B	74.57B	42.05B
Cash, Cash Equivalents and Short-Term Investments	1.06B	1.21B	1.63B	1.60B	1.73B	1.25B
Total Debt	46.24B	45.35B	46.58B	46.67B	50.55B	28.84B
Total Liabilities	55.36B	54.26B	54.69B	53.53B	57.92B	33.12B
Stockholders Equity	17.19B	17.18B	16.59B	16.12B	16.57B	8.86B
Cash Flow
Free Cash Flow	-2.09B	-1.18B	-970.95M	1.30B	1.90B	946.66M
Operating Cash Flow	5.38B	5.44B	5.26B	5.17B	3.69B	2.13B
Investing Cash Flow	-4.88B	-3.72B	-3.18B	-2.16B	-23.46B	-712.29M
Financing Cash Flow	-720.10M	-2.13B	-2.01B	-3.16B	20.18B	-1.23B

Aercap Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 121.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AER, the sentiment is Positive. The current price of 121.24 is below the 20-day moving average (MA) of 122.07, above the 50-day MA of 115.99, and above the 200-day MA of 105.81, indicating a neutral trend. The MACD of 1.48 indicates Positive momentum. The RSI at 55.23 is Neutral, neither overbought nor oversold. The STOCH value of 29.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AER.

Aercap Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AL	82 Outperform	7.10B	7.72	11.89%	1.38%	8.08%	76.55%
MGRC	81 Outperform	3.00B	11.88	21.70%	1.56%	8.78%	117.40%
AER	79 Outperform	$21.34B	7.28	16.87%	0.87%	3.24%	4.46%
WLFC	71 Outperform	1.03B	8.96	17.97%	0.67%	30.08%	32.62%
FTAI	61 Neutral	17.85B	43.16	269.35%	0.67%	55.05%	0.00%
HRI	56 Neutral	4.24B	148.00	1.20%	2.16%	11.41%	-92.67%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%