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Willis Lease Finance Corp. (WLFC)
NASDAQ:WLFC

Willis Lease Finance (WLFC) AI Stock Analysis

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Willis Lease Finance

(NASDAQ:WLFC)

Rating:69Neutral
Price Target:
$159.00
▲(10.03%Upside)
Willis Lease Finance demonstrates robust financial performance with notable revenue growth and strategic transactions, despite challenges like high leverage and negative cash flow. The technical outlook is bearish, but the valuation appears attractive. Positive earnings call outcomes and beneficial corporate events further support the stock's potential.

Willis Lease Finance (WLFC) vs. SPDR S&P 500 ETF (SPY)

Willis Lease Finance Business Overview & Revenue Model

Company DescriptionWillis Lease Finance Corporation operates as a lessor and servicer of commercial aircraft and aircraft engines worldwide. The company operates through two segments, Leasing and Related Operations, and Spare Parts Sales. The Leasing and Related Operations segment engages in acquiring and leasing commercial aircraft, aircraft engines, and other aircraft equipment, as well as the purchase and resale of commercial aircraft engines and other aircraft equipment, and other related businesses. The Spare Parts Sales segment purchases and resells after-market engine parts, whole engines, engine modules, and portable aircraft components. The company also focuses on engine management and consulting business. It serves commercial aircraft operators, as well as maintenance, repair, and overhaul organizations. As of December 31, 2021, it had a total lease portfolio of 304 engines, 12 aircraft, one marine vessel, and other leased parts and equipment, and with 76 lessees in 40 countries; and managed a total lease portfolio of 475 engines, aircraft, and related equipment for other parties. The company was founded in 1985 and is headquartered in Coconut Creek, Florida.
How the Company Makes MoneyWillis Lease Finance makes money primarily through leasing aircraft engines and related equipment to commercial airlines, OEMs, and MRO facilities. The company's revenue model is based on long-term and short-term lease agreements, where clients pay a monthly or periodic fee for the use of engines and auxiliary power units. Additionally, WLFC generates income through the sale of spare parts and engines, as well as providing maintenance services and asset management solutions. The company's strategic partnerships with airlines and manufacturers enhance its revenue streams by ensuring a steady demand for its leasing and maintenance services. Furthermore, WLFC's investment in innovative programs, such as its ConstantThrust program, offers flexible leasing options that adjust to the changing needs of the aviation sector, thereby contributing to its financial performance.

Willis Lease Finance Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: -7.35%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong start to 2025 with record revenues and significant strategic transactions. However, increased G&A expenses and finance costs posed challenges. Overall, the positive aspects, such as improved utilization and growth, outweigh the negatives.
Q1-2025 Updates
Positive Updates
Strong Revenue and Growth
Record quarterly revenues of $157.7 million, up 33% from the comparable quarter in 2024, driven by core lease rent revenue and maintenance reserve revenues.
Improved Utilization Rate
Portfolio utilization grew from 76.7% at year-end 2024 to 86.4% by the end of Q1 2025.
Significant Spare Parts Sales Increase
Spare parts and equipment sales to third parties increased by 455% to $18.2 million in Q1 2025 compared to $3.3 million in the comparable quarter.
Successful Strategic Transactions
Announced purchase of 30 additional LEAP engines and a new ConstantThrust deal with Air India Express, as well as a joint venture to build an engine test facility.
Negative Updates
Increased G&A Expenses
G&A expenses were $47.7 million in Q1 2025, up from $29.6 million in the comparable period in 2024, mainly related to consultant-related fees for sustainable aviation fuel project and share-based compensation.
Higher Finance Costs
Net finance costs were $32.1 million in Q1 2025, up from $23.0 million in the comparable period in 2024, due to increased indebtedness and higher average cost of debt.
Reduced Gain on Sale of Leased Equipment
Gain on sale of leased equipment was $4.8 million in Q1 2025, down from $9.2 million in the comparable period.
Company Guidance
During the first quarter of 2025, Willis Lease Finance Corporation (WLFC) reported strong financial performance with total revenue reaching $157.7 million, a 33% increase from the previous year, and pre-tax income of $25.2 million. The average utilization rate for the quarter was 79.9%, ending at 86.4%. The company paid its fourth consecutive quarterly dividend of $0.25 per share. WLFC also highlighted the purchase of 30 LEAP engines, a new ConstantThrust deal with Air India Express, and the development of an engine test facility in Florida. The company's portfolio size increased to $2.82 billion, with core lease rent revenue at $67.7 million and maintenance reserve revenues at $54.9 million. Additionally, spare parts and equipment sales rose significantly, up 455% to $18.2 million. Despite macroeconomic concerns, WLFC remains confident in its business model and continues to lead in value creation.

Willis Lease Finance Financial Statement Overview

Summary
Willis Lease Finance exhibits strong revenue and profitability growth, supported by efficient operations. However, high leverage and negative free cash flow indicate financial risks, particularly in liquidity and investment management.
Income Statement
85
Very Positive
Willis Lease Finance shows strong revenue growth and profitability improvements. The TTM (Trailing-Twelve-Months) revenue increased by 4.26% from the previous period, with a high gross profit margin of 73.94% and an impressive net profit margin of 17.63%. The EBIT and EBITDA margins are also solid at 28.67% and 60.45% respectively, indicating efficient operations and cost management.
Balance Sheet
70
Positive
The balance sheet reflects a high debt-to-equity ratio of 3.95, highlighting significant reliance on debt. However, the company maintains a healthy equity ratio of 17.27% and a strong ROE of 18.50%, suggesting effective use of shareholder funds despite the leverage.
Cash Flow
60
Neutral
Cash flow analysis shows challenges with negative free cash flow, largely impacted by high capital expenditures. The operating cash flow to net income ratio is robust at 2.54, reflecting strong cash generation relative to reported earnings. Yet, the negative free cash flow to net income ratio indicates potential liquidity and investment challenges.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
593.44M569.22M407.97M311.93M274.20M288.69M
Gross Profit
438.75M429.44M301.84M202.83M168.77M177.39M
EBIT
170.12M144.40M136.83M7.57M-5.66M11.05M
EBITDA
358.85M345.63M236.85M164.80M167.63M176.90M
Net Income Common Stockholders
104.61M108.61M43.78M5.44M3.35M9.75M
Balance SheetCash, Cash Equivalents and Short-Term Investments
168.03M9.11M7.07M12.15M14.33M42.54M
Total Assets
2.75B3.30B2.65B2.58B2.46B2.36B
Total Debt
1.81B2.26B1.80B1.85B1.79B1.69B
Net Debt
1.64B2.26B1.80B1.84B1.78B1.65B
Total Liabilities
2.26B2.75B2.16B2.17B2.09B2.00B
Stockholders Equity
488.93M549.34M488.93M404.69M375.88M364.01M
Cash FlowFree Cash Flow
-551.38M-546.07M60.96M-148.60M-117.29M-318.78M
Operating Cash Flow
265.59M284.41M229.74M144.42M90.66M93.44M
Investing Cash Flow
-687.46M-764.91M-92.78M-194.38M-148.00M-506.67M
Financing Cash Flow
476.71M444.98M-57.94M43.33M74.05M428.48M

Willis Lease Finance Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price144.50
Price Trends
50DMA
141.75
Positive
100DMA
164.89
Negative
200DMA
169.28
Negative
Market Momentum
MACD
-0.90
Negative
RSI
55.47
Neutral
STOCH
87.24
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WLFC, the sentiment is Neutral. The current price of 144.5 is above the 20-day moving average (MA) of 137.79, above the 50-day MA of 141.75, and below the 200-day MA of 169.28, indicating a neutral trend. The MACD of -0.90 indicates Negative momentum. The RSI at 55.47 is Neutral, neither overbought nor oversold. The STOCH value of 87.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WLFC.

Willis Lease Finance Risk Analysis

Willis Lease Finance disclosed 38 risk factors in its most recent earnings report. Willis Lease Finance reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Willis Lease Finance Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
PRPRG
75
Outperform
$1.17B5.9533.88%1.72%4.62%101.14%
JBJBI
71
Outperform
$1.15B24.309.51%-13.95%-63.37%
69
Neutral
$1.00B9.9718.32%0.69%32.55%70.32%
68
Neutral
$848.04M10.1217.74%2.59%-3.95%-14.56%
66
Neutral
$1.06B-3.76%-0.61%-248.58%
66
Neutral
$4.50B12.295.40%248.66%4.13%-12.33%
43
Neutral
$1.62B-148.98%-2.94%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WLFC
Willis Lease Finance
144.50
82.43
132.80%
PRG
PROG Holdings
29.55
-5.72
-16.22%
APOG
Apogee
39.86
-20.91
-34.41%
CTOS
Custom Truck One Source
4.64
-0.05
-1.07%
JBI
Janus International Group
8.49
-4.79
-36.07%
EVEX
Eve Holding
5.65
1.25
28.41%

Willis Lease Finance Corporate Events

Executive/Board ChangesShareholder Meetings
Willis Lease Finance Elects Directors at Annual Meeting
Neutral
Jun 6, 2025

On June 5, 2025, Willis Lease Finance Corporation held its Annual Meeting of Stockholders, where 90% of the outstanding common shares were represented. During the meeting, two Class III Directors, Brendan Curran and Charles F. Willis, IV, were elected for a three-year term, and the appointment of Grant Thornton LLP as the independent auditors for 2025 was ratified.

Private Placements and Financing
Willis Lease Finance Enters $596M Note Agreement
Neutral
Jun 6, 2025

On June 5, 2025, Willis Lease Finance Corporation and its subsidiary, Willis Engine Structured Trust VIII, entered into a note purchase agreement to issue and sell $596 million in fixed rate notes, secured by a portfolio of aircraft engines and airframes. The transaction, set to close on June 18, 2025, aims to strengthen the company’s financial position, although the notes will not be registered under the Securities Act and are offered only to qualified institutional buyers.

Private Placements and Financing
Willis Lease Finance Announces $596M Fixed Rate Notes Offering
Neutral
Jun 3, 2025

On June 3, 2025, Willis Lease Finance Corporation announced the offering of $596 million in fixed rate notes through its subsidiary, Willis Engine Structured Trust VIII. The proceeds from this offering will be used to cover fees, secure reserves, and finance the acquisition of aircraft engines and airframes, while also aiding in debt repayment and general corporate purposes.

Executive/Board Changes
Willis Lease Finance Appoints New General Counsel
Neutral
May 16, 2025

On May 14, 2025, Dean Poulakidas resigned as General Counsel and Corporate Secretary of Willis Lease Finance Corporation, receiving a compensation package totaling approximately $6.8 million, which includes accelerated stock vesting. His successor, Clifton Dameron, was appointed on the same day, bringing extensive experience in aviation and corporate law, having previously served as Chief Legal Officer at Carlyle Aviation Partners. Dameron’s appointment is expected to strengthen WLFC’s legal functions and support its market opportunities.

M&A TransactionsBusiness Operations and Strategy
Willis Lease Finance Sells UK Aviation Consultancy
Positive
May 8, 2025

On May 7, 2025, Willis Asset Management Limited, a subsidiary of Willis Lease Finance Corporation, entered into a Share Purchase Agreement to sell Bridgend Asset Management Limited, its UK-based aviation consultancy business, to Willis Mitsui & Co Engine Support Limited for $45 million. This strategic move aims to enhance the joint venture’s capabilities in aviation services and expand its service offerings and asset portfolio, reflecting WLFC’s commitment to strengthening collaboration with Mitsui & Co., Ltd. The transaction is expected to unlock fresh capital for WLFC, which can be reinvested to accelerate its portfolio growth, and further solidify the long-term relationship between WLFC and Mitsui.

Financial Disclosures
Willis Lease Finance to Announce Q1 2025 Results
Neutral
Apr 22, 2025

On April 22, 2025, Willis Lease Finance Corporation announced it will release its first quarter 2025 financial results on May 6, 2025, followed by a conference call to discuss these results. This announcement is part of the company’s ongoing efforts to keep stakeholders informed about its financial performance and operational strategies, potentially impacting its market positioning and stakeholder confidence.

Executive/Board Changes
Willis Lease Finance Amends CEO Compensation Agreement
Neutral
Apr 4, 2025

On March 31, 2025, Willis Lease Finance Corporation’s Compensation Committee approved an amendment to the employment agreement with Charles F. Willis IV, canceling a non-qualified stock option for 231,000 shares and altering the vesting schedule for a restricted stock award. This amendment impacts Mr. Willis’s compensation structure, aligning it with the company’s 2023 Incentive Stock Plan, and affects the vesting conditions based on his continued service or termination circumstances.

Executive/Board Changes
Willis Lease Finance Renews Executive Chairman’s Contract
Neutral
Mar 19, 2025

On March 13, 2025, Willis Lease Finance Corporation’s Board of Directors approved a renewed and amended employment agreement for Charles F. Willis IV, who will continue as Executive Chairman. The agreement includes a five-year term with automatic renewals, an initial annual base salary of $1,269,000, and a target annual bonus of 150% of the base salary. Additionally, the agreement introduces a new trigger for change in control and includes a grant of restricted stock and stock options for Mr. Willis, which are subject to vesting conditions and are part of the company’s incentive plan.

DividendsBusiness Operations and StrategyFinancial Disclosures
Willis Lease Finance Achieves Record Financial Results for 2024
Positive
Mar 10, 2025

Willis Lease Finance Corporation reported record financial results for 2024, with total revenues reaching $569.2 million and pre-tax income at $152.6 million. The company experienced significant growth in core lease rent and maintenance reserve revenues, driven by a robust aviation market, and successfully reinvested earnings into high-demand engines and aircraft. The book value of lease assets increased significantly, and the company expanded its credit facility to support further growth. These achievements reflect the company’s strong market position and operational efficiency, benefiting stakeholders through increased dividends and asset value.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.