Willis Lease Finance (WLFC) has attracted fresh attention after its recent share price pullback, with the stock down 7.2% over the past month and 5.7% over the past 3 months
Short term momentum for Willis Lease Finance has cooled, with the share price down 13.3% over the past week, 7.2% over the past month, and 5.7% over the past quarter, even as the year to date share price return of 42.9% and very large multi year total shareholder returns point to a much stronger longer term story that investors are reassessing against current risks
If this kind of pullback has you looking around the market, it could be a good moment to widen your search and check out 18 top founder-led companies
After the recent pullback, Willis Lease Finance still trades about 18% below the consensus analyst price target, while its own intrinsic value estimate points to only a small premium. Is the market being cautious or simply mispricing the stock?
Advertisement
Preferred P/E Multiple of 11.6x: Is It Justified?
With Willis Lease Finance last closing at $191.65 and trading below the US market average P/E, the current 11.6x earnings multiple suggests the stock is priced more conservatively than many peers
The P/E ratio compares the share price to earnings per share and gives a quick read on how much investors are paying for current profitability. For a leasing and atrength and consistency are central to how investors frame that multiple
On one side, earnings growth of 16.4% over the past year and very large 5 year earnings growth, alongside high quality earnings, point to a business that has been increasing profitability. On the other side, return on equity of 16.1% is classified as low and interest payments are not well covered by earnings, which can help explain why the market is not assigning a richer multiple despite this track record
Compared with the broader US market P/E of 19.2x and the US Trade Distributors industry average of 24.6x, Willis Lease Finance’s 11.6x stands at a clear discount. It is also below the peer group average of 56.1x highlighted in the data
See what the numbers say about this price — find out in our valuation breakdown
Result: Price-to-earnings of 11.6x (ABOUT RIGHT)
However, Willis Lease Finance still carries risks around interest coverage and its concentrated focus on leasing and spare parts, which could pressure earnings if financing or demand conditions shift
Find out about the key risks to this Willis Lease Finance narrative
Another View on Willis Lease Finance Using Our DCF Model
While the 11.6x P/E makes Willis Lease Finance look inexpensive against the US market and its industry, the SWS DCF model tells a very different story. At a last close of $191.65 versus an estimated future cash flow value of $29.51, the stock screens as heavily overvalued on this measure, which raises questions about how much optimism is already in the price
For investors weighing these conflicting signals, it comes down to which you trust more: today’s reported earnings or long term cash flow assumptions, and how comfortable you are if they continue to disagree.Look into how the SWS DCF model arrives at its fair value
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Willis Lease Finance for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 47 high quality undervalued stocks. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity
Next Steps
With sentiment on Willis Lease Finance mixed, take a moment to review the full picture for yourself and move quickly to form your own stance using 2 key rewards and 1 important warning sign
Looking for more investment ideas beyond Willis Lease Finance?
If Willis Lease Finance has you reassessing your watchlist, do not stop here. Use this moment to scan new opportunities before others move first
- Target dependable compounding potential by reviewing companies in the 8 dividend fortresses that aim to pair income with staying power.
- Spot quality at a discount by running through the 47 high quality undervalued stocks that focus on strong fundamentals at appealing prices.
- Prioritise peace of mind by checking stocks in the 82 resilient stocks with low risk scores that score well on resilience and financial stability.
This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
Valuation is complex, but we’re here to simplify it
Discover if Willis Lease Finance might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition
Access Free Analysis
Have feedback on this article? Concerned about the content? Get in touch with us directly.Alternatively, email editorial-team@simplywallst.com
About NasdaqGM:WLFC
Willis Lease Finance
Operates as a lessor and servicer of commercial aircraft and aircraft engines worldwide
See The Free Research Report
Acceptable track record and slightly overvalued
See The Free Research Report
Similar Companies
NYSE:AER
AerCap Holdings
NYSE:DAL
Delta Air Lines
Market Insights
A brand’s strength doesn’t always lastRichard Bowman
What makes a lasting brand?Andrew Legget
Q-Day: The risk the market forgot to repriceRichard Bowman
Advertisement
Weekly Picks
DA
davidlsanderon Nevgold·11 days ago
The U.S. Government Is Desperate for This Metal. This Tiny Miner Has It — Its Closest Peer Is Already Worth Double
Fair Value:US$2.1946.6% undervalued
38followersusers have followed this narrative
·0commentsusers have commented on this narrative
·4likesusers have liked this narrative
BE
benjamin_lvieqon PayPal Holdings·4 days ago
PayPal: PayPal Doesn’t Need to Grow – It Needs to Stop Falling – A Mispriced Cash Machine With a Cannibal Buyback
Fair Value:US$6513.0% undervalued
62followersusers have followed this narrative
·2commentsusers have commented on this narrative
·9likesusers have liked this narrative
JD
JD009on Celsius Holdings·5 months ago
From $5M to $2B: Why the 2024 Crash Was the Best Buying Opportunity in Consumer Stocks
Fair Value:US$55.4347.7% undervalued
22followersusers have followed this narrative
·1commentusers have commented on this narrative
·8likesusers have liked this narrative
WA
Wavefareron Accenture·8 days ago
High-quality global services company facing an AI-driven valuation reset
Fair Value:US$30152.3% undervalued
17followersusers have followed this narrative
·1commentusers have commented on this narrative
·6likesusers have liked this narrative
RecentlyUpdated Narratives
RO
Robboon Microsoft·about 4 hours ago
Is Microsoft on sale? and Its Case in the AI Race
Fair Value:US$4042.5% undervalued
3followersusers have followed this narrative
·0commentsusers have commented on this narrative
·0likesusers have liked this narrative
AN
AnimalDoctorKwonon Ultragenyx Pharmaceutical·about 12 hours ago
burns cash despite four approved drugs, trapped by structural inefficiencies and gene-therapy scaling hurdles that thin safety margins
Fair Value:US$2612.6% overvalued
1followerusers have followed this narrative
·0commentsusers have commented on this narrative
·0likesusers have liked this narrative
AN
AnimalDoctorKwonon BridgeBio Pharma·about 12 hours ago
Faces a brutal commercial dogfight against Pfizer’s entrenched monopoly and Alnylam’s silencers, compressing its safety margins
Fair Value:US$25225.5% overvalued
1followerusers have followed this narrative
·0commentsusers have commented on this narrative
·0likesusers have liked this narrative
Popular Narratives
IN
Investingwillyon Mastercard·about 1 month ago
Mastercard: The Best Dividend Stock You’re Ignoring
Fair Value:US$75027.5% undervalued
96followersusers have followed this narrative
·1commentusers have commented on this narrative
·9likesusers have liked this narrative
BL
BlackGoaton Cerebras Systems·27 days ago
The Wafer Giant Threatening NVIDIA’s GPU Hegemony
Fair Value:US$415.5458.4% undervalued
64followersusers have followed this narrative
·3commentsusers have commented on this narrative
·11likesusers have liked this narrative
BEbenjamin_lvieqon PayPal Holdings·4 days ago
PayPal: PayPal Doesn’t Need to Grow – It Needs to Stop Falling – A Mispriced Cash Machine With a Cannibal Buyback
Fair Value:US$6513.0% undervalued
62followersusers have followed this narrative
·2commentsusers have commented on this narrative
·9likesusers have liked this narrative
