What a brutal six months it’s been for FTAI Aviation. The stock has dropped 24.5% and now trades at $215.84, rattling many shareholders. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation.
Given the weaker price action, is now an opportune time to buy FTAI? Find out in our full research report, it’s free.
Why Are We Positive on FTAI Aviation?
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, FTAI Aviation’s sales grew at an incredible 56.3% compounded annual growth rate over the last five years. Its growth surpassed the average industrials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
FTAI Aviation’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.
3. Increasing Free Cash Flow Margin Juices Financials
Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, FTAI Aviation’s margin expanded over the last five years. FTAI Aviation’s free cash flow margin for the trailing 12 months was negative 29.1%, and continued increases could help it achieve long-term cash profitability.
Final Judgment
These are just a few reasons why FTAI Aviation ranks near the top of our list. With the recent decline, the stock trades at 15× forward EV-to-EBITDA (or $215.84 per share). Is now a good time to initiate a position? See for yourself in our full research report, it’s free.
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