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3 Reasons FTAI Has Explosive Upside Potential

FTAI Cover Image

FTAI Aviation currently trades at $130.25 per share and has shown little upside over the past six months, posting a middling return of 0.7%.

Does this present a buying opportunity for FTAI? Or is its underperformance reflective of its story and business quality? Find out in our full research report, it’s free.

Why Are We Positive On FTAI?

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

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, FTAI Aviation’s 27.1% annualized revenue growth over the last five years was incredible. Its growth surpassed the average industrials company and shows its offerings resonate with customers. FTAI Aviation Quarterly Revenue

2. EPS Surges Higher Over the Last Two Years

Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.

FTAI Aviation’s EPS grew at an astounding 73.8% compounded annual growth rate over the last two years, higher than its 44.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

FTAI Aviation Trailing 12-Month EPS (Non-GAAP)

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 79.1%, and continued increases could help it achieve long-term cash profitability.

FTAI Aviation Trailing 12-Month Free Cash Flow Margin

Final Judgment

These are just a few reasons why we think FTAI Aviation is a great business, but at $130.25 per share (or 22.6× forward P/E), is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

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