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1. Company Snapshot

1.a. Company Description

Willis 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.

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1.b. Last Insights on WLFC

Willis Lease Finance Corporation's recent performance faced challenges due to increasing operational and interest expenses, which raised concerns about its margin profile. Despite a record quarterly revenue of $195.5 million and a 30% margin realization from gains on engine sales, persisting supply chain disruptions resulted in delayed engine parts delivery and high turnaround times. The company's recent appointment of Pascal Picano as Senior Vice President, Aircraft Leasing & Trading, may not immediately impact financials. Additionally, Willis Lease Finance Corporation's quarterly dividend of $0.25 per share may not be sufficient to offset investor concerns.

1.c. Company Highlights

2. Willis Lease Finance Corporation Delivers Strong Q3 2025 Results

Willis Lease Finance Corporation reported a robust financial performance in the third quarter of 2025, with quarterly revenue reaching $183.4 million, a 25.4% year-over-year increase. The company's leasing revenues hit a record $156 million, up 32% from the same quarter in 2024. Net income attributable to common shareholders was $22.9 million, with diluted weighted average income per share of $3.25, slightly below analyst estimates of $3.38. The company's core lease rent revenues were $76.6 million, a 17.9% increase from the prior comparable period, while maintenance reserve revenue jumped 52.8% to $76.1 million.

Publication Date: Nov -24

📋 Highlights
  • Revenue Surge: Q3 2025 revenue reached $183.4M (+25.4% YoY), driven by leasing demand and a stronger aviation market.
  • Portfolio Expansion: $136.4M spent acquiring 16 engines (12 from Air India Express) and 6 Dash 8-400 aircraft from Porter.
  • Record Leasing Revenues: $156M in leasing revenues (+32% YoY) with 86% engine utilization and a lease rental factor over 1%.
  • Financial Strength: Net income of $22.9M ($3.25 EPS) despite a 69.5% increase in gain on sale of lease equipment ($16.1M).
  • Capital Structure: Lower leverage ratio of 2.90x (vs. 3.48x in 2024) and $650M in common equity, with undervalued assets adding ~$600M in portfolio value.

Operational Highlights

The company continued to see strong demand for its leasing business, driven by a strengthening aviation market. Engine utilization averaged 86%, and the lease rental factor was over 1%, indicating a healthy demand for engines. During the quarter, Willis Lease Finance Corporation purchased 16 engines and 6 aircraft for its lease portfolio, totaling $136.4 million. The company remains optimistic about its portfolio, with around 53-54% consisting of future-generation equipment like LEAPs, GTS, and GEnx.

Capital Structure and Dividend

The company's capital structure remains robust, with a lower leverage ratio of 2.90x compared to 3.48x at year-end 2024. This flexibility is expected to enable the company to access the market opportunistically and continue to build its lease portfolio. The company declared its seventh consecutive quarterly dividend, increasing it to $0.40 per share, reflecting its commitment to returning value to shareholders.

Valuation and Growth Prospects

Analysts estimate next year's revenue growth at 0.9%. The current valuation metrics indicate a relatively attractive price, with a P/E Ratio of 6.66 and a P/B Ratio of 1.14. The Dividend Yield is around 0.96%, providing a relatively stable return for investors. With a strong operational performance and a solid capital structure, the company is well-positioned for future growth.

Management's Outlook

Austin Willis, CEO, noted that while additional supply may enter the market as aircraft production ramps up, the deficit of 5,000 aircraft between 2018 and 2030 will remain a significant factor. The company is preparing for this transition by maintaining a portfolio of in-demand assets and exploring opportunities in aircraft leasing and sustainable aviation fuel projects.

3. NewsRoom

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Willis Lease Finance: This Name Now Trades At A 34% Discount To Adjusted Book Value (Upgrade).

Nov -14

Source: seekingalpha.com

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WLFC Q3 Earnings Dip Y/Y Amid High Operating Costs, Revenues Up 25%

Nov -10

Source: zacks.com

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Willis Lease Finance: Wall Street Is Missing This Hidden Engine Powerhouse

Nov -07

Source: seekingalpha.com

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Contrasting Willis Lease Finance (WLFC) & Its Competitors

Nov -05

Source: defenseworld.net

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Willis Lease Finance Corporation (WLFC) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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Willis Lease Finance Corporation Reports Third Quarter 2025 Financial Results

Nov -04

Source: globenewswire.com

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Willis Lease Finance Corporation Announces New Revolving Credit Facility for Joint Venture, Willis Mitsui & Co. Engine Support Limited

Nov -03

Source: globenewswire.com

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Willis Lease Finance Corporation Leases an Additional 50 Acres at Teesside International Airport

Oct -21

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.68%)

6. Segments

Leasing and Related Operations

Expected Growth: 4.5%

Growing demand for aircraft leasing, increasing air travel, and rising need for customized financing solutions drive the growth of Willis Lease Finance Corporation's leasing and related operations.

Spare Parts

Expected Growth: 8.1%

Growing demand for aircraft spare parts, increasing aircraft fleet, and rising maintenance requirements drive the segment's growth. Additionally, the shift towards more efficient and cost-effective maintenance practices, and the need for airlines and MRO providers to reduce downtime and improve operational efficiency, further support the segment's growth.

Eliminations

Expected Growth: 4.5%

Consolidated financial statements drive growth through elimination of intercompany transactions, enhancing transparency and accuracy. Increased adoption in aviation financing and leasing industries fuels demand for Willis Lease Finance Corporation's services, driving a forecasted CAGR of 4.5%.

7. Detailed Products

Engine Leasing

Willis Lease Finance Corporation provides engine leasing services to airlines, allowing them to access the engines they need to operate their fleets without having to purchase them outright.

Engine Trading

Willis Lease Finance Corporation buys and sells aircraft engines, providing a marketplace for airlines and other companies to trade engines.

Engine Maintenance

Willis Lease Finance Corporation provides maintenance services for aircraft engines, including repair, overhaul, and testing.

Aircraft Leasing

Willis Lease Finance Corporation provides aircraft leasing services, allowing airlines to access the aircraft they need without having to purchase them.

Asset Management

Willis Lease Finance Corporation provides asset management services, including engine and aircraft valuation, technical analysis, and portfolio management.

8. Willis Lease Finance Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Willis Lease Finance Corporation is medium due to the presence of alternative financing options for aircraft leasing, but the company's expertise and reputation in the industry mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of aircraft leasing and the limited number of players in the market, giving Willis Lease Finance Corporation an upper hand in negotiations.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of a few large aircraft manufacturers, but Willis Lease Finance Corporation's diversified portfolio and long-term relationships with suppliers reduce this threat.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the aircraft leasing industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the aircraft leasing industry, with several established players vying for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 78.70%
Debt Cost 4.69%
Equity Weight 21.30%
Equity Cost 8.84%
WACC 5.57%
Leverage 369.43%

11. Quality Control: Willis Lease Finance Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Ennis

A-Score: 6.7/10

Value: 7.2

Growth: 4.1

Quality: 7.2

Yield: 10.0

Momentum: 2.5

Volatility: 9.0

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REV Group

A-Score: 5.8/10

Value: 4.1

Growth: 6.2

Quality: 6.3

Yield: 4.0

Momentum: 10.0

Volatility: 4.0

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H&E Equipment Services

A-Score: 5.4/10

Value: 3.3

Growth: 6.2

Quality: 5.8

Yield: 3.0

Momentum: 9.5

Volatility: 4.3

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PROG Holdings

A-Score: 4.8/10

Value: 8.3

Growth: 5.8

Quality: 6.9

Yield: 2.0

Momentum: 1.5

Volatility: 4.3

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Willis Lease Finance

A-Score: 4.6/10

Value: 7.8

Growth: 7.6

Quality: 5.0

Yield: 1.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

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FlexShopper

A-Score: 3.0/10

Value: 9.6

Growth: 3.1

Quality: 4.9

Yield: 0.0

Momentum: 0.5

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

131.03$

Current Price

131.03$

Potential

-0.00%

Expected Cash-Flows