Aircraft engine leasing pure-play riding a structural supercycle (OEM delivery delays + PW1100 GTF/CFM56 aftermarket demand). Q2 2026 delivered $120.7M Adj EBITDA (62% margin), 20% operating income growth, $380M net debt reduction in 6M. But: heavy insider selling (>$30M in 24M from Chairman + President), 2.78x leverage, cyclical exposure, and current price already discounts most of the operational beat. Fair value approximates current price — asymmetry has largely closed.
Primary EV/EBITDA on FY26E Adj EBITDA $460M (H1 2026 annualized run-rate ~$482M, normalized down for gain-on-sale variability). Multiple 8.0x = AER 7.0x + AL 7.5x + GATX 11.0x median 7.5x, +0.5x premium for engine mix. Implied multiple check: 7.5x (within ±10% of nominal). Cross-check via P/E: post-split FY26E EPS ~$3.20 × 18x = $57.6 (matches base case within 3%). Sensitivity is very high on the multiple due to 2.78x debt/equity leverage. ⚠️ Not investment advice.
| Component | Assumption | USD/share |
|---|---|---|
| Enterprise value (core leasing) | FY26E Adj EBITDA $460M × 8.0x = $3,680M EV | +177.78 |
| Less: net debt | Total debt $2,320.9M − cash ~$50M = $2,270.9M net debt / 20.7M shares | −109.71 |
| Preferred stock outstanding | ~$50M preferred at par value / 20.7M shares | −2.42 |
| Deleveraging optionality | 25% prob × $250M additional debt paydown FY27E / 20.7M shares | +3.02 |
| Insider-selling overhang haircut | Discount −18% on equity value to reflect Chairman + President continued 10b5-1 selling programs | −12.31 |
| FV base case | Sum: 177.78 − 109.71 − 2.42 + 3.02 − 12.31 = 56.36 → rounded to $58 | ≈ $58 |
Insider trading (mandatory disclosure): Chairman Charles F. Willis IV sold $12.48M in 24M window (incl. $879,874 on 2026-08-27); President Brian Hole $8.4M; CFO Scott Flaherty $3.52M; Austin Willis $3.34M; total >$30M from top insiders. Interpretation: material negative signal at the peak of the operational narrative — the informed sellers are the ones who know if this earnings run is repeatable or a cycle peak.
| Item | FY2023 | FY2024 | FY2025 | FY2026E | Guidance 2027 |
|---|---|---|---|---|---|
| Revenue ($M) | 323 | 498 | 662 | ~780 | ~860 |
| Adj EBITDA ($M) | 180 | 282 | 375 | ~460 | ~490 |
| EBITDA margin % | 55.7% | 56.6% | 56.6% | ~59% | ~57% |
| Net income to common ($M) | 17 | 62 | 81 | ~110 | ~120 |
| Diluted EPS post-split ($) | 0.85 | 3.05 | 3.95 | ~3.20 | ~3.60 |
| Total debt ($M) | 1,890 | 2,320 | 2,700 | ~2,050 | ~1,850 |
| Metric | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 |
|---|---|---|---|---|---|
| Revenue ($M) | 144.9 | 159.7 | 176.4 | 170.5 | 194.0 |
| Adj EBITDA margin % | 55% | 58% | 59% | 60% | 62% |
| Net income to common ($M) | 18.3 | 22.1 | 24.8 | 21.4 | 28.7 |
| End-of-period cash ($M) | 65 | 72 | 58 | 62 | 51 |
Business model — Aircraft engine leasing pure-play
Lease Rent Revenue ~$305M FY26E (39% rev) 🟢 ramping Core recurring cash flow. Lease rates on CFM56/V2500 at peak-cycle level driven by GTF grounding and OEM delivery delays. GM target >70% at asset level. Gain on Sale of Leased Equipment ~$120M FY26E (15% rev) 🟢 lumpy but growing Sale of appreciated engines to airlines or Willis-managed funds. Highly cyclical/lumpy — Q2 alone $32M. Cycle-peak monetization; hard to sustain if used-engine values decline. Maintenance Services / Storage / Repair (Willis Engine Repair Center) ~$260M FY26E (33% rev) 🟢 +37.7% YTD MRO shop economics: labor + parts. Fast-growing (37.7% YoY H1). Strategic diversifier away from pure leasing cycle. Lower margin than leasing (~25% GM) but recurring. Spare Parts & Materials ~$85M FY26E (11% rev) 🟡 stable Teardown & parts trading. Modest growth, feeds MRO ecosystem. Lower margin. Structural benefit from CFM56 fleet longevity. Interest & Other ~$10M FY26E (1% rev) 🟡 stable Cash yield + fund management fees. Minor line item; captures asset management income from Willis-managed engine investment funds. Assets Under Management $4.4B Q2 2026 🟢 +9% H1 Total portfolio, including balance sheet + managed funds. Growing via engine purchases and third-party funds. Key operating leverage metric.
Legal, regulatory and risk analysis
SWOT analysis
- +Only publicly listed pure-play independent engine lessor — scarcity value
- +Q2 2026 62% Adj EBITDA margin, best-in-class specialty finance profitability
- +$4.4B AUM growing at ~9% H1; MRO center diversifying revenue mix
- +Aggressive deleveraging: $380M debt reduction in H1 2026
- +3-for-1 stock split executed July 2026 — signals confidence + broadens liquidity
- −Heavy insider selling >$30M in 24M window from Chairman + President
- −Leverage 2.78x debt/equity; ~$2.3B interest-bearing debt
- −Gain-on-sale line is inherently lumpy (Q2 alone $32M); complicates trend-line analysis
- −Small analyst coverage (largely 1-2 sell-side firms); wide target dispersion
- →Engine supercycle: PW1100 GTF issue + OEM delays = 2-3 more years of tight supply
- →Willis Engine Repair Center MRO scaling (+37.7% YTD); recurring, less cyclical
- →Third-party engine investment fund management adds fee revenue with modest capital
- →Continued deleveraging → multiple re-rating potential
- !OEM catch-up on Boeing/Airbus deliveries removes engine scarcity by 2027-28
- !Higher-for-longer rates keep interest expense elevated on $2.3B debt
- !Airline downcycle → non-payment risk + falling residual engine values
- !GTF fleet fix from Pratt reduces spare-engine demand suddenly (binary event)
Summary by assessment area
- Q2 2026 blowout: revenue +34% YoY, Adj EBITDA margin 62%
- MRO ramp diversifies revenue mix beyond cyclical leasing
- AUM up to $4.4B, growing steadily
- Leverage 2.78x still elevated but declining fast
- Interest expense significant, sensitive to Fed path
- Preferred stock outstanding adds fixed-cost drag
- >$30M insider selling at operational peak = red flag
- Chairman selling again Aug 27, 2026 ($880K)
- Cycle-peak fair value; asymmetry has largely closed at $55
Sources: WLFC Q2 2026 earnings release (GlobeNewswire, Aug 4, 2026), 10-Q June 30 2026, Q2 2026 earnings call transcript (Motley Fool, Aug 11, 2026), Trading View Q2 2026 highlights, Daily Political insider selling (Aug 27, 2026), Benzinga analyst ratings, Public.com WLFC forecast, Stock Titan filings, Yahoo Finance historical prices, StockAnalysis.com balance sheet, Trefis peer data. Market data — last verified close 2026-08-28: WLFC ~$55.11, market cap ~$1.15B, 52W range $38.00–$81.54, shares outstanding ~20.7M (post 3-for-1 split executed 2026-07-17). Short interest ~6.5% (moderate). Preferred stock outstanding. ⚠️ This document is for informational purposes only and does not constitute financial or investment advice.