FTAI Aviation Ltd. (FTAI): A Bull Case Theory
Engineers examining stress tests of an aircraft engine, working to make sure its ready for flight.
FTAI Aviation (FTAI) began as an aircraft and engine leasing business, but it is now undergoing a strategic transformation into a high-margin, capital-efficient maintenance, repair, and overhaul (MRO) company. Its MRO operations primarily focus on CFM56 and V2500 engines, which power a significant portion of Boeing and Airbus narrow-body aircraft and are expected to remain in wide use for decades. Despite only holding approximately 5% share of the fragmented MRO market for these engine types, FTAI is growing rapidly and has a long runway for further expansion. What sets FTAI apart is its unique approach to engine servicing — rather than performing full overhauls, the company repairs or swaps out individual engine modules using a proprietary inventory. This significantly reduces customer downtime and repair costs, enabling FTAI to achieve superior margins compared to traditional MRO providers.
The company's legacy leasing business plays a synergistic role in fueling the growth of its MRO segment by supplying used modules and generating consistent demand for swaps, effectively accelerating the MRO flywheel. Earlier this year, the company faced pressure following the release of short-seller reports, which triggered a stock price decline. However, at the same time, FTAI announced a transformative multi-billion-dollar capital transaction, shifting a significant portion of its leasing assets into a new partnership structure. This move not only reduced capital intensity but also unlocked further growth opportunities for the leasing side while freeing FTAI to focus more aggressively on its higher-return MRO operations. The combination of the stock pullback and this capital realignment created a compelling entry point for investors.
FTAI now trades at roughly 10x next-twelve-month EV/EBITDA, an attractive multiple given its strong growth outlook. Even without any multiple expansion, organic growth toward a 10–12% MRO market share, bolstered by its capital-light leasing structure, points to a high-teens IRR potential. If the stock re-rates to a 20x multiple—inline with top-tier MRO peers—and as the company rolls out higher-margin PMA parts and scales its operations, the return profile becomes even more compelling. With the possibility of exceeding 10% market share and capturing significant per-unit EBITDA growth, FTAI offers a rare opportunity to earn 20%+ IRRs over the long term, making it one of the most attractively positioned aerospace aftermarket plays in the public markets today.
FTAI Aviation Ltd. (FTAI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held FTAI at the end of the fourth quarter which was 41 in the previous quarter. While we acknowledge the risk and potential of FTAI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FTAI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
a day ago
- Yahoo
2 Growth Stocks to Stash and 1 Facing Headwinds
Growth is a hallmark of all great companies, but the laws of gravity eventually take hold. Those who rode the COVID boom and ensuing tech selloff in 2022 will surely remember that the market's punishment can be swift and severe when trajectories fall. Luckily for you, our job at StockStory is to help you avoid short-term fads by pointing you toward high-quality businesses that can generate sustainable long-term growth. On that note, here are two growth stocks expanding their competitive advantages and one whose momentum may slow. One Growth Stock to Sell: MongoDB (MDB) One-Year Revenue Growth: +19.2% Named after "humongous database," reflecting its ability to handle massive data loads, MongoDB (NASDAQ:MDB) provides a flexible document-based database platform that helps developers build, deploy, and maintain modern applications more efficiently. Why Does MDB Worry Us? Rapid expansion strategy came at the expense of operating margin profitability Poor free cash flow margin of 7.6% for the last year limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends MongoDB's stock price of $217.51 implies a valuation ratio of 7.5x forward price-to-sales. Read our free research report to see why you should think twice about including MDB in your portfolio, it's free. Two Growth Stocks to Watch: Semrush (SEMR) One-Year Revenue Growth: +22.2% Born from the need to make sense of the complex digital marketing landscape, Semrush (NYSE:SEMR) is a software-as-a-service platform that helps companies improve their online visibility, analyze digital marketing efforts, and optimize content across search engines and social media. Why Are We Positive On SEMR? Winning new contracts that can potentially increase in value as its billings growth has averaged 23% over the last year Software is difficult to replicate at scale and results in a premier gross margin of 81.4% Free cash flow margin is forecasted to grow by 5.9 percentage points in the coming year, potentially giving the company more chips to play with Semrush is trading at $7.60 per share, or 2.4x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it's free. FTAI Aviation (FTAI) One-Year Revenue Growth: +55.9% 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. Why Do We Love FTAI? Market share has increased this cycle as its 41.4% annual revenue growth over the last two years was exceptional Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 67% outpaced its revenue gains Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day At $140.33 per share, FTAI Aviation trades at 25.9x forward P/E. Is now the right time to buy? Find out in our full research report, it's free. High-Quality Stocks for All Market Conditions When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that's already erased most losses. Don't let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Yahoo
Powerhouse Engines Expands Leasing Portfolio with Acquisition of (2) CFM56-5B Engines
MIAMI, Aug. 18, 2025 /PRNewswire/ -- Powerhouse Engines today announced the acquisition of two CFM56-5B engines, further expanding its inventory and strengthening its position as a trusted global provider of aviation engine solutions. The CFM56-5B, widely recognized for its reliability and efficiency, powers the Airbus A320 family and remains one of the most in-demand engines in the market. With this acquisition, Powerhouse Engines now holds both material and an increasing portfolio, enhancing its ability to offer flexible leasing, trading, and MRO solutions to airlines, lessors, and MRO providers worldwide. These newly acquired engines will be placed on operating lease with a valued customer, underscoring Powerhouse's increased engagement in the mid-gen market segment. As the aviation industry continues to navigate complex supply chain challenges, airlines and lessors are increasingly turning to leasing solutions to avoid costly and time-consuming shop visits making readily available, serviceable engines more critical than ever. "The acquisition of these CFM56-5B engines reflects our commitment to providing our customers with immediate access to high-quality assets and delivering the right solutions at the right time," said Eric Engdahl, CEO of Powerhouse Engines. "By expanding our portfolio, we are better positioned to meet market demand, offering custom leasing solutions, and MRO support to our clients in today's dynamic aviation landscape." With global engine MRO demand peaking for performance restoration shop visits, the need for spare engines is on the rise, particularly as the A320 CEO family of aircraft continues to receive operational life extensions. Industry forecasts show that mid-generation engine demand for maintenance and trading activity will remain strong well into the next decade. Aligning with demand, the acquisition underscores a bold new growth phase following a major capital investment from partners led by Inoa Capital. Powerhouse Engines' capital investment strategy ensures the continued growth of its engine leasing platform and expansion of its MRO capabilities, enabling the company to deliver tailored solutions and added value to its customers. About Powerhouse EnginesPowerhouse Engines is an integrated platform exclusively specializing in the leasing, trading and maintenance optimization of the CFM56-5B / -7B commercial engines. We combine deep market access with in-house MRO capabilities to deliver high-value asset performance and solutions across the engine lifecycle. Explore the power behind Powerhouse: Email: info@ Phone: 305-254-0034 View original content to download multimedia: SOURCE Powerhouse Engines
Yahoo
3 days ago
- Yahoo
Substack writers can now direct U.S. readers to (often cheaper) web-based subscriptions on iOS
Newsletter subscription platform Substack will begin taking advantage of an option on the U.S. App Store that allows users to make purchases outside of Apple's in-app purchasing system. This functionality is permitted by a change to the App Store's rules in May, as a result of Epic Games' antitrust lawsuit against the tech giant. Since then, a number of top apps have moved to offer in-app purchase links that point to their own websites, including Spotify, Patreon, and the Amazon Kindle app, among others. In Substack's case, support for external payments will benefit both the company, which no longer has to pay the App Store a commission on those web sales, and consumers, who will have access to reduced pricing. Meanwhile, Substack creators will be able to offer their readers the option of whether they want the convenience of Apple's in-app payments system (IAP) or the web payment option, which is now accessible without having to leave the app. Substack explains it will automatically adjust its customers' iOS app price higher to account for Apple's fees, allowing creators to take home the same amount of money as a web subscription. However, Substack writers can disable this feature if they choose. (Substack will continue to take its own 10% fee based on the web subscription price, as before.) The company said it's also offering its writers migration tools to help them move their subscribers off Apple's payments system and onto its web-based system. Currently, more than 30,000 publications on the platform have in-app purchases enabled; Substack says early tests of the expanded set of payment options have driven a boost in paid sign-ups. It did not, however, share specific numbers related to this. The public launch of the external payments option will only impact new Substack subscriptions. Substack writers don't have to take any action unless they want to lower the prices for those using Apple's payments system. Per Apple's App Store rules, fully opting out of offering IAP is not allowed. While the changes impact the Substack app in the U.S., the company says it's still evaluating if it makes sense to switch to the more complex rules Apple offers in the EU and U.K. for developers who want to forgo IAP.
