Investment Thesis
Willis Lease demonstrates solid operational profitability (17.4% operating margin) and strong free cash flow generation ($53.1M, 27.3% FCF margin), but faces critical financial fragility with interest coverage of only 1.0x and extreme leverage of 3.25x debt-to-equity. The company has minimal cash ($24.6M) relative to $2.3B debt, leaving virtually no buffer for economic downturns or rate increases.
Strengths
- Strong free cash flow generation of $53.1M with 27.3% FCF margin shows efficient cash conversion
- Healthy operating margin of 17.4% and net margin of 12.9% demonstrate operational efficiency
- Positive net income of $25.1M and $56.7M operating cash flow in current period
Risks
- Critical: Interest coverage ratio of 1.0x leaves virtually no margin for error; any profitability decline risks debt service failure
- Extreme leverage of 3.25x debt-to-equity with only $24.6M cash creates severe vulnerability to market disruptions or rate increases
- Very poor shareholder returns (3.6% ROE, 0.7% ROA) indicate capital is not being deployed efficiently despite heavy debt burden
Key Metrics to Watch
- Interest coverage ratio trend - must improve above 1.5x minimum
- Operating cash flow stability - any decline below $50M signals distress
- Debt levels and refinancing needs - monitor ability to service and roll over $2.3B debt
Financial Metrics
Revenue
194.3M
Net Income
25.1M
EPS (Diluted)
$3.26
Free Cash Flow
53.1M
Total Assets
3.5B
Cash
24.6M
Profitability Ratios
Gross Margin
N/A
Operating Margin
17.4%
Net Margin
12.9%
ROE
3.6%
ROA
0.7%
FCF Margin
27.3%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
3.25x
Debt/Assets
78.4%
Interest Coverage
1.04x
Long-term Debt
2.3B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-07T11:01:56.160313 |
Data as of: 2026-03-31 |
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