WLFC · Willis Lease Finance
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $58.43
Note written ·
Price against the kill line
21.2% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $58.43, on record since 11 November 2026. The shares are down 21.2% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $58.43, over the August trading highs, which would show the shares leading the S&P 500 again. A business result pointing the same way would be fourth-quarter utilization back above the 85% reported for the second quarter of 2026.
Research onlyNot in the portfolio.
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 3 November 2026
- Revenue, latest quarter ($M)
- 246
- Revenue, change on a year (%)
- +34.3
- Operating margin (%)
- 4.7
- Net cash, cash less debt ($M)
- −2,514
All filed numbers
What Willis Lease Finance reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 246 | +34.3 | 4.7 |
| first filed | 194 | −0.8 | 17.5 |
| first filed | 194 | +23.2 | 17.4 |
| first filed | 183 | +25.4 | 20.7 |
| first filed | 196 | +29.4 | 14.5 |
| Pre-tax income ($M) | 18.8 |
| Net income ($M) | 11.7 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +4.0 |
| Operating cash flow ($M) | Not available |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 11.1 |
| Debt ($M) long-term debt | 2,525 |
| Net cash, cash less debt ($M) | −2,514 |
| Deferred revenue ($M) −17.6% on a year | 30.0 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | Not reported |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 730 |
| Market value ($M) | 974 |
| Enterprise value, market value plus net debt ($M) | 3,488 |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not available |
| Price to book value (×) | 1.3 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 8.2% of shares outstanding sold short, 5.8 days of average trading to cover, −0.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $9.1M |
| 12 monthsfrom | $0and 1 trade without a stated price | $21.5M |
The thesis
Willis Lease Finance Corporation (WLFC), which leases aircraft engines, is more likely to lag the S&P 500 over the next three months. Its third-quarter report on 3 November 2026 showed record lease rent but falling utilization and sharply lower profit, and the fourth-quarter report decides whether utilization stops falling.
Lease rent reached a record $84.4 million, up 10.2% from a year earlier, and the lease-rate factor (monthly rent as a share of equipment cost) rose to 1.06% from 1.03% (Earnings Whispers via Finviz, 3 November 2026). Utilization fell to 83.2% from 85% in the second quarter and 86% a year earlier. Pretax income fell 56.5% to $18.8 million. Net income to common shareholders fell 55.3% to $10.2 million.
The shares closed at $46.35 on 12 November 2026. That is 43.2% below the 52-week intraday high of $81.54 set on 6 July 2026 and 18.6% lower than three months earlier. The market has already priced in the profit decline; what it has not yet seen is a quarter in which utilization stops falling.
Bullish and bearish views on Willis Lease Finance Corporation
The bull case on Willis Lease Finance Corporation (WLFC), in brief: Lease rent keeps setting records. The bear case: utilization is falling.
Bull case
- Lease rent keeps setting records. Third-quarter lease rent was $84.4 million, up from $77.1 million in the second quarter (Earnings Whispers via Finviz, 3 November 2026; company second-quarter call, 4 August 2026). A third-party summary of the 3 November 2026 call said lease extensions ran 10% to 15% above prior quarters.
- Pricing is holding. The lease-rate factor rose to 1.06% from 1.03% a year earlier (Earnings Whispers via Finviz, 3 November 2026).
- Capital return was increased. On 30 October 2026 Willis raised its quarterly dividend to $0.15 from $0.133 per share and raised its share repurchase program to up to $200 million (company press release).
- Revenue far exceeded estimates. Total revenue was a record $246.3 million, up 34.3%, against a $163.87 million estimate (Earnings Whispers via Finviz, 3 November 2026).
- The shares recovered from October's low. The closing low was $36.96 on 20 October 2026, and the close on 12 November 2026 was $46.35, 25.4% higher by those two closes.
Bear case
- Utilization is falling. It was 83.2% in the third quarter, down from 85% in the second and 86% a year earlier (Earnings Whispers via Finviz, 3 November 2026). Short-term maintenance revenue, which management uses as a proxy for flight hours, fell for a third straight quarter to $36.8 million (third-party report on the 3 November 2026 call).
- Profit quality is weak. About $89.1 million of revenue came from equipment sales, mostly aircraft passed through to a joint venture, against $91.1 million of associated cost (Earnings Whispers via Finviz, 3 November 2026). Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $100.9 million, down from $135.0 million a year earlier.
- Earnings missed. Third-quarter earnings were $0.47 per share against a $0.60 consensus (Earnings Whispers, 3 November 2026). Another data provider showed a $1.21 estimate (company news, 3 November 2026).
- Leverage rose. The company reported 2.88 times at 30 September 2026 on its measure of debt net of cash to equity including preferred stock, against 2.78 times at 30 June 2026 (third-party summary of the 3 November 2026 report).
- Insiders sold into the summer highs. SEC Form 4 filings show Executive Chairman Charles Willis IV sold 78,200 shares at an average $57.27 on 17 August to 19 August 2026. CEO Austin Willis sold 15,000 shares at $53.90 on 1 September 2026. CFO Scott Flaherty sold 30,000 shares at an average $54.45 on 11 September to 15 September 2026. The only Form 4 since then, filed 2 October 2026, reports 1,420 shares withheld for tax.
Price setup
The shares closed at $46.35 on 12 November 2026, against $45.71 on 10 November 2026 and $46.92 on 5 November 2026. They have moved in a narrow range since the report.
On adjusted closes, the 50-day average is $46.74, so the shares sit just below it. The 200-day average is $59.55, about 28% above the last close. That gap shows how far the shares fell from the summer, and the average has not turned up.
The 52-week closing low is $36.96, set on 20 October 2026. The 52-week intraday high is $81.54 from 6 July 2026. Insiders own about 53% of the shares (MarketBeat, 2 October 2026), so free float and trading volume are limited. The next scheduled company event, the fourth-quarter report, is outside the next 30 days.
Catalysts ahead
- ~March 2027 (est.): Fourth-quarter and full-year 2026 results; the company has not announced a date. Shows whether utilization stabilizes above 83.2% and lease rent holds above the $84.4 million third-quarter record.
What would change the view
A daily close above $58.43, over the August trading highs, which would show the shares leading the S&P 500 again. A business result pointing the same way would be fourth-quarter utilization back above the 85% reported for the second quarter of 2026.
What it trades with
WLFC trades with commercial aviation demand, engine availability and airline fuel costs. Higher fuel prices push airlines to park older aircraft, which lowers short-term engine leasing (third-party report on the 3 November 2026 call).
The $200 million of 2.50% convertible senior notes due 2031 carry a conversion price near $89.60 after the split, well above the current price.
The evidence, claim by claim (8)
- Third-quarter lease rent was a record $84.4 million, up 10.2% from a year earlier; lease-rate factor 1.06% versus 1.03%. Earnings Whispers via Finviz, Willis Lease third-quarter 2026 report · as of
- Portfolio utilization was 83.2%, down from 85% in the second quarter of 2026 and 86% a year earlier. Earnings Whispers via Finviz, Willis Lease third-quarter 2026 report · as of
- Total revenue was a record $246.3 million, up 34.3%; about $89.1 million came from equipment sales with $91.1 million of associated cost. Earnings Whispers via Finviz, Willis Lease third-quarter 2026 report · as of
- Pretax income fell 56.5% to $18.8 million; net income to common shareholders fell 55.3% to $10.2 million; adjusted EBITDA was $100.9 million versus $135.0 million a year earlier. Earnings Whispers via Finviz, Willis Lease third-quarter 2026 report · as of
- Third-quarter earnings were $0.47 per share against a $0.60 consensus. Earnings Whispers · as of
- Quarterly dividend raised to $0.15 from $0.133 per share; share repurchase program increased to up to $200 million. Willis Lease Finance press release · as of
- CFO Scott Flaherty sold 30,000 shares at an average $54.45 on 11 September to 15 September 2026. SEC Form 4 filed 15 September 2026 · as of
- Executive Chairman Charles Willis IV sold 78,200 shares at an average $57.27 on 17 August to 19 August 2026. SEC Form 4 filed 19 August 2026 · as of
Sources