QS Research · Michael Burry's Scion Capital analyst template · 2006
FTAI Aviation Ltd. (FTAI)
As of 2026-11-11 · 12/15 boxes filled from SEC filings and market data
Report price $188.00 (close 2026-11-10)
Conclusion: PASS
Conviction low · base case -28% · downside -37% · upside +24%
The market is paying a growth multiple (37.5x GAAP P/E, 25.9x operating P/E, 20.7x EV/EBITDA, 6.51x EV/Sales) for a business whose TTM free cash flow is -$588.7M and whose earnings have swung from -$105.3M pre-tax (FY2022) to +$606.7M (FY2025), so the price already discounts the Aerospace Products ramp and the 2027 $2.3B segment Adjusted EBITDA guide. On the peer median P/E of 26.9x (7 peers), TTM net income to common of $512.7M is worth about $134.86 a share, -28.3% from $188.00, and the downside case at 22.01x, including $0.81 a share of exposure stress, takes the equity to about $119.04, -36.7%. The upside case is +24.0% to $233.12, but the dated re-rating levers (the $500M ASR completing in Q4 2026, first Power deliveries in 2027) are not yet in the numbers. This is a pass at low conviction, not a long: the base case is below today's price, the downside is worse than -25%, and reward/risk is 0.65.
Key numbers
- Share price: $188.00
- Market cap: $19.23B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $3.42B
- EV / EBITDA (TTM): 20.7x
- P/E (TTM): 37.5x
- FCF yield: -3.1%
- Price / book: 44.37x
- P/E, operating (tax-normalized) (TTM): 25.9x
- Revenue growth (latest fiscal year): +44.5%
- ROIC (TTM): 21.2%
- WACC: 10.1%
- Economic profit spread: +11.1 pts
The 15 boxes
- ✓ 1. Long-form business notes
FTAI Aviation is now an engine-maintenance and leasing platform built around CFM56-5B/-7B and V2500 engines: Aerospace Products repairs/refurbishes and sells engines and parts and uses the MRE exchange model, while Aviation Leasing owns and manages aircraft and engines and is shifting toward third-party capital through the Strategic Capital Initiative. The FY2020 10-K shows a different company, Fortress Transportation and Infrastructure Investors LLC, externally managed and diversified across aviation, energy, intermodal transport and ports and terminals, so the report history is a transition from diversified infrastructure/equipment leasing to aviation-engine servicing and asset management. Revenue grew from $297.9M in FY2020 to $2.51B in FY2025 and $3.42B TTM to Sep 30 2026, but operating cash flow was -$310.7M in FY2025 and -$512.1M TTM. The sources do not disclose segment revenue, segment margins or per-engine/per-aircraft unit economics.
- ✓ 2. Competitive advantage
The sources show scale but not a demonstrated durable advantage: revenue went from $297.9M (FY2020) to $2.51B (FY2025) and $3.42B (TTM to 2026-09-30), yet pre-tax income swung from -$105.3M (FY2022) to $606.7M (FY2025) and operating cash flow was negative in four of the six fiscal years shown, including -$512.1M TTM. The 10-K describes the markets as "highly competitive" and concedes rivals may have lower costs of capital and longer histories, with price competition sharpest in downturns. The only structural items visible are regulatory approvals (FAA/Transport Canada/EASA) and a deliberately narrow engine focus (CFM56-5B, CFM56-7B, V2500) that the company itself flags as a concentration risk. On this record the moat is unproven; the returns look leveraged and cycle-driven rather than protected.
- ✓ 3. 10-Q takeaways
Q3 2026 was a growth quarter concentrated entirely in Aerospace Products: consolidated revenue rose $310.6 million to $977.7 million and net income attributable to shareholders rose to $149.1 million from $114.0 million, while Aviation Leasing revenue fell $81.5 million as assets moved to the SCI Partnerships. Margins held to the guided 31% Aerospace Adjusted EBITDA margin, inventory ballooned to $1,932.3 million from $1,193.8 million at December 31, 2025, and management doubled the buyback to $1.0 billion with a $500.0 million accelerated share repurchase. Affiliate MRE revenue ($129.4 million in Q3 2026) and equity-method earnings from the SCI Partnerships are now material to reported results and are not the same thing as third-party operating demand.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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