Fortress Transportation (FTAI) AI Stock Analysis

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Fortress Transportation

(NASDAQ:FTAI)

54Neutral

FTAI Aviation's overall score reflects strong revenue growth and strategic initiatives, but profitability and financial stability challenges weigh heavily. Technical analysis indicates a weak stock momentum, and valuation metrics are concerning. The earnings call highlights growth potential but also points to high capital expenditures as a risk.

Positive Factors

Financial Performance

FTAI Aviation reported strong adjusted EBITDA well ahead of investor expectations.

Market Expansion

Market penetration could grow to 20-25% from the current 5%, potentially increasing FTAI's share in the $22 billion market.

Strategic Partnerships

FTAI has entered into a joint venture with IAG Engine Center Europe, adding significant module capacity and enhancing market presence.

Negative Factors

Business Valuation

Uncertainty about the composition of the aerospace segment makes it difficult to accurately value the business.

Regulatory Challenges

Margins are expected to be under pressure if no new PMA parts are approved this year.

Stock Valuation

The stock has been downgraded to Hold as the valuation, despite moving higher, isn't enough to justify a Buy rating.

Fortress Transportation (FTAI) vs. S&P 500 (SPY)

Market Cap

$11.17B

Dividend Yield1.21%

Average Volume (3M)1.97M

Price to Earnings (P/E)―

Beta (1Y)1.16

Revenue Growth47.59%

EPS Growth-116.02%

CountryUS

Employees580

SectorIndustrials

Sector Strength68

IndustryRental & Leasing Services

Share Statistics

EPS (TTM)-0.36

Shares Outstanding102,550,970

10 Day Avg. Volume2,229,442

30 Day Avg. Volume1,965,600

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)7.10

Price to Cash Flow (P/CF)66.30

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$185.67

Price Target Upside93.75% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

Fortress Transportation Business Overview & Revenue Model

Company DescriptionFTAI Aviation (FTAI) is a leading company in the aviation sector, focusing on the acquisition, leasing, and management of aviation-related assets. The company primarily operates in the areas of aircraft leasing, engine leasing, and component sales, serving a diverse range of clients in the aviation industry. FTAI Aviation leverages its expertise and extensive portfolio to provide comprehensive solutions that cater to the needs of airlines, maintenance providers, and other aviation-related entities.

How the Company Makes MoneyFTAI Aviation generates revenue through several key streams. The primary source of income is from leasing aircraft and engines to airlines and other operators, which provides a steady stream of rental income. Additionally, the company engages in the sale of aviation components and parts, further diversifying its revenue base. FTAI also benefits from the strategic acquisition and sale of aircraft and engines, capitalizing on market opportunities to maximize returns. Partnerships with airlines and maintenance organizations enhance its service offerings and contribute to its earnings by facilitating long-term leasing agreements and collaborative ventures.

Fortress Transportation Financial Statement Overview

Summary

FTAI Aviation shows strong revenue growth but faces challenges with profitability and financial stability. The negative net margin and the loss of equity in 2024 suggest potential risks in sustaining operations. Cash flow improvements are a positive sign, yet the persistent negative free cash flow highlights the necessity for continued focus on cash management and financial restructuring.

Income Statement

Positive

FTAI Aviation has demonstrated solid revenue growth, with a 48.2% increase from 2023 to 2024. However, the net profit margin has turned negative in 2024 at -1.9%, compared to a positive margin of 20.8% in 2023, largely due to a negative net income in 2024. Despite this, the gross profit margin improved to 52.4% in 2024, indicating effective cost management.

Balance Sheet

Neutral

The balance sheet exhibits significant challenges, with a complete erosion of stockholders' equity in 2024. This results in an undefined debt-to-equity ratio and equity ratio, highlighting potential financial instability. The absence of total liabilities and stockholders' equity data for 2024 raises concerns about the company's financial health.

Cash Flow

Neutral

FTAI Aviation's cash flow statement reflects a troubling trend, with a negative operating cash flow of -$187.96 million in 2024. The free cash flow remains negative, though there is a substantial improvement in free cash flow from -$647.91 million in 2023 to -$187.96 million in 2024, indicating some progress in cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.73B	1.17B	708.41M	455.80M	366.50M
	Gross Profit
909.02M	498.89M	307.11M	254.05M	194.10M
	EBIT
0.00	356.99M	156.96M	25.90M	43.10M
	EBITDA
497.92M	530.66M	230.71M	263.02M	245.84M
	Net Income Common Stockholders
8.68M	243.82M	-110.61M	-130.71M	-105.02M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
115.12M	90.76M	33.56M	188.08M	121.70M
	Total Assets
4.04B	2.96B	2.43B	4.86B	3.39B
	Total Debt
3.44B	2.52B	2.18B	3.29B	1.97B
	Net Debt
3.33B	2.43B	2.14B	3.11B	1.85B
	Total Liabilities
3.96B	2.79B	2.41B	3.74B	2.29B
	Stockholders Equity
81.37M	175.35M	18.88M	1.12B	1.08B
Cash Flow		Free Cash Flow
-187.96M	-647.91M	-834.31M	-789.67M	-531.67M
	Operating Cash Flow
-187.96M	128.98M	-20.66M	-22.04M	63.11M
	Investing Cash Flow
-469.50M	-373.35M	-411.25M	-1.29B	-509.12M
	Financing Cash Flow
681.81M	282.21M	44.91M	1.59B	364.92M

Fortress Transportation Technical Analysis

Technical Analysis Sentiment

Negative

Last Price95.83

Price Trends

50DMA

111.80

Negative

100DMA

124.88

Negative

200DMA

124.42

Negative

Market Momentum

MACD

-4.30

Positive

RSI

43.19

Neutral

STOCH

48.71

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTAI, the sentiment is Negative. The current price of 95.83 is below the 20-day moving average (MA) of 105.41, below the 50-day MA of 111.80, and below the 200-day MA of 124.42, indicating a bearish trend. The MACD of -4.30 indicates Positive momentum. The RSI at 43.19 is Neutral, neither overbought nor oversold. The STOCH value of 48.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FTAI.

Fortress Transportation Risk Analysis

Fortress Transportation disclosed 52 risk factors in its most recent earnings report. Fortress Transportation reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Fortress Transportation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LTM	77 Outperform	$9.21B	9.08	166.51%	0.90%	10.24%	68.75%
PAC	70 Outperform	$9.52B	19.97	42.32%	3.83%	-2.03%	-11.39%
JBHT	65 Neutral	$13.29B	23.92	14.06%	1.25%	-5.79%	-20.32%
SARO	63 Neutral	$8.38B	803.13		―	14.77%	―
Sector *	63 Neutral	$4.29B	11.05	5.73%	232.30%	4.75%	-5.69%
FTAI	54 Neutral	$11.17B	―	6.76%	1.21%	47.59%	-116.02%
AMTM	54 Neutral	$4.42B	―		―	―	―

* Industrials Sector Average

Performance Comparison

FTAI

Fortress Transportation

95.83

24.93

35.16%

PAC

Grupo Aeroportuario del Pacifico

185.08

33.54

22.13%

JBHT

JB Hunt

135.11

-46.06

-25.42%

LTM

LATAM Airlines Group SA Sponsored ADR

30.47

5.75

23.26%

AMTM

Amentum Holdings, Inc.

18.76

-9.24

-33.00%

SARO

StandardAero, Inc.

25.62

-7.35

-22.29%

Fortress Transportation Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -31.50% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong financial performance with significant growth in adjusted EBITDA and strategic initiatives like the SCI and expansion of facilities. However, high capital expenditures and some margin impacts due to legacy contracts were noted as challenges.

Highlights

Strong Financial Performance

Adjusted EBITDA of $252 million in Q4 2024, a 9% increase from Q3 2024 and a 55% increase compared to Q4 2023. Full-year 2024 adjusted EBITDA was $862.1 million, up 44% from 2023.

Dividend Announcement

FTAI Aviation announced its 39th dividend as a public company and 54th consecutive dividend since inception, with a dividend of $0.30 per share.

Strategic Capital Initiative

SCI received a $2.5 billion commitment for asset-level debt financing from ATLAS, a majority-owned subsidiary of Apollo, and Deutsche Bank. The SCI team is in late stages of closing a second round of equity financing, targeting a market opportunity of more than $4 billion annually.

Aerospace Products Segment Growth

Aerospace Products segment achieved $117.3 million of adjusted EBITDA with a 34% margin in Q4 2024, up 15% from Q3 2024 and 115% from Q4 2023. Expected growth to $600 million to $650 million of EBITDA in 2025.

Expansion of Facilities

New joint venture agreement with IAG Engine Center Europe, rebranded as QuickTurn Europe, adding new maintenance facilities in Rome to complement existing ones in Montreal and Miami.

Lowlights

High Capital Expenditures

In 2024, FTAI invested approximately $1.3 billion in major growth initiatives, which included the purchase of a Montreal maintenance facility, termination of a management agreement with Fortress, and investments in aviation assets.

Legacy Contract Margin Impact

The Montreal facility had a one to two percentage point impact on Q4 margins due to legacy third-party contracts.

Company Guidance

During the FTAI Aviation fourth-quarter 2024 earnings call, the company provided guidance for 2025, projecting an annual business segment EBITDA of $1.1 billion to $1.15 billion, excluding corporate and other expenses. They also anticipate adjusted free cash flow of approximately $650 million for the year. FTAI highlighted their strategic capital initiatives (SCI), which include a $2.5 billion commitment for asset-level debt financing from ATLAS, a subsidiary of Apollo and Deutsche Bank. This initiative aims to improve market share and sustainably support airlines' long-term maintenance needs. Additionally, FTAI expects their annual aviation EBITDA to increase from $1.25 billion to approximately $1.4 billion in 2026, driven by growth in their Aerospace Products segment and ongoing strategic reinvestments.

Fortress Transportation Corporate Events

Business Operations and StrategyFinancial Disclosures

FTAI Aviation Outlines Growth Strategy Amid Challenges

Positive

Jan 21, 2025

FTAI Aviation Ltd. has announced its strategic initiatives and financial outlook, revealing an expected Adjusted EBITDA of $1.1 to $1.15 billion for 2025. The company is addressing recent short-seller allegations and has commenced a review in response. Despite these challenges, FTAI is optimistic about growth, particularly through its Strategic Capital initiative and PMA approvals, which are expected to enhance operational efficiency and profitability.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.