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Spirit AeroSystems (SPR)
NYSE:SPR
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Spirit AeroSystems
(NYSE:SPR)38Underperform
Positive Factors
Financial Support
Boeing and Airbus continue to support Spirit’s liquidity and have provided an additional $457m in advances.
Planned Divestitures
Planned divestitures can raise an estimated $1.05B, which would outweigh estimated cash use, contributing positively to SPR's financial situation.
Negative Factors
Cash Flow Uncertainty
The ongoing BA strike is causing Spirit Aerosystems to furlough employees and warns of further headcount cuts if the strike continues.
Debt Concerns
SPR exited Q3 with $4403MM in debt but only $218MM in cash, leading to a warning of 'substantial doubt about our ability to continue as a going concern.'
Financial Performance
Spirit Aerosystems reported Q3 adjusted EPS of -$3.03, below consensus -$0.38.
Spirit AeroSystems (SPR) vs. S&P 500 (SPY)
Market Cap
$3.92B
Dividend YieldN/A
Average Volume (3M)1.27M
Price to Earnings (P/E)―
Beta (1Y)1.12
Revenue Growth4.44%
EPS Growth-202.63%
CountryUS
Employees20,655
SectorIndustrials
Sector Strength66
IndustryAerospace & Defense
Share Statistics
EPS (TTM)-18.32
Shares Outstanding117,266,120
10 Day Avg. Volume1,489,024
30 Day Avg. Volume1,274,483
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.62
Price to Cash Flow (P/CF)7.20
P/FCF Ratio5.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$36.35Price Target Upside9.59% Upside
Rating ConsensusHold
Number of Analyst Covering5
Spirit AeroSystems Business Overview & Revenue Model
Company DescriptionSpirit AeroSystems Holdings, Inc. (SPR) is one of the world's largest non-OEM designers and manufacturers of aerostructures for commercial airplanes, defense platforms, and business/regional jets. Headquartered in Wichita, Kansas, Spirit AeroSystems specializes in manufacturing complex fuselages, pylons, nacelles, and wing components. The company operates in multiple sectors, including commercial aviation, defense, and space, leveraging advanced manufacturing processes and technologies to deliver high-quality, reliable, and innovative aerospace solutions.
How the Company Makes MoneySpirit AeroSystems generates revenue primarily through the design, manufacturing, and assembly of aerostructures for leading aircraft manufacturers like Boeing and Airbus. The company's revenue model is heavily reliant on long-term supply agreements and contracts with these major aerospace companies. Key revenue streams include the sale of fuselage systems, propulsion systems, and wing components. Spirit AeroSystems also benefits from aftermarket services, providing maintenance, repair, and overhaul operations. Additionally, the company has significant partnerships and collaborations with defense contractors, contributing to its earnings through the production of components for military aircraft. These strategic relationships, along with a global production network, enable Spirit AeroSystems to maintain a steady flow of income and sustain its market position.
Spirit AeroSystems Financial Statement Overview
Summary
Spirit AeroSystems is facing substantial financial challenges across all major areas. The company is struggling with profitability and cash flow, coupled with a highly leveraged balance sheet. These factors collectively indicate significant financial distress, requiring urgent strategic and operational improvements to restore financial health and investor confidence.Income Statement
The company's income statement reveals significant challenges. Despite a slight revenue increase of 4.4% from 2023 to 2024, profitability metrics are concerning. The gross profit margin is highly negative due to substantial cost overruns, and the net income has been consistently negative, indicating persistent losses. This declining profitability trajectory is a major concern for investors.35
Negative
Balance Sheet
The balance sheet shows a precarious financial position with negative stockholders' equity, indicating liabilities exceed assets. The debt-to-equity ratio is undefined due to negative equity, signaling high leverage and financial risk. The company’s equity ratio is negative, further highlighting financial instability. This unfavorable balance sheet position poses a considerable risk.25
Negative
Cash Flow
Cash flow analysis indicates significant operational challenges. The operating cash flow is deeply negative, and the free cash flow has deteriorated, reflecting poor cash generation. The cash flow to net income ratios cannot be calculated due to negative net income and cash flow figures. This negative cash flow trend raises concerns about the company's ability to sustain operations without external financing.30
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 6.32B | 6.05B | 5.03B | 3.95B | 3.40B | Gross Profit |
| -1.37B | 206.20M | 48.60M | -117.80M | -440.70M | EBIT |
| -1.79B | -134.20M | -295.10M | -304.40M | -812.80M | EBITDA |
| -1.79B | 41.00M | 41.80M | 15.00M | -613.00M | Net Income Common Stockholders |
| -2.14B | -616.20M | -544.60M | -538.00M | -865.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 537.00M | 823.50M | 658.60M | 1.48B | 1.87B | Total Assets |
| 6.76B | 6.95B | 6.67B | 7.74B | 8.38B | Total Debt |
| 4.47B | 4.18B | 3.96B | 3.88B | 3.95B | Net Debt |
| 3.94B | 3.35B | 3.30B | 2.40B | 2.07B | Total Liabilities |
| 9.38B | 7.45B | 6.91B | 7.29B | 7.53B | Stockholders Equity |
| -2.62B | -499.70M | -247.50M | 448.30M | 856.50M |
| Cash Flow | Free Cash Flow | |||
| -1.27B | -373.80M | -516.20M | -213.80M | -863.80M | Operating Cash Flow |
| -1.12B | -225.80M | -394.60M | -63.20M | -744.90M | Investing Cash Flow |
| -152.40M | -147.80M | -155.50M | -163.80M | -502.00M | Financing Cash Flow |
| 994.50M | 531.60M | -261.00M | -163.50M | 769.50M |
Spirit AeroSystems Technical Analysis
Negative
33.17
Price Trends
34.07
Negative
33.10
Positive
33.15
Positive
Market Momentum
-0.13
Positive
39.69
Neutral
18.54
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPR, the sentiment is Negative. The current price of 33.17 is below the 20-day moving average (MA) of 34.19, below the 50-day MA of 34.07, and above the 200-day MA of 33.15, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 39.69 is Neutral, neither overbought nor oversold. The STOCH value of 18.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPR.
Spirit AeroSystems Risk Analysis
Spirit AeroSystems disclosed 49 risk factors in its most recent earnings report. Spirit AeroSystems 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
Spirit AeroSystems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $70.43B | 17.17 | 27.75% | 1.65% | 4.44% | 110.33% | |
75 Outperform | $73.42B | 19.92 | 17.44% | 2.09% | 12.88% | 13.78% | |
74 Outperform | $111.49B | 21.23 | 81.04% | 2.69% | 5.14% | -19.14% | |
64 Neutral | $13.70B | 17.42 | 11.63% | 0.11% | 0.14% | -5.38% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
38 Underperform | $3.92B | ― | 81.63% | ― | 4.44% | -202.63% | |
37 Underperform | $118.83B | ― | -162.23% | ― | -14.49% | -399.90% |
* Industrials Sector Average
Performance Comparison
SPR
Spirit AeroSystems
33.17
-1.28
-3.72%
BA
Boeing
154.18
-38.31
-19.90%
GD
General Dynamics
271.56
3.70
1.38%
LMT
Lockheed Martin
473.65
50.01
11.80%
NOC
Northrop Grumman
486.52
35.04
7.76%
TXT
Textron
75.42
-16.30
-17.77%
Spirit AeroSystems Earnings Call Summary
Earnings Call Date: Feb 28, 2025 | % Change Since: -4.96% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Negative
The earnings call highlights growth in revenue and strong performance in the Defense & Space segment. However, these positives are overshadowed by significant financial losses, production challenges with Boeing, and ongoing commercial issues with Airbus, leading to a strained cash flow and operational disruptions.Highlights
Revenue Growth
Revenue for the quarter was $1.7 billion, up 19% from the first quarter of 2023, attributed to higher production on Commercial programs and increased Defense & Space revenues.
Defense & Space Segment Performance
Revenue grew to $251 million due to higher activity on development and classified programs as well as the Sikorsky CH-53K and FLRAA programs. Operating margin was 13%, an increase due to higher classified program activities and strong execution.
Lowlights
Significant Forward Losses
First quarter net forward losses were $495 million, including $281 million from A350 and $167 million from A220 programs due to inability to reach a conclusion to commercial negotiations with Airbus.
Boeing 737 Production Challenges
The implementation of Boeing's product verification process delayed delivery acceptance, led to a buildup of undelivered units, higher levels of inventory, and lower cash flow.
Free Cash Flow Challenges
Free cash flow usage for the quarter was $444 million compared to $69 million in the first quarter of 2023, primarily due to disruption in the 737 production and delivery process.
Airbus Commercial Negotiations
Ongoing inability to reach a pricing agreement with Airbus has resulted in significant financial strain and forward losses for the company.
Company Guidance
During the Q1 2024 earnings call for Spirit AeroSystems Holdings, the company provided detailed guidance on several operational and financial metrics. The executives highlighted that despite the ongoing discussions with Boeing regarding a potential acquisition, Spirit remains committed to stabilizing operations and meeting customer commitments. The company reported a revenue of $1.7 billion, up 19% from the previous year, but faced a challenging quarter with an adjusted EPS of negative $3.93 and forward losses of $495 million, primarily due to unresolved pricing negotiations with Airbus on the A350 and A220 programs. The 737 program's production was slowed to 31 units per month, with Boeing advancing $425 million to Spirit to manage cash flow disruptions. Spirit's Defense & Space segment showed strong performance with a 13% operating margin, driven by increased activity on development programs. The company is focused on aligning its supply chain and workforce to support future production rate increases, while maintaining liquidity and addressing supply chain challenges related to the 787 and Airbus programs.Spirit AeroSystems Corporate Events
Financial Disclosures
Spirit AeroSystems Shares Preliminary Financial Results
Neutral
Feb 10, 2025
On February 10, 2025, Spirit AeroSystems disclosed information to its lenders, which was not originally intended for public release. The presentation included preliminary financial results and forward-looking statements subject to many risks and uncertainties, such as geopolitical tensions and supply chain fragility. Although the details were shared under confidentiality agreements, Spirit AeroSystems emphasized that the information should not be considered as material non-public information nor relied upon for investment decisions.
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.