I've been keeping an eye on Spirit AeroSystems Holdings, Inc. (NYSE:SPR) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe SPR has a lot to offer. Basically, it is a financially-sound company with a great history of performance, trading at a great value. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Spirit AeroSystems Holdings here.
Solid track record and good value
SPR delivered a bottom-line expansion of 26% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did SPR outperformed its past performance, its growth also exceeded the Aerospace & Defense industry expansion, which generated a 16% earnings growth. This paints a buoyant picture for the company. SPR's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. SPR's has produced operating cash levels of 0.4x total debt over the past year, which implies that SPR's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
SPR is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Compared to the rest of the aerospace & defense industry, SPR is also trading below its peers, relative to earnings generated. This bolsters the proposition that SPR's price is currently discounted.
For Spirit AeroSystems Holdings, I've put together three important factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for SPR’s future growth? Take a look at our free research report of analyst consensus for SPR’s outlook.
- Dividend Income vs Capital Gains: Does SPR return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from SPR as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SPR? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.