CapEx is too high it's causing negative free cash flow and has been doing so the past 4 years. I didn't look at their business but whatever they do the physical cost of maintaining their plant, property, and equipment is so expensive it turns their positive operating cash flow negative and has been doing so for a long time. Revenue is pretty much flat. Maybe a bit of a slight decline. Cash on-hand has been dwindling slowly from $2 billion in 2016 down to $1.1 billion in 2019. Plant property and equipment assets have increased though. They have a larger amount of long term debt at $29 billion. The debt was growing but now seems to be maintaining the same level.
Usually if you see a company with negative free cash flow you want to see the business growing. You want increased revenue to indicate growth there. Example: Uber has negative free cash flow but the revenue is consistently growing even if that growth slowed a bit last year.
It could be a short to medium play because the share price seems to be oversold but doesn't look like a good long term investment. Looking at their financials they seem to be treading water.
There's some risks for sure, but it's the exponential growth in the leasing of planes that's got me interested. And with airlines having been hit hard as of late, I'm betting on this trend to grow as more of them may not have the capital on hand for these purchases, or want to keep such expensive depreciating assets on their books.
And from what I've read, it's very difficult for airlines to break these lease agreements. And should they file bankruptcy (wiping out their shareholders in a restructure), they'll still need to retain their planes so they can return to operations.
That and they have about $8B in cash and available credit. If things return to norm in the near future, this will be a nice investment and one I'm most likely to roll the dice on
once again the orange clown has talked shyt he cant back up
