Assessing Spirit AeroSystems (SPR) Valuation Following Recent Share Price Fluctuations

Spirit AeroSystems Holdings (SPR) has been moving on investor radars lately, even though there is no single event driving the latest share price action. When a stock shows an upward or downward swing without a clear trigger, it often prompts a second look. Sometimes, moves like these hint at changing market sentiment, or they might reflect investors reassessing value after a period of volatility. Over the past year, Spirit AeroSystems Holdings has seen its stock climb 16%, capping off a mostly upward trend year to date with a 15% gain. The short-term picture has been more mixed, with shares slipping roughly 5% over the past month yet bouncing 5% in the past three months. Viewed against the backdrop of strong reported revenue growth and a sharp increase in net income, this price action suggests markets may be rethinking the company’s growth profile. Is all the recovery already reflected in today’s stock price, or could this recent dip create an interesting opportunity for patient investors?

Price-to-Sales of 0.7x: Is it justified?

Based on its price-to-sales ratio, Spirit AeroSystems Holdings currently appears to be attractively valued compared to industry peers. The company is trading at a price-to-sales ratio of 0.7x, while the U.S. Aerospace & Defense industry average is much higher at 2.8x. This suggests that the market is pricing Spirit AeroSystems at a considerable discount relative to its sector.

The price-to-sales (P/S) ratio measures the company’s stock price relative to its revenues, making it a useful tool for valuing unprofitable companies or those in cyclical industries where profits are harder to evaluate. For Spirit AeroSystems, which is not currently profitable, the P/S ratio serves as an important reference point for comparing its valuation at a time when traditional metrics like earnings may provide limited insight.

This low P/S multiple could indicate that investors are cautious about the company’s future prospects or that there is an opportunity if revenue growth accelerates. Ultimately, it reflects a market expectation for improvement, or skepticism about near-term profitability, placing Spirit AeroSystems at a valuation that may appeal to bargain hunters.

Result: Fair Value of $36.07 (OVERVALUED)

See our latest analysis for Spirit AeroSystems Holdings.

However, persistent net losses and recent share price setbacks could undermine the bullish case, particularly if revenue growth slows or if sentiment deteriorates further.

Find out about the key risks to this Spirit AeroSystems Holdings narrative.

Another View: What Does the SWS DCF Model Say?

Our discounted cash flow (DCF) analysis offers a different perspective on Spirit AeroSystems Holdings. Unlike price-to-sales ratios, the DCF model suggests the shares may actually be priced above their fair value. Which method better captures the company’s reality?

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding Spirit AeroSystems Holdings to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Spirit AeroSystems Holdings Narrative

If you feel this view does not quite capture your take, or you prefer hands-on analysis, you can quickly assemble your own narrative and interpretation. Do it your way

A great starting point for your Spirit AeroSystems Holdings research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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