Valuation Check: Is Spirit AeroSystems (SPR) Undervalued After Recent Share Price Dip?

Spirit AeroSystems Holdings (SPR) recently caught the eye of investors after its stock showed a modest dip over the past month, even though it has achieved steady gains year to date and reported strong revenue growth. This pattern raises some interesting valuation questions.

See our latest analysis for Spirit AeroSystems Holdings.

Spirit AeroSystems Holdings’ 1-year total shareholder return of 12.66% points to meaningful progress, even though the past month saw a 6.4% share price pullback from recent highs. Momentum has cooled a bit lately, but the longer-term numbers reflect steady gains and a market that continues to acknowledge the company’s turnaround and revenue strength.

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With strong revenue gains but a recent share price dip, the key question for investors is whether Spirit AeroSystems is trading at a discount, or if the stock already reflects expectations for future growth.

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

At a price-to-sales ratio of 0.7x, Spirit AeroSystems sits well below its US Aerospace & Defense sector peers, yet the company remains unprofitable at present. The last close price of $35.87 reflects a significant discount to both the industry average and the company’s robust annual revenue growth.

The price-to-sales ratio compares a company’s stock price to its revenues, offering investors a way to value businesses that might not yet be profitable. In aerospace manufacturing, this multiple can reveal whether the market is pricing in future growth, operational turnaround, or ongoing risks.

Spirit AeroSystems’ 0.7x price-to-sales ratio is not just low in absolute terms; it is substantially cheaper than the sector, where peers average 2.9x. Even compared to the peer group’s 2.5x, SPR stands out as a relative bargain. If the market shifts back toward the sector fair ratio, there could be notable upside.

Explore the SWS fair ratio for Spirit AeroSystems Holdings

Result: Price-to-Sales of 0.7x (UNDERVALUED)

However, persistent net losses and ongoing sector volatility could continue to weigh on Spirit AeroSystems’ valuation and limit near-term momentum.

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

Another View: What Does the DCF Model Say?

While the low price-to-sales ratio hints at a bargain, our SWS DCF model offers a different perspective. It estimates Spirit AeroSystems’ fair value to be much higher than today’s share price. This suggests the stock might be deeply undervalued if future cash flows are realized as forecast. But can the company deliver on those lofty expectations?

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Spirit AeroSystems Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 909 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Spirit AeroSystems Holdings Narrative

If you want to dive deeper or prefer a hands-on approach, you can review the numbers and build an independent view for yourself in just minutes: Do it your way.

A great starting point for your Spirit AeroSystems Holdings research is our analysis highlighting 2 key rewards 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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