We came across a bullish thesis on Air Lease Corporation (AL) on Substack by Value Don’t Lie. In this article, we will summarize the bulls’ thesis on AL. Air Lease Corporation (AL)’s share was trading at $57.27 as of May 14th. AL’s trailing P/E was 10.01 according to Yahoo Finance.
An impressive fleet of aircrafts taking off from the main runway of the Regional Air Carrier services.
Air Lease Corporation (AL), founded by aviation pioneer Steven Udvar-Házy, operates a scaled and resilient aircraft leasing platform with a proven model of acquiring new aircraft using investment-grade debt and leasing them long-term to over 200 airlines across 70 countries. As of Q1 2025, AL owns 487 aircraft valued at $28.6 billion, with an average fleet age of just 4.7 years and lease term of 7.2 years, while managing another 57 planes. Its robust forward orderbook of 269 aircraft—50% of its existing fleet—is already 62% placed, with all deliveries through 2026 fully committed, ensuring predictable future cash flows.
The global shift toward leased aircraft, rising from 32% in 2004 to 50% in 2024, coupled with constrained aircraft supply and roll-off of low-rate pandemic-era leases, creates a favorable demand-supply dynamic. Air Lease expects 150–200 basis points of yield expansion in the coming years. Yet, despite these tailwinds, the stock trades at a significant discount to AerCap, the industry leader. With a $6 billion market cap and $5.33 in trailing EPS, AL trades at 10x earnings and just 0.77x tangible book, compared to AerCap’s 9.4x and 1.3x respectively. This reflects slower book value compounding, lower returns on assets, and a less transparent capital allocation strategy. However, AL’s growth prospects are compelling: deploying its $17 billion orderbook could grow the asset base to $50 billion by 2029, and generate $2.7 billion in operating cash flow—or $24 per share—translating to a potential stock price of $89. With minimal dilution, rising lease yields, and structural tailwinds, AL offers both downside protection and significant upside.
Air Lease Corporation (AL) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held AL at the end of the fourth quarter which was 33 in the previous quarter. While we acknowledge the risk and potential of AL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
