$1.50
$9.40
bear $1.50
base $6.00
bull $9.40
margin of safety $3.00
market price* $4.76
AerSale buys mid-life commercial aircraft, jet engines and used serviceable parts ("feedstock"), then monetizes them by selling whole aircraft and engines, selling parts, and leasing. About 63% of 2025 revenue ($211.6M of $335.3M) came from this Asset Management Solutions business, with the rest from TechOps: heavy and component maintenance plus proprietary Engineered Solutions such as AerSafe. About 46% of 2025 revenue came from customers outside the United States. How we measured earning power. We start from operating cash flow, then remove the swings caused by working capital and deduct stock compensation as a real cost. Only the part of capital spending needed to stand still is deducted. Working capital matters a great deal here because feedstock purchases run through inventory: inventory absorbed $168.6M of cash in 2023, $78.0M in 2024 and $54.8M in 2025, and operating cash flow was $(174.2)M, $11.2M and $(23.0)M in those years. Excluding these builds treats earnings as if inventory stopped growing. That is a fair steady-state view only if the existing inventory (about $364M at year-end 2025, including the non-current portion) is being converted to sales, and revenue has been flat at $335M to $345M since 2023 despite that build. We treat this as the main uncertainty. Earning power per share on this basis was $1.31 (2021), $0.91 (2022), $(0.14) (2023), $0.23 (2024) and $0.57 (2025). We use the median of these five years, $0.57, a window that begins after the December 2020 merger that created the current share base. It happens to equal the 2025 figure. 2025 earning power per share rose 143% from 2024; the cases below assume no growth in the first year. Base case, about $6.00 per share. Earning power stays at $0.57 per share for ten years, then declines about 10% a year as the current generation of aircraft and engines (the PW4000 and CF6-80 engine product lines the company is monetizing) ages out and has to be replaced by feedstock the company has not yet acquired. We credit no growth. Growth would depend on new engineered products, new leasing programs or a demand upswing, none of which is secured today. The $102M leased fleet (up from $68M) and higher parts sales from the feedstock already owned support the current level rather than growth. Bear case, about $1.50 per share. Earning power stays near the 2024 level of $0.23 per share for five years and then declines 20% a year. This reflects specific pressures already visible: gross margin on parts sales fell in 2025 (Aircraft 33.2% from 34.8%, Engine 35.4% from 39.1%) on product mix; the Goodyear, Arizona heavy maintenance contract ended, cutting TechOps service revenue by $22.5M; inventory reserves were $3.7M in 2024 and $3.5M in 2025; and the revolving credit line stands at $110.1M with only $4.4M of cash, so a slow sales year leaves little room. The company repurchased 6.4 million shares for $45.0M in March 2025. Bull case, about $9.40 per share. Earning power returns to about $0.85 per share, close to the 2022 result of $0.91, and holds for ten years, then declines 8% a year. This depends on the company converting feedstock already owned into sales at the higher parts and lease volumes seen in 2025 (engine used-parts sales up $34.0M and engine leasing up $7.5M), and on the Component MRO and Engineered Solutions gains that lifted TechOps gross margin to 25.6% from 16.6%. What we tried to break. The largest assumption is that inventory purchases are discretionary and will stop growing. Against that, the company states that operating cash burn in 2025 was mainly feedstock acquisition ($99.6M in 2025 versus $61.7M in 2024), and it funded 2025 through additional borrowing. If purchases must keep rising just to hold revenue flat, true earning power is lower than shown and the base value is too high; this is why the margin-of-safety price sits well below the base case. No customer exceeded 10% of 2025 sales, which reduces concentration risk relative to 2024, when one customer was $50.9M of sales. We do not deduct debt separately because interest is already paid out of the cash flow used above. Margin-of-safety price. About $3.00 per share, roughly half the base value and twice the bear value, reflecting the cyclicality of aircraft asset values, the leverage and the cash-flow uncertainty above.