Willis Lease Finance (WLFC) just posted its strongest quarter on record, with Q1 2026 revenue of US$194.35 million, net income of US$25.08 million, and record lease rent and maintenance services revenues supporting a higher dividend.

The stock has pulled back, with a 1 day share price return of a 5.61% decline after a strong Q1 earnings beat. However, the 68.11% year to date share price return and very large 5 year total shareholder return suggest momentum has been building over time.

If earnings driven moves like Willis Lease Finance interest you, it can be worth scanning for other companies with strong execution and growth stories. Start by checking the 19 top founder-led companies

After a record quarter, a sharp one-day pullback and a share price above the current US$190 analyst target, the key question is whether Willis Lease Finance still trades at a discount or if the market is already pricing in future growth.

Preferred P/E of 13.7x: Is it justified?

On earnings, Willis Lease Finance trades on a P/E of 13.7x, while the last close was $225.47. The stock sits above both the US market and analyst target levels on recent returns.

The P/E ratio compares the current share price with the company’s earnings per share and is a quick way of seeing how much investors are paying for each dollar of profit. For Willis Lease Finance, a 13.7x P/E that is below the US market average of 19.3x suggests the stock is priced more conservatively than the broader market relative to its earnings.

Against closer peers, the gap is even wider. Willis Lease Finance’s 13.7x P/E is well below the US Trade Distributors industry average of 25.1x and also below the peer group average of 37.7x. This points to a sizeable valuation discount compared with sector companies that have similar business models.

Result: Price-to-earnings of 13.7x (UNDERVALUED)

However, the sharp one-day share price decline and a price above the US$190 analyst target could limit upside if sentiment or earnings expectations weaken.

Another View: DCF Says the Stock Is Expensive

While the P/E of 13.7x suggests good value against the market and peers, the SWS DCF model paints a very different picture. At a last close of $225.47, Willis Lease Finance trades well above the model’s estimated value of $28.72, which points to an overvalued result. So which signal should carry more weight for you right now?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Willis Lease Finance 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 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed signals in the story so far? If this stock is on your radar, it makes sense to quickly review the full picture, including the balance of potential upsides and downsides in the 2 key rewards and 2 important warning signs.

Looking for more investment ideas?

If you are serious about building a stronger portfolio after reading this, do not stop at one stock when there are other clear opportunities to review.

• Target dependable cash flows and capital strength by reviewing the solid balance sheet and fundamentals stocks screener (44 results).
• Hunt for quality on sale with the 51 high quality undervalued stocks before the market fully catches on.
• Prioritise resilience and sleep-better-at-night holdings with the 72 resilient stocks with low risk scores.

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.