Boeing Treads Water Amid Concerns Over Cash Burn
Boeing (NYSE:BA) has been stagnant for six months, experiencing only a small loss of 1.5% and trading at $210.29 per share.
The company's performance is being compared to the S&P 500's 14.2% gain over the same period.
Despite this underperformance, Boeing has two key advantages: elevated demand driving higher sales volumes and outstanding long-term earnings per share (EPS) growth.
In the latest quarter, Boeing sold 171 units, representing a 60.4% year-on-year growth rate over the last two years. This shows that its commercial aircraft have a unique value proposition and customer loyalty.
Additionally, Boeing's full-year EPS has turned positive after five years of losses, indicating an inflection point for the company.
However, there is one reason to be cautious: Boeing's cash burn has ignited concerns. Despite posting positive free cash flow this quarter, its resources have been drained over the last five years due to demanding reinvestments, limiting its ability to return capital to investors.