Re-Evaluating Supply Chain Resilience: The Case for Spirit AeroSystems in Aerospace

In the aerospace sector, where supply chains are as intricate as the engineering of the aircraft themselves, resilience is not just a virtue—it is a survival mechanism. Spirit AeroSystems, a critical supplier of aerostructures for Boeing and Airbus, has navigated a turbulent three-year period marked by production bottlenecks, pricing pressures, and a looming strategic overhaul. Yet, beneath the surface of its volatile earnings lies a company whose role in the global aerospace supply chain—and its pending acquisition by Boeing—suggests it may be undervalued in today's market.

A Tale of Two Quarters: Financial Volatility and Strategic Shifts

Spirit's financial performance has been a rollercoaster. In Q4 2023, the company reported $1.8 billion in revenue and $0.52 earnings per share (EPS), buoyed by higher production deliveries and the Boeing Memorandum of Agreement (MOA) executed in October 2023Spirit AeroSystems Reports 2023 Results^[2]. By Q4 2024, however, the same MOA—a restructuring of long-term pricing and production terms—had turned into a liability, dragging Spirit's EPS to a staggering $(5.38) as unfavorable pricing adjustments and production delays on the Boeing 787, Airbus A220, and A350 programs took their tollSpirit AeroSystems Reports Fourth Quarter 2024 Results^[1].

The second quarter of 2025 brought little relief. Spirit posted an EPS of $(5.36), with net forward losses on key programs driven by supply chain cost inflation and tariffs/C O R R E C T I O N -- Spirit Aerosystems/^[3]. Yet, the company's $51 billion backlog—a metric that reflects its entrenched position in commercial aviation—suggests that these losses are temporary rather than terminalSpirit AeroSystems Q3 2025 Earnings Report^[6]. The pending acquisition by Boeing, expected to close by year-end, could provide the liquidity and operational integration needed to stabilize its cash flowSpirit AeroSystems Reports Q1 Results Amid Boeing Acquisition^[4].

Supply Chain Resilience: A Double-Edged Sword

Spirit's challenges are emblematic of the broader aerospace industry's struggle to balance long-term contracts with short-term volatility. As a supplier of critical components—such as fuselage sections for the Boeing 737 and 787 and wing structures for Airbus models—Spirit's operations are inextricably linked to its customers' production cycles. In Q3 2025, for instance, the company saw a revenue boost from delayed Boeing 737 deliveries that had been held up by joint product verification processesSpirit AeroSystems Q3 2025 Earnings Report^[6]. However, this reliance also exposes it to ripple effects from customer delays, cost overruns, and geopolitical tariffs.

The company's recent $200 million in non-interest-bearing credit lines from AirbusSpirit AeroSystems Reports Q1 Results Amid Boeing Acquisition^[4] and a $152 million support packageAssessing Spirit AeroSystems Valuation^[5] highlight the lengths to which its customers are willing to go to maintain supply chain continuity. These measures, while temporary, underscore Spirit's strategic importance. Boeing's acquisition of Spirit—pending regulatory approvals—could further solidify this role by aligning incentives and reducing transaction costs.

Valuation Dilemmas: Cheap or Overpriced?

Spirit's stock currently trades at a price-to-sales (P/S) ratio of 0.7x, well below the 2.8x industry averageAssessing Spirit AeroSystems Valuation^[5]. This discount reflects investor skepticism about its near-term profitability, yet a discounted cash flow (DCF) analysis suggests the stock is overvalued at $36.07 per shareAssessing Spirit AeroSystems Valuation^[5]. The disconnect between these metrics raises a critical question: Is the market underestimating the value of Spirit's backlog and its potential post-acquisition synergies?

Consider the numbers: Spirit's $51 billion backlogSpirit AeroSystems Q3 2025 Earnings Report^[6] represents a multi-year revenue stream, even if current margins are strained. If Boeing's acquisition closes as planned, the integration of Spirit's operations could reduce Boeing's supplier costs and accelerate production timelines for the 787 and 737 programs. For investors, this scenario could unlock value that is not yet reflected in Spirit's stock price.

Risks and Realities

No analysis of Spirit would be complete without acknowledging its risks. The company's operating losses, driven by supply chain inflation and production inefficiencies/C O R R E C T I O N -- Spirit Aerosystems/^[3], are not trivial. Additionally, the litigation with its former CEO and regulatory hurdles for the Boeing acquisition add layers of uncertaintyAssessing Spirit AeroSystems Valuation^[5]. However, these challenges are not unique to Spirit; they are part of the broader industry's adjustment to post-pandemic demand and geopolitical tensions.

Conclusion: A Re-Evaluation of Resilience

Spirit AeroSystems is a microcosm of the aerospace sector's supply chain dynamics. Its financial struggles are real, but its strategic position—as a supplier with deep ties to Boeing and Airbus—and the pending acquisition by its largest customer suggest that its current valuation may not fully account for its long-term resilience. For investors willing to look beyond quarterly losses, Spirit represents a case study in how undervalued industrial players can play a pivotal role in an industry where supply chain continuity is paramount.