New Horizon Aircraft Ltd. (NASDAQ: HOVR)

Sector: Industrials Industry: Aerospace & Defense CIK: 0001930021
Market Cap 56.71 Mn
P/B 5.53
P/E -2.57
P/S 0.00
ROIC (Qtr) -205.55
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 13,475.18
Debt/Equity (Qtr) 0.00
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About

New Horizon Aircraft Ltd., also known as HOVR, operates in the aerospace industry as an Original Equipment Manufacturer (OEM), specializing in the design of a next-generation hybrid electric Vertical Takeoff and Landing (eVTOL) aircraft for the Regional Air Mobility (RAM) market. The company's flagship product, the Cavorite X7, is a 7-seat aircraft that combines the vertical takeoff and landing capabilities of a helicopter with the speed and range of a traditional aircraft. New Horizon Aircraft operates in the RAM market, a rapidly growing sector...

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Investment thesis

Bull case

  • Healthy cash reserves of 17.24M provide 1279.16x coverage of short-term debt 13475.18, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 18.18M provides 1349.37x coverage of total debt 13475.18, indicating robust asset backing and low credit risk.
  • Tangible assets of 18.18M provide robust 8.87x coverage of other current liabilities 2.05M, indicating strong asset backing.
  • Cash reserves of 17.24M provide robust 6.37x coverage of current liabilities 2.71M, indicating strong short-term solvency.
  • Strong cash position of 17.24M provides 8.41x coverage of other current liabilities 2.05M, indicating excellent liquidity.

Bear case

  • Investment activities of (573049.65) provide weak support for R&D spending of 5.86M, which is -0.10x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Free cash flow of (7.74M) provides weak coverage of capital expenditures of 573049.65, with a -13.50 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (21.91M) show weak coverage of depreciation charges of 131205.67, with a -166.99 ratio indicating high capital intensity and potential reinvestment needs.
  • The company's operating cash flow of (7.16M) shows concerning coverage of stock compensation expenses of 2.94M, with a -2.44 ratio indicating potential earnings quality issues.
  • Free cash flow of (7.74M) represents just -0.57x of debt issuance 13.54M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Aerospace & Defense
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GE General Electric Co 347.18 Bn 39.89 7.57 20.49 Bn
2 RTX RTX Corp 272.90 Bn 40.54 3.08 39.51 Bn
3 BA Boeing Co 185.24 Bn 98.01 2.07 54.10 Bn
4 LMT Lockheed Martin Corp 151.16 Bn 30.13 2.01 21.70 Bn
5 NOC Northrop Grumman Corp /De/ 100.62 Bn 24.06 2.40 17.02 Bn
6 HWM Howmet Aerospace Inc. 99.61 Bn -156.86 7.95 3.05 Bn
7 GD General Dynamics Corp 94.33 Bn 27.82 2.39 8.01 Bn
8 TDG TransDigm Group INC 75.70 Bn 41.87 8.31 30.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.59 2.53
EV to Cash from Ops. EV/CFO -4.02 74.76
EV to Debt EV to Debt 2,138.88 70.01
EV to EBIT EV/EBIT -1.32 8.56
EV to EBITDA EV/EBITDA -2.20 28.68
EV to Free Cash Flow [EV/FCF] EV/FCF -3.73 73.68
EV to Market Cap EV to Market Cap 0.51 1.05
EV to Revenue EV to Revenue 0.00 9.46
Price to Book Value [P/B] P/B 5.53 7.10
Price to Earnings [P/E] P/E -2.57 21.32
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.71
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 18.88
Dividend per Basic Share Div per Share (Qtr) 0.00 0.72
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 11.28
Interest Coverage Int. cover (Qtr) -145.04 -10.55
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -391.69 -77.00
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 2,601.16 27,757.82
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.15
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -412.14 -9.06
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -94.96 11.61
EBIT Growth (1y) % EBIT 1y % (Qtr) -412.14 -0.09
EBT Growth (1y) % EBT 1y % (Qtr) -414.52 -31.50
EPS Growth (1y) % EPS 1y % (Qtr) -450.51 -100.94
FCF Growth (1y) % FCF 1y % (Qtr) -70.31 26.50
Gross Profit Growth (1y) % Gross Profit Growth (1y) % 0.00 -1.44
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.00 0.51
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 6.37 1.78
Current Ratio Curr Ratio (Qtr) 6.51 3.60
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 0.32
Interest Cover Ratio Int Coverage (Qtr) -145.04 -10.55
Times Interest Earned Times Interest Earned (Qtr) -145.04 -10.55
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 -309.23
EBIT Margin % EBIT Margin % 0.00 -340.98
EBT Margin % EBT Margin % 0.00 -345.99
Gross Margin % Gross Margin % 0.00 -51.92
Net Profit Margin % Net Profit Margin % 0.00 -347.41