AAR (AIR) AI Stock Analysis

• Market Cap: $3.12B
• Dividend Yield: N/A
• Average Volume (3M): 429.63K
• Price to Earnings (P/E): 108.9
• Beta (1Y): 1.06
• Revenue Growth: 17.59%
• EPS Growth: -56.15%
• Country: US
• Employees: 5,700
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 1.08
• Shares Outstanding: 36,112,490
• 10 Day Avg. Volume: 762,105
• 30 Day Avg. Volume: 429,632
• PEG Ratio: -2.39
• Price to Book (P/B): 1.80
• Price to Sales (P/S): 0.79
• P/FCF Ratio: 1.56K
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 6.84
• Enterprise Value/Ebitda: 19.46
• 1Y Price Target: $88.00
• Price Target Upside: 0.11% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 68 Neutral
• Price Target: $89.00 ▲(1.25% Upside)

AAR's strong financial performance, particularly in revenue growth and improved margins, is a key strength. The technical indicators suggest bullish momentum, although valuation concerns due to a high P/E ratio and lack of dividend yield are notable risks. The positive earnings call further supports the stock's potential, but profitability and cash flow improvements are needed for a stronger financial position.

Positive Factors

Revenue Growth

AAR's strong revenue growth indicates robust demand for its services, enhancing its market position and supporting long-term business expansion.

Strategic Acquisitions

Strategic acquisitions and facility expansions strengthen AAR's service offerings and capacity, positioning it for sustained growth.

Parts Supply Segment Performance

The significant growth in the parts supply segment underscores AAR's competitive advantage in parts distribution, driving profitability.

Negative Factors

Low Net Profit Margin

A low net profit margin indicates challenges in converting revenue into profit, which can impact long-term financial health and shareholder returns.

Negative Free Cash Flow Growth

Negative free cash flow growth suggests cash management issues, potentially limiting AAR's ability to invest in growth opportunities.

Increased Net Debt Leverage

Increased net debt leverage can strain financial resources, affecting AAR's ability to manage debt and finance future growth initiatives.

AAR Business Overview & Revenue Model

Company Description

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Aviation Services segment offers aftermarket support and services; inventory management and distribution services; and maintenance, repair, and overhaul, as well as engineering services. This segment also sells and leases new, overhauled, and repaired engine and airframe parts, and components; and provides inventory and repair programs, warranty claim management, and outsourcing programs for engine and airframe parts and components, as well as performance-based supply chain logistics programs in support of the U.S. department of defense and foreign governments. In addition, it offers airframe inspection, maintenance, repair and overhaul, painting, line maintenance, airframe modification, structural repair, avionic and installation, exterior and interior refurbishment, and engineering and support services; and repairs and overhauls components, landing gears, wheels, and brakes. The Expeditionary Services segment provides products and services supporting the movement of equipment and personnel by the U.S. and foreign governments, and non-governmental organizations. This segment also designs, manufactures, and repairs transportation pallets, and various containers and shelters; and provides engineering, design, and system integration services for command and control systems. The company serves domestic and foreign passenger airlines; domestic and foreign cargo airlines; regional and commuter airlines; business and general aviation operators; original equipment manufacturers; aircraft leasing companies; aftermarket aviation support companies; and domestic and foreign military customers. It primarily markets and sells products and services through its employees and foreign sales representatives. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois.

How the Company Makes Money

AAR generates revenue through multiple key streams. Primarily, the company earns income from its aviation services, which include aircraft maintenance, repair, and overhaul (MRO) services, catering to both commercial and government clients. Additionally, AAR's supply chain management services contribute significantly to its revenue, as it provides parts distribution and logistics support for various aerospace and defense applications. The company also engages in aircraft leasing, which involves acquiring and leasing aircraft to airlines, generating recurring rental income. Strategic partnerships with major aerospace manufacturers and government contracts further bolster AAR's revenue, ensuring a steady flow of business and enhancing its market position.

AAR Financial Statement Overview

Summary

AAR demonstrates robust growth and operational efficiency with excellent revenue growth and improving cash flow. However, profitability margins remain moderate, and there is potential for enhancing shareholder returns. The balance sheet reflects a stable financial position, but debt levels require careful management to maintain financial health.

Income Statement

The company shows strong revenue growth with a 19.85% increase in the most recent TTM period compared to the previous year. Gross Profit Margin stands at 18.97% and Net Profit Margin at 0.45%, which are moderate. EBIT and EBITDA margins at 6.66% and 7.15% indicate stable operational efficiency. The trajectory suggests improving performance, but profitability could be further enhanced.

Balance Sheet

The company's debt-to-equity ratio is 0.86, reflecting manageable leverage. Return on Equity (ROE) is low at 1.03%, indicating room for profit improvement. The equity ratio of 42.60% suggests a stable financial position with a solid asset base, although debt levels should be monitored to prevent future risks.

Cash Flow

Free Cash Flow increased significantly by 98.56% in the TTM period. Operating Cash Flow to Net Income is 2.89, showing strong cash generation relative to net income. Free Cash Flow to Net Income is 2.21, indicating efficient cash utilization. The company has shown strong cash flow resilience and growth.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.86B	2.78B	2.32B	1.99B	1.82B	1.65B
Gross Profit	544.20M	527.70M	442.30M	370.10M	313.20M	275.90M
EBITDA	191.40M	169.50M	142.70M	161.30M	144.20M	73.10M
Net Income	28.90M	12.50M	46.30M	90.20M	78.70M	35.80M
Balance Sheet
Total Assets	2.93B	2.84B	2.77B	1.83B	1.57B	1.54B
Cash, Cash Equivalents and Short-Term Investments	80.00M	96.50M	85.80M	68.40M	53.50M	51.80M
Total Debt	1.10B	1.06B	1.07B	317.90M	156.30M	193.60M
Total Liabilities	1.68B	1.63B	1.58B	734.00M	539.40M	565.30M
Stockholders Equity	1.25B	1.21B	1.19B	1.10B	1.03B	974.40M
Cash Flow
Free Cash Flow	-2.00M	1.40M	13.90M	-6.20M	57.90M	93.90M
Operating Cash Flow	9.80M	36.10M	43.60M	23.30M	75.20M	105.20M
Investing Cash Flow	-7.80M	10.70M	-758.50M	-138.00M	-16.50M	-500.00K
Financing Cash Flow	26.50M	-33.70M	729.20M	137.70M	-59.80M	-469.50M

AAR Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 87.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIR, the sentiment is Positive. The current price of 87.9 is above the 20-day moving average (MA) of 78.00, above the 50-day MA of 76.46, and above the 200-day MA of 67.23, indicating a bullish trend. The MACD of 2.99 indicates Negative momentum. The RSI at 79.33 is Negative, neither overbought nor oversold. The STOCH value of 95.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIR.

AAR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VSEC	77 Outperform	$3.40B	94.14	1.93%	0.24%	13.00%	120.90%
DCO	73 Outperform	$1.39B	35.37	5.65%	―	2.42%	72.72%
AIR	68 Neutral	$3.12B	108.93	2.35%	―	17.59%	-56.15%
MRCY	63 Neutral	$4.51B	-115.39	-2.57%	―	9.19%	72.88%
SPR	43 Neutral	$4.66B	-1.98	81.63%	―	-2.60%	-94.76%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

AAR Corporate Events

AAR Corp Issues $150M Senior Notes to Reduce Debt

On August 14, 2025, AAR CORP., a leading provider of aviation services, issued $150 million in 6.750% Senior Notes due 2029 as an addition to their existing $550 million notes. The proceeds from this issuance are intended to repay outstanding borrowings under its unsecured revolving credit facility, enhancing the company’s financial flexibility and potentially impacting its market positioning by reducing debt obligations.

AAR Corp to Present Strategic Focus at Investor Meeting

AAR CORP. announced its management will present at an investor meeting on May 28, 2025, highlighting its strategic focus on core aviation services and improved margins since 2019. The company has restructured non-core businesses, completed acquisitions, and expanded its portfolio, positioning itself for growth in the aviation aftermarket industry. This transformation is expected to enhance AAR’s market positioning and offer significant benefits to stakeholders.