AAR AI Stock Analysis
Want to see AIR full AI Analyst Report?
AAR (AIR) AI Stock Analysis
AAR
(NYSE:AIR)
The score is driven primarily by improving fundamentals (revenue growth, stronger TTM profitability, and better free cash flow) and a very constructive earnings-call outlook centered on growth, margin expansion, and the strategic MRO Holdings acquisition. These positives are tempered by weak technicals (downtrend and negative momentum) and the increased leverage and integration execution risk associated with the pending acquisition.
AAR (AIR) vs. SPDR S&P 500 ETF (SPY)
- Market Cap
- $4.59B
- Dividend Yield
- ―
- Average Volume (3M)
- 523.59K
- Price to Earnings (P/E)
- 23.2
- Beta (1Y)
- 0.98
- Revenue Growth
- 21.97%
- EPS Growth
- 515.59%
- Country
- US
- Employees
- 7,100
- Sector
- Industrials
- Sector Strength
- 63
- Industry
- Aerospace & Defense
AAR Business Overview & Revenue Model
Company Description
AAR Corp. delivers a wide array of products and services to the global commercial aviation, government, and defense sectors. Its Aviation Services division focuses on comprehensive aftermarket support, encompassing inventory management, distribution,...
How the Company Makes Money
AAR primarily makes money by selling aviation aftermarket services and products, generating revenue from a mix of service work and parts-related transactions. Key revenue streams include: (1) Maintenance, Repair and Overhaul (MRO) and other repair se...
AAR Earnings Call Summary
The call was strongly optimistic, characterized by broad-based first-quarter growth, higher margins, record cash flow, a raised full-year sales outlook and continued strong demand. Management also presented the MRO Holdings acquisition as strategically transformative, with substantial scale, profitability, cash generation and synergy opportunities. The primary challenges discussed were temporary HAECO integration dilution, the Indianapolis facility exit, declining WASS activity and higher leverage at acquisition close, but management provided specific timelines and deleveraging targets for these matters.
Q1-2027 Updates
Positive Updates
Negative Updates
Company Guidance
For the second quarter, AAR expects total sales growth, excluding Legacy Commercial Programs, of 14% to 16% and adjusted EBITDA margin, also excluding LCP, of 13.0% to 13.4%; for the full year, it now expects growth, excluding LCP, in the low teens, with both the second quarter and full year fiscal 2027 outlooks excluding any impact from the MRO Holdings acquisition. AAR expects to close the transaction in its fiscal third quarter ending February 2027, expects approximately $75 million of run rate cost synergies within the next 3 to 4 years, and expects adjusted EBITDA margins to reach 19% to 20% over the next 3 to 4 years, including the cost synergies identified. MRO Holdings is expected to generate approximately $1 billion of adjusted sales, $285 million of adjusted EBITDA, 27% adjusted EBITDA margin and more than $200 million of adjusted operating cash flow in calendar 2026; AAR expects net leverage to be approximately 3.6x at closing, decline to approximately 3x on a realized synergies basis within 24 months following close, and return to its 2 to 2.5x target range over the medium term, including the assumed exercise of the options, while maintaining a BB category credit rating profile following close.
AAR Financial Statement Overview
Summary
Financials show a positive trajectory with strong revenue scaling and improved TTM profitability (higher operating/net margins) alongside better free cash flow generation. Offsetting this, profitability and cash flow have been historically uneven and debt remains sizable in absolute terms, requiring sustained earnings and cash conversion.
Income Statement
78PositiveBalance Sheet
67PositiveCash Flow
72Positive| Breakdown | TTM | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.49B | 3.31B | 2.78B | 2.32B | 1.99B | 1.82B |
| Gross Profit | 664.60M | 622.00M | 527.70M | 442.30M | 370.10M | 313.20M |
| EBITDA | 402.30M | 342.70M | 169.50M | 142.70M | 161.30M | 144.20M |
| Net Income | 193.40M | 187.70M | 12.50M | 46.30M | 90.20M | 78.70M |
Balance Sheet | ||||||
| Total Assets | 3.43B | 3.36B | 2.84B | 2.77B | 1.83B | 1.57B |
| Cash, Cash Equivalents and Short-Term Investments | 104.50M | 84.00M | 96.50M | 85.80M | 68.40M | 53.50M |
| Total Debt | 978.40M | 995.00M | 1.05B | 1.07B | 317.90M | 156.30M |
| Total Liabilities | 1.68B | 1.65B | 1.63B | 1.58B | 734.00M | 539.40M |
| Stockholders Equity | 1.74B | 1.70B | 1.21B | 1.19B | 1.10B | 1.03B |
Cash Flow | ||||||
| Free Cash Flow | 149.70M | 33.30M | 1.40M | 13.90M | -6.20M | 57.90M |
| Operating Cash Flow | 201.90M | 98.70M | 36.10M | 43.60M | 23.30M | 75.20M |
| Investing Cash Flow | -310.50M | -308.70M | 10.70M | -758.50M | -138.00M | -16.50M |
| Financing Cash Flow | 130.10M | 208.60M | -33.70M | 729.20M | 137.70M | -59.80M |
AAR Technical Analysis
Price Trends
Market Momentum
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 114.17 is above the 20-day moving average (MA) of 103.64, above the 50-day MA of 109.06, and below the 200-day MA of 118.69, indicating a neutral trend. The MACD of 1.68 indicates Negative momentum. The RSI at 60.10 is Neutral, neither overbought nor oversold. The STOCH value of 84.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIR.
AAR Risk Analysis
AAR disclosed 22 risk factors in its most recent earnings report. AAR reported the most risks in the "Finance & Corporate" category.
Latest Risks Added
3 New RisksAAR Peers Comparison
Overall Rating
HEI76.4Outperform- AIR69Neutral
VSEC67Neutral
SARO66Neutral
DCO58Neutral
AMTM55Neutral
Financial Indicators
| Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| HEI | 76Outperform | $40.75B | 57.46 | 18.30% | 0.04% | 20.69% | 31.56% |
| AIR | 69Neutral | $4.65B | 23.16 | 11.63% | ― | 21.97% | 515.59% |
| VSEC | 67Neutral | $5.24B | 47.27 | 4.73% | 0.21% | 45.56% | 212.14% |
| SARO | 66Neutral | $9.35B | 26.86 | 12.78% | ― | 8.72% | 89.83% |
| Sector * | 63Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
| DCO | 58Neutral | $2.20B | 42.58 | 7.83% | ― | 8.86% | ― |
| AMTM | 55Neutral | $5.66B | 27.39 | 4.44% | ― | 11.44% | 291.35% |
* Industrials Sector Average
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| AIR | AAR Corp. | 114.17 | 34.09 | 42.57% | |
| DCO | Ducommun Incorporated | 145.19 | 53.75 | 58.78% | |
| HEI | HEICO Corporation | 349.35 | 32.17 | 10.14% | |
| VSEC | VSE Corporation | 191.94 | 25.69 | 15.45% | |
| AMTM | Amentum Holdings, Inc. | 22.73 | 0.57 | 2.57% | |
| SARO | StandardAero, Inc. | 28.74 | 3.16 | 12.35% |
AAR Corporate Events
AAR Announces Proposed Senior Notes Offerings Due 2031 and 2034
NeutralThe release identified AAR CORP. as a Delaware corporation and placed it in an aviation-related operating context, referencing commercial aviation, airline maintenance and repair outsourcing, and sales to the U.S. government and its contractors.On No...
AAR Highlights Outlook and Pending MRO Holdings Acquisition
NeutralAAR CORP. has released an investor education presentation, dated October 2026, for use in meetings with current and prospective investors and has made the materials available via its website, emphasizing that the deck is informational and not an offe...
AAR Expands Credit Facility to Support Growth Strategy
PositiveOn October 23, 2026, AAR CORP. amended its revolving credit facility, raising total commitments to $1.375 billion and extending the maturity to the fifth anniversary of the amendment, later communicated as running to October 2031. The amended facilit...
AAR Acquires Controlling Stake in MRO Holdings
PositiveOn September 28, 2026, AAR agreed to acquire a 65% controlling stake in Panama-based MRO Holdings, a leading aircraft maintenance, repair and overhaul provider with about $1.0 billion in 2026 sales, 27% adjusted EBITDA margins and a network of heavy...
AAR Shareholders Back Board, Compensation and New Stock Plan
PositiveOn September 23, 2026, AAR held its Annual Meeting, with approximately 93% of its 40,258,840 outstanding shares represented, signaling strong shareholder engagement in the company’s governance. Stockholders elected Class III directors John W. Dietric...
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.
Date of analysis: Oct 26, 2026