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StandardAero, Inc.
(NYSE:SARO)
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Rating:66Neutral
Price Target:
$27.00
▲(7.27% Upside)
Action:Reiterated
Date:08/09/26
The score is driven primarily by improving profitability and a repaired leverage profile, reinforced by a strongly positive earnings call with raised 2026 guidance and clear operational momentum. Offsetting these positives are weaker and less consistent cash conversion (TTM cash flow step-down vs 2025) and a relatively demanding P/E (~32.6). Technicals are supportive but not strong enough to outweigh the cash-flow and valuation constraints.
Positive Factors
Improving revenue and profitability
Sustained revenue growth alongside a shift from losses to stronger profitability indicates improving operating execution. Rising earnings and margins can support reinvestment, debt reduction and resilience across StandardAero’s recurring aftermarket service base.
Negative Factors
Inconsistent cash conversion
Positive cash flow has returned, but the sharp TTM decline and weak conversion from earnings indicate working-capital swings or elevated reinvestment needs. This could constrain debt reduction and make reported profit less dependable as a funding source.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving revenue and profitability
Sustained revenue growth alongside a shift from losses to stronger profitability indicates improving operating execution. Rising earnings and margins can support reinvestment, debt reduction and resilience across StandardAero’s recurring aftermarket service base.
Read all positive factors
StandardAero, Inc. (SARO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.33B
Dividend YieldN/A
Average Volume (3M)3.75M
Price to Earnings (P/E)25.3
Beta (1Y)1.25
Revenue Growth12.56%
EPS Growth144.85%
CountryUS
Employees8,000
SectorGeneral
Sector StrengthN/A
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.99
Shares Outstanding330,919,430
10 Day Avg. Volume3,184,719
30 Day Avg. Volume3,750,805
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)3.53
Price to Sales (P/S)1.55
P/FCF Ratio46.20
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$35.75Price Target Upside42.03% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)1.18
Revenue Forecast (FY)$6.46B
StandardAero, Inc. Business Overview & Revenue Model
Company Description
StandardAero, Inc., founded in 1911 and based in Scottsdale, Arizona, offers specialized post-sale support for aircraft engines. The company provides these services for both fixed-wing and rotary-wing aircraft across a broad international scope, i...
How the Company Makes Money
StandardAero makes money primarily by selling aftermarket aerospace services, with revenue largely generated from maintenance, repair and overhaul work performed under customer work orders and longer-term maintenance programs. Key revenue streams ...
StandardAero, Inc. Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 18, 2026
Earnings Call Sentiment Positive
The call conveyed a strongly positive operational and financial tone: double-digit adjusted EBITDA growth, record margins, positive free cash flow, profitability on two key growth programs (LEAP and CFM56 DFW), a strategic $180M license expansion with multi-year EBITDA upside, a targeted acquisition, share repurchases and improved leverage/ratings. Challenges included temporary CRS margin pressure, short-term military input delays, continued supply chain uncertainty and the one-time elimination of low/no-margin pass-through revenue which reduced reported growth but improved margin quality. Management raised 2026 guidance and reiterated conservative assumptions on supply chains, balancing optimism on demand and execution with prudent risk acknowledgement.Positive Updates
Revenue Growth
Total revenue of $1.6 billion, up 4.6% year-over-year; company raised full-year revenue guidance by $50 million to a range of $6.375B–$6.5B.
Negative Updates
Elimination of Low/No-Margin Pass-Through Revenue
Company eliminated $300M–$400M of low/no-margin material pass-through revenue in 2026; this reduced reported revenue growth but materially improved margins and working capital dynamics.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Total revenue of $1.6 billion, up 4.6% year-over-year; company raised full-year revenue guidance by $50 million to a range of $6.375B–$6.5B.
Read all positive updates
Company Guidance
StandardAero raised 2026 guidance: revenue to $6.375–6.5B (up $50M), adjusted EBITDA to $885–910M and adjusted EPS to $1.50–1.57 (now excluding tax‑adjusted amortization); the company also provided adjusted free cash flow guidance of $270–300M (excluding license intangible acquisition costs), Engine Services adjusted EBITDA of $770–785M, reiterated CRS revenue and EBITDA guidance with an expected return to high‑20% CRS margins in H2, and assumed interest expense of $150–160M, an adjusted tax rate of 23.5–25.5%, CapEx of $100–110M, corporate expense of ~$105M and ~332.5M diluted shares. Management cited Q2 results underpinning the raise (Q2 revenue $1.6B, adjusted EBITDA $230M up 12.3%, adjusted EBITDA margin 14.4% up 100bps, free cash flow +$50M, net income $97M up 43.7%) and a net debt/adjusted EBITDA of 2.6x (target 2–3x); it also highlighted a $180M license expansion expected to add ~$25M annual adjusted EBITDA at run‑rate ($10M in 2027, $20M in 2028, $25M in 2029+, ~80% to Engine Services) and market growth assumptions of commercial aerospace low‑double digits to mid‑teens (normalized), business aviation high‑single to low‑double digits, and military/helicopter low‑double digits weighted to the back half.StandardAero, Inc. Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
62
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.32B | 6.06B | 5.24B | 4.56B | 4.15B |
| Gross Profit | 927.37M | 897.45M | 754.16M | 635.28M | 545.68M |
| EBITDA | 834.56M | 744.73M | 551.34M | 511.87M | 459.14M |
| Net Income | 323.97M | 277.42M | 10.97M | -35.06M | -21.00M |
Balance Sheet | |||||
| Total Assets | 6.85B | 6.56B | 6.21B | 5.76B | 5.73B |
| Cash, Cash Equivalents and Short-Term Investments | 179.06M | 289.72M | 102.58M | 57.98M | 120.06M |
| Total Debt | 2.56B | 2.45B | 2.41B | 3.38B | 3.37B |
| Total Liabilities | 4.10B | 3.89B | 3.84B | 4.61B | 4.53B |
| Stockholders Equity | 2.75B | 2.67B | 2.37B | 1.15B | 1.20B |
Cash Flow | |||||
| Free Cash Flow | 218.39M | 203.89M | -46.85M | -17.42M | -16.95M |
| Operating Cash Flow | 290.58M | 316.70M | 76.33M | 67.89M | 27.26M |
| Investing Cash Flow | -103.58M | -106.40M | -235.45M | -112.86M | -60.75M |
| Financing Cash Flow | -99.99M | -25.51M | 203.76M | -14.69M | -25.78M |
StandardAero, Inc. Risk Analysis
StandardAero, Inc. disclosed 61 risk factors in its most recent earnings report. StandardAero, Inc. reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
StandardAero, Inc. Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $12.17B | 32.18 | 18.00% | 0.29% | 15.65% | 78.52% | |
70 Outperform | $3.33B | 38.23 | 51.97% | ― | 14.49% | ― | |
66 Neutral | $8.33B | 25.33 | 12.12% | ― | 12.56% | 144.85% | |
59 Neutral | $5.40B | -179.22 | -2.01% | ― | 7.85% | 22.99% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
SARO
StandardAero, Inc.
25.08
-1.88
-6.97%
ATRO
Astronics
77.99
47.80
158.37%
MRCY
Mercury Systems
90.47
21.97
32.07%
MOG.A
Moog
383.23
185.35
93.66%
StandardAero, Inc. Corporate Events
Executive/Board ChangesShareholder Meetings
StandardAero Shareholders Approve Directors and Governance Matters
Positive
Jun 26, 2026
StandardAero, Inc. held its 2026 Annual Meeting of Stockholders on June 25, 2026, where shareholders voted on three corporate governance proposals. Investors elected three Class II directors — Douglas V. Brandely, Wendy M. Masiello, and Stef...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
StandardAero Announces CEO Succession and Affirms 2026 Outlook
Positive
Jun 2, 2026
On June 2, 2026, StandardAero announced that lead independent director and 35‑year industry veteran Paul McElhinney will become chief executive officer on October 1, 2026, succeeding Russell Ford, who plans to retire as CEO on that date and ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.