StandardAero, Inc. (SARO) AI Stock Analysis

• Market Cap: $8.76B
• Dividend Yield: N/A
• Average Volume (3M): 1.71M
• Price to Earnings (P/E): 65.9
• Beta (1Y): 1.25
• Revenue Growth: 16.09%
• EPS Growth: N/A
• Country: US
• Employees: 7,700
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.20
• Shares Outstanding: 334,470,280
• 10 Day Avg. Volume: 1,613,439
• 30 Day Avg. Volume: 1,705,785
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 2.32
• Enterprise Value/Gross Profit: 15.95
• Enterprise Value/Ebitda: 21.09
• 1Y Price Target: $33.63
• Price Target Upside: 28.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 64 Neutral
• Price Target: $29.00 ▲(10.77% Upside)

StandardAero, Inc. has a solid financial performance with strong revenue growth and improving profitability margins. The earnings call was positive, with increased guidance and strong segment performance. However, technical indicators suggest a bearish trend, and the high P/E ratio indicates overvaluation. Cash flow challenges and high debt levels are also concerns that need to be addressed.

Positive Factors

Revenue Growth

Strong revenue growth of 13.5% indicates robust demand for services, enhancing market position and supporting long-term business expansion.

Market Position

A strong backlog in engine MRO services highlights sustained demand and reinforces StandardAero's competitive edge in the aerospace sector.

Profitability Margins

Improving EBITDA margins reflect better cost management and operational efficiency, supporting long-term profitability and financial health.

Negative Factors

Cash Flow Challenges

Negative free cash flow due to growth investments and higher working capital needs can strain financial flexibility and impact future investments.

High Debt Levels

Elevated debt levels, despite reduced leverage, pose risks to financial stability and may limit the company's ability to invest in growth opportunities.

Dilutive Impact of Ramp Programs

Ramp programs' dilutive effect on margins could pressure profitability in the short term, though expected to improve as programs mature.

StandardAero, Inc. Business Overview & Revenue Model

Company Description

StandardAero, Inc. provides aerospace engine aftermarket services for fixed and rotary wing aircraft in the United States, Canada, the United Kingdom, Rest of Europe, Asia, and internationally. It operates in two segments, Engine Services and Component Repair Services. The Engine Services segment provides a suite of aftermarket services, including maintenance, repair and overhaul, on-wing and field service support, asset management, and engineering and related solutions to customers in the commercial aerospace, military and helicopter, and business aviation end markets. The Component Repair Services segment offers engine component and accessory repairs to the commercial aerospace, military and helicopter, land and marine, and oil and gas end markets. The company was founded in 1911 and is headquartered in Scottsdale, Arizona.

How the Company Makes Money

StandardAero generates revenue primarily through its comprehensive MRO services for aircraft engines and airframes. Key revenue streams include engine overhauls, routine maintenance, and repair services, as well as parts sales and component repairs. The company also benefits from long-term service agreements with various airline operators and military contracts, providing a steady income source. Strategic partnerships with aircraft manufacturers and leasing companies further enhance StandardAero's market position and contribute to its earnings by ensuring a strong client base and consistent business opportunities.

StandardAero, Inc. Financial Statement Overview

Summary

StandardAero, Inc. demonstrates strong revenue growth and improving profitability margins. While the balance sheet shows a decrease in leverage, high debt levels remain a concern. Cash flow management needs improvement, as free cash flow is still negative despite better operating cash flows. The company is on a positive trajectory, but must address cash flow and leverage challenges to achieve financial stability.

Income Statement

StandardAero, Inc. shows strong revenue growth with a 14.8% increase from 2023 to 2024, and a 10% increase from 2022 to 2023. The gross profit margin improved to 14.4% in 2024 from 13.9% in 2023, indicating better cost management. The net profit margin turned positive at 0.2% in 2024, recovering from a net loss in previous years. However, EBIT and EBITDA margins, while positive, indicate room for improvement at 7.7% and 10.5%, respectively.

Balance Sheet

The company's debt-to-equity ratio improved to 1.02 in 2024 from 2.94 in 2023, showing a reduction in leverage. Return on equity increased to 0.5% in 2024 from negative figures previously, but remains relatively low. The equity ratio improved to 38.2% from 19.9% in 2023, indicating stronger equity compared to total assets. Despite these improvements, high debt levels pose a potential risk.

Cash Flow

Operating cash flow increased slightly to $76.3M in 2024, and the free cash flow improved, though still negative at -$46.9M. The free cash flow to net income ratio remains negative, reflecting ongoing challenges in generating free cash flow. The operating cash flow to net income ratio is positive, indicating some efficiency in converting profits into cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	5.62B	5.24B	4.56B	4.15B
Gross Profit	817.45M	754.16M	635.28M	545.68M
EBITDA	618.12M	551.34M	530.20M	459.14M
Net Income	133.04M	10.97M	-35.06M	-21.00M
Balance Sheet
Total Assets	6.48B	6.21B	5.76B	5.73B
Cash, Cash Equivalents and Short-Term Investments	91.51M	102.58M	57.98M	120.06M
Total Debt	2.55B	2.41B	3.38B	3.37B
Total Liabilities	3.97B	3.84B	4.61B	4.53B
Stockholders Equity	2.51B	2.37B	1.15B	1.20B
Cash Flow
Free Cash Flow	-81.75M	-46.85M	-17.42M	-16.95M
Operating Cash Flow	73.38M	76.33M	67.89M	27.26M
Investing Cash Flow	-263.04M	-235.45M	-112.86M	-60.75M
Financing Cash Flow	219.56M	203.76M	-14.69M	-25.78M

StandardAero, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 26.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SARO, the sentiment is Negative. The current price of 26.18 is below the 20-day moving average (MA) of 27.06, below the 50-day MA of 27.69, and below the 200-day MA of 27.49, indicating a bearish trend. The MACD of -0.13 indicates Negative momentum. The RSI at 39.20 is Neutral, neither overbought nor oversold. The STOCH value of 26.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SARO.

StandardAero, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ERJ	79 Outperform	11.04B	29.53	11.46%	0.08%	22.95%	-1.01%
MOG.A	78 Outperform	6.39B	30.59	10.89%	0.57%	4.77%	4.50%
SARO	64 Neutral	$8.76B	65.93	7.25%	―	16.09%	―
MRCY	63 Neutral	4.45B	-113.84	-2.57%	―	9.19%	72.88%
ATRO	62 Neutral	1.50B	-270.89	-1.37%	―	10.99%	69.85%
SPR	41 Neutral	4.52B	-1.92	81.63%	―	-2.60%	-94.76%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

StandardAero, Inc. Corporate Events

StandardAero Holds Annual Stockholders Meeting on June 12

On June 12, 2025, StandardAero, Inc. conducted its Annual Meeting of Stockholders, where approximately 84.26% of the company’s outstanding common stock was represented. During the meeting, stockholders elected Peter J. Clare, Russell Ford, and Andrea Fischer Newman as Class I directors, ratified the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025, and approved the compensation of the company’s named executive officers. Additionally, it was decided that future advisory votes on executive compensation would occur annually.