VSE (VSEC) AI Stock Analysis

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VSE

(NASDAQ:VSEC)

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Rating:68Neutral

Price Target:$188.00▼(-2.05% Downside)

Action:reiterated

Date:11/09/26

The score is driven primarily by solid fundamentals (growth and improved leverage) and a very constructive earnings call with raised guidance and margin/FCF progress. These positives are tempered by premium valuation (high P/E, low yield) and only mixed technicals, with longer-term trend indicators still below key moving averages.

Positive Factors

Strong growth and margin expansionRapid revenue growth combined with expanding EBITDA margins indicates strong demand and operating leverage across VSE’s businesses. Broad organic growth and a higher-margin mix can support durable earnings progression while providing resources to reinvest in capacity, capabilities, and customer coverage.

Negative Factors

Uneven cash conversionAlthough cash generation has turned positive, operating cash flow remains modest relative to reported earnings and free cash flow has been volatile. Uneven conversion can reflect working-capital timing, limit internally funded investment, and make deleveraging less consistent over the next several quarters.

VSE (VSEC) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $5.39B
Dividend Yield: 0.21%
Average Volume (3M): 452.36K
Price to Earnings (P/E): 47.3
Beta (1Y): 1.41
Revenue Growth: 45.56%
EPS Growth: 212.14%
Country: US
Employees: 1,600
Sector: Industrials
Sector Strength: 63
Industry: Aerospace & Defense

VSE Business Overview & Revenue Model

Company Description

VSE Corporation engages in providing aviation aftermarket parts distribution and maintenance, repair, and overhaul services for air transportation assets for commercial and government markets. It offers its services to global client base of commercia...

How the Company Makes Money

VSE makes money primarily by selling aftermarket parts and providing maintenance-related services, with revenue concentrated in its two operating segments. (1) Aviation: The company generates revenue from providing aviation MRO and component repair s...

VSE Earnings Call Summary

Earnings Call Date:Nov 04, 2026(Q3-2026)|% Change Since:17.07%|Next Earnings Date:Mar 03, 2027

Earnings Call SentimentPositive

The call was strongly positive, supported by record revenue and profitability, robust organic growth, significant MRO and distribution expansion, improved free cash flow, lower leverage, successful integration and raised full-year guidance. Management also described supportive aviation aftermarket demand and multiple avenues for continued proprietary and capacity expansion. The main challenges were fourth-quarter seasonality, supply-chain issues, higher interest expense, macroeconomic and fuel-price uncertainty, expected growth moderation and the need to prioritize integration capacity.

Positive Updates

Record Third-Quarter Revenue and Profitability

Revenue reached a record $541 million, up 91% year over year, including approximately 17% organic growth. Adjusted EBITDA grew 126% to a record $107 million, while adjusted EBITDA margin expanded approximately 310 basis points to a record 19.8%.

Negative Updates

Fourth-Quarter Revenue Expected to Decline Sequentially

Management expects fourth-quarter revenue to be lower sequentially than third-quarter revenue because of seasonality and quarterly variability. PAG and Aero 3 are more seasonal, repair is now a larger portion of the business and tends to be more seasonal in the fourth quarter, and the comparison is affected by an unusually strong December 2025.

Company Guidance

VSE raised its full year 2026 revenue growth guidance to 65% to 66.5% from 61% to 64% and its adjusted EBITDA margin outlook to 18.9% to 19.1% from 18.7% to 19%; fourth quarter revenue is anticipated to be lower sequentially compared to the third quarter, with another strong quarter of free cash flow expected. For full year 2026, interest expense net, excluding interest income on the note receivable, is projected at approximately $36 million to $38 million, depreciation and amortization are expected to be approximately $96 million to $100 million, the effective tax rate is projected to be approximately 25% blended, stock-based compensation is expected to be approximately $18 million to $19 million, and capital expenditures are expected to be approximately 2% to 2.25% of revenue. The company expects synergy contributions to grow through 2027, expects engine aftermarket strength to continue into 2027, and will share 2027 guidance and forward outlook during its December Investor Day.

VSE Financial Statement Overview

Summary

Strong revenue growth and improving profitability (TTM revenue $1.62B; TTM net income $118.4M) plus a more conservative balance sheet with low leverage. Offsets are modest/pressured gross margin and still-uneven cash conversion: TTM operating cash flow ($58.9M) and free cash flow ($27.5M) are positive but comparatively low versus earnings and described as volatile.

Income Statement

74Positive

Balance Sheet

81Very Positive

Cash Flow

58Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.62B	1.11B	1.08B	860.49M	669.45M	750.85M
Gross Profit	252.57M	132.13M	108.20M	95.61M	57.24M	25.14M
EBITDA	263.95M	129.52M	110.18M	111.41M	78.21M	47.12M
Net Income	118.41M	53.49M	30.52M	39.13M	28.06M	7.97M
Balance Sheet
Total Assets	4.48B	2.03B	1.73B	1.35B	999.79M	918.56M
Cash, Cash Equivalents and Short-Term Investments	65.79M	69.36M	29.03M	7.77M	305.00K	518.00K
Total Debt	1.04B	342.80M	485.21M	459.26M	308.64M	317.73M
Total Liabilities	1.50B	589.77M	746.43M	733.61M	550.26M	501.23M
Stockholders Equity	2.98B	1.44B	988.19M	616.73M	449.53M	417.33M
Cash Flow
Free Cash Flow	27.46M	5.71M	-51.74M	-40.49M	-3.16M	-28.12M
Operating Cash Flow	58.93M	26.99M	-31.04M	-21.83M	8.05M	-17.60M
Investing Cash Flow	-2.22B	-276.45M	-263.67M	-235.69M	-2.38M	-61.63M
Financing Cash Flow	2.22B	289.79M	315.81M	264.97M	-5.71M	79.37M

VSE Technical Analysis

Technical Analysis SentimentPositive

Last Price191.94

Price Trends

50DMA172.00Positive

100DMA193.66Negative

200DMA194.23Negative

Market Momentum

MACD1.80Negative

RSI64.62Neutral

STOCH81.55Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VSEC, the sentiment is Positive. The current price of 191.94 is above the 20-day moving average (MA) of 159.45, above the 50-day MA of 172.00, and below the 200-day MA of 194.23, indicating a neutral trend. The MACD of 1.80 indicates Negative momentum. The RSI at 64.62 is Neutral, neither overbought nor oversold. The STOCH value of 81.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VSEC.

VSE Risk Analysis

VSE disclosed 28 risk factors in its most recent earnings report. VSE 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

3 New Risks

1.The Company may not realize the strategic benefits and cost synergies that are anticipated from the planned PAG Acquisition.Q4, 2025

2.The PAG Acquisition may not occur at all or may not occur in the expected time frame, which may negatively affect the trading price of the Company's common stock and the Company's future business and financial results.Q4, 2025

3.The Company has incurred and will continue to incur significant expenses in connection with the PAG Acquisition, regardless of whether the PAG Acquisition is completed.Q4, 2025

VSE Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

VSEC against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VVX	75Outperform	$2.59B	25.92	8.83%	―	13.16%	25.03%
AIR	72Outperform	$4.65B	23.16	11.63%	―	21.97%	515.59%
VSEC	68Neutral	$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

VSEC and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
VSEC	VSE Corporation	191.94	25.69	15.45%
AIR	AAR Corp.	114.17	34.09	42.57%
DCO	Ducommun Incorporated	145.19	53.75	58.78%
VVX	V2x, Inc.	82.17	27.83	51.21%
AMTM	Amentum Holdings, Inc.	22.73	0.57	2.57%
SARO	StandardAero, Inc.	28.74	3.16	12.35%

VSE Corporate Events

Dividends

VSE Declares Regular Quarterly Cash Dividend for Shareholders

Positive

Nov 4, 2026

On November 3, 2026, VSE said its Board of Directors had declared a regular quarterly cash dividend of $0.10 per common share. The dividend was scheduled to be paid on January 29, 2027, to stockholders of record at the close of business on January 15...

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.

Date of analysis: Nov 09, 2026

VSE AI Stock Analysis