AAR (AIR) AI Stock Analysis

• Market Cap: $2.73B
• Dividend Yield: N/A
• Average Volume (3M): 429.65K
• Price to Earnings (P/E): 226.8
• Beta (1Y): 1.02
• Revenue Growth: 19.91%
• EPS Growth: -73.61%
• Country: US
• Employees: 5,700
• Sector: Industrials
• Sector Strength: 86
• Industry: Aerospace & Defense
• EPS (TTM): 1.16
• Shares Outstanding: 35,847,588
• 10 Day Avg. Volume: 672,208
• 30 Day Avg. Volume: 429,652
• PEG Ratio: 0.07
• Price to Book (P/B): 2.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 103.35
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 0.36
• Enterprise Value/Gross Profit: 7.21
• Enterprise Value/Ebitda: 5.47
• 1Y Price Target: $83.75
• Price Target Upside: 10.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 79 Outperform
• Price Target: $96.00 ▲(26.62%Upside)

AAR's overall stock score reflects strong financial performance and positive earnings call sentiment as the most significant factors. The technical analysis indicates positive momentum but with caution due to overbought conditions. Valuation remains a concern with a high P/E ratio, offset by strong corporate events, suggesting a balanced outlook with potential for growth.

Positive Factors

Financial Performance

AAR shares are trading over 3% higher after the company reported 14% normalized organic growth in its fiscal fourth quarter, an acceleration from 6% in the previous quarter.

Revenue Growth

The company expects revenue to double again, driven by upgrading customers to the recurring SaaS platform and implementing a parts marketplace with third-party OEMs.

Strategic Partnerships

Today, management announced that Trax has a new partnership with Virgin Atlantic and has also announced partnerships in the past with Singapore Airlines, Cathay Pacific, and WestJet, among others.

Negative Factors

Customer Issues

A customer engine induction pushout led to a sell-off, related to high demand as the customer needed to hold onto the engine.

Tax Implications

Adjusted EPS for 4Q25 was reduced due to a higher expected tax rate because of the impairment associated with the Landing Gear divestiture.

Top-line Performance

The top-line was below expectations due to engine induction timing from one customer, noted as an idiosyncratic issue.

AAR Business Overview & Revenue Model

Company Description

AAR Corp (AIR) is a global provider of aviation services to commercial and government customers. It operates through various segments, including Aviation Services and Expeditionary Services, offering a comprehensive range of products such as aircraft maintenance, repair and overhaul (MRO), inventory management, and supply chain solutions. AAR is known for its expertise in aviation logistics and its capability to deliver integrated solutions that enhance the operational efficiency and readiness of its clients.

How the Company Makes Money

AAR Corp generates revenue primarily through its Aviation Services segment, which includes providing maintenance, repair and overhaul (MRO) services for various aircraft components and systems. The company also earns income from inventory management and supply chain solutions, where it manages and supplies parts and equipment for commercial airlines, defense agencies, and other aviation customers. Additionally, AAR has strategic partnerships with key industry players and government contracts that significantly contribute to its revenue streams. These partnerships and contracts enable AAR to offer a wide array of services and solutions that cater to the specific needs of its diverse client base, thereby ensuring steady revenue growth.

AAR Financial Statement Overview

Summary

AAR demonstrates robust growth and operational efficiency with excellent revenue growth and improving cash flow. While profitability margins are moderate, indicating room for improvement, the balance sheet reflects a stable financial position, albeit with debt levels that require careful management.

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	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	2.78B	2.32B	1.99B	1.82B	1.65B
Gross Profit	527.70M	442.30M	370.10M	313.20M	275.90M
EBITDA	112.50M	142.70M	161.30M	144.20M	73.10M
Net Income	12.50M	46.30M	90.20M	78.70M	35.80M
Balance Sheet
Total Assets	2.84B	2.77B	1.83B	1.57B	1.54B
Cash, Cash Equivalents and Short-Term Investments	96.50M	85.80M	68.40M	53.50M	51.80M
Total Debt	1.05B	1.07B	317.90M	156.30M	193.60M
Total Liabilities	1.63B	1.58B	734.00M	539.40M	565.30M
Stockholders Equity	1.21B	1.19B	1.10B	1.03B	974.40M
Cash Flow
Free Cash Flow	36.10M	13.90M	-6.20M	57.90M	93.90M
Operating Cash Flow	36.10M	43.60M	23.30M	75.20M	105.20M
Investing Cash Flow	10.70M	-758.50M	-138.00M	-16.50M	-500.00K
Financing Cash Flow	-33.70M	729.20M	137.70M	-59.80M	-469.50M

AAR Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 75.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIR, the sentiment is Neutral. The current price of 75.82 is below the 20-day moving average (MA) of 76.23, above the 50-day MA of 70.02, and above the 200-day MA of 64.80, indicating a neutral trend. The MACD of 1.93 indicates Positive momentum. The RSI at 50.88 is Neutral, neither overbought nor oversold. The STOCH value of 8.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AIR.

AAR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AIR	79 Outperform	$2.73B	226.80	1.02%	―	19.91%	-73.61%
DCO	75 Outperform	$1.35B	39.24	5.25%	―	3.02%	95.76%
VSEC	68 Neutral	$2.93B	179.09	6.22%	0.26%	19.84%	-51.67%
Sector *	65 Neutral	$10.84B	16.29	5.52%	2.09%	3.14%	-29.96%
SPR	60 Neutral	$4.62B	―	81.63%	―	-2.91%	-109.95%
MRCY	58 Neutral	$3.10B	―	-4.45%	―	5.66%	52.71%

AAR Corporate Events

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.

The most recent analyst rating on (AIR) stock is a Buy with a $85.00 price target. To see the full list of analyst forecasts on AAR stock, see the AIR Stock Forecast page.

AAR Corp Reports Strong Q3 FY25 Financial Performance

During the fourth quarter of fiscal 2025, AAR CORP. management will present at multiple investor meetings, showcasing their continued growth and strategic initiatives. The company has reported significant financial performance with a 21% increase in sales and a 13.4% adjusted EBITDA margin for Q3 FY25. AAR CORP. highlights include the near completion of the Product Support acquisition integration, ongoing hangar expansions, and strong momentum in their Trax software business, indicating robust growth and opportunities for cost savings, particularly for the U.S. Government.