AAR (AIR) AI Stock Analysis

• Market Cap: $3.34B
• Dividend Yield: N/A
• Average Volume (3M): 329.18K
• Price to Earnings (P/E): 105.6
• Beta (1Y): 1.07
• Revenue Growth: 17.59%
• EPS Growth: -56.15%
• Country: US
• Employees: 5,700
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 1.08
• Shares Outstanding: 39,562,492
• 10 Day Avg. Volume: 294,738
• 30 Day Avg. Volume: 329,179
• PEG Ratio: -2.39
• Price to Book (P/B): 1.80
• Price to Sales (P/S): 0.79
• P/FCF Ratio: 1.56K
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 6.84
• Enterprise Value/Ebitda: 19.46
• 1Y Price Target: $91.50
• Price Target Upside: 9.35% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: $87.00 ▲(3.97% Upside)

AAR Corp's overall stock score reflects a balanced view of its financial performance, technical indicators, and strategic initiatives. The company's strong earnings call and positive corporate events are significant strengths, indicating potential for future growth. However, high valuation metrics and challenges in profitability and cash flow management present risks that temper the overall score.

Positive Factors

Revenue Growth

Strong revenue growth indicates effective market strategies and product demand, supporting long-term business expansion and stability.

Strategic Acquisitions

Strategic acquisitions and expansions enhance AAR's service offerings and operational capacity, positioning it for future growth.

Distribution Agreements

Extending distribution agreements strengthens AAR's market position and ensures steady revenue from established partnerships.

Negative Factors

Profitability Challenges

Low net profit margins indicate challenges in converting revenue growth into profits, potentially impacting long-term financial health.

Cash Flow Management

Negative cash flow growth suggests difficulties in cash generation, which could constrain future investments and operational flexibility.

Increased Net Debt Leverage

Rising debt leverage can limit financial flexibility and increase risk, affecting AAR's ability to finance future growth initiatives.

AAR Business Overview & Revenue Model

Company Description

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Aviation Services segment offers aftermarket support and services; inventory management and distribution services; and maintenance, repair, and overhaul, as well as engineering services. This segment also sells and leases new, overhauled, and repaired engine and airframe parts, and components; and provides inventory and repair programs, warranty claim management, and outsourcing programs for engine and airframe parts and components, as well as performance-based supply chain logistics programs in support of the U.S. department of defense and foreign governments. In addition, it offers airframe inspection, maintenance, repair and overhaul, painting, line maintenance, airframe modification, structural repair, avionic and installation, exterior and interior refurbishment, and engineering and support services; and repairs and overhauls components, landing gears, wheels, and brakes. The Expeditionary Services segment provides products and services supporting the movement of equipment and personnel by the U.S. and foreign governments, and non-governmental organizations. This segment also designs, manufactures, and repairs transportation pallets, and various containers and shelters; and provides engineering, design, and system integration services for command and control systems. The company serves domestic and foreign passenger airlines; domestic and foreign cargo airlines; regional and commuter airlines; business and general aviation operators; original equipment manufacturers; aircraft leasing companies; aftermarket aviation support companies; and domestic and foreign military customers. It primarily markets and sells products and services through its employees and foreign sales representatives. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois.

How the Company Makes Money

AAR generates revenue through multiple key streams including aircraft maintenance services, which encompass repair, overhaul, and modification of aircraft for commercial airlines and military operators. Additionally, the company profits from its supply chain management services, which offer logistics and inventory management solutions to clients. AAR's sales of spare parts and components also contribute significantly to its revenue, with contracts established with various airlines and military branches. Strategic partnerships with major defense contractors and government agencies enhance its revenue potential, as does its ability to secure long-term contracts with customers in both the civilian and military sectors.

AAR Financial Statement Overview

Summary

AAR shows strong revenue growth and improved gross margins, but profitability remains a challenge with low net profit margins. The balance sheet is healthier with a better debt position, though returns on equity are modest. Cash flow management needs improvement, with negative free cash flow growth posing a risk.

Income Statement

AAR has shown consistent revenue growth with a TTM revenue increase of 2.8%. Gross profit margin improved to 25.68% TTM, indicating better cost management. However, the net profit margin remains low at 1.36% TTM, suggesting challenges in translating revenue growth into net income. The EBIT margin of 3.33% TTM is modest, reflecting operational efficiency but also highlighting room for improvement in profitability.

Balance Sheet

The company's debt-to-equity ratio has improved significantly, reaching 0.88 in the latest annual report, indicating a more balanced capital structure. Return on equity (ROE) is low at 3.23% TTM, suggesting limited returns for shareholders. The equity ratio is stable, reflecting a solid asset base supported by equity.

Cash Flow

AAR's cash flow performance is mixed, with a negative free cash flow growth rate of -107.25% TTM, indicating cash flow challenges. The operating cash flow to net income ratio is low, suggesting limited cash generation relative to net income. However, the free cash flow to net income ratio of 0.94 TTM indicates some ability to convert earnings into free cash flow.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.86B	2.78B	2.32B	1.99B	1.82B	1.65B
Gross Profit	544.20M	527.70M	442.30M	370.10M	313.20M	275.90M
EBITDA	191.40M	169.50M	142.70M	161.30M	144.20M	73.10M
Net Income	28.90M	12.50M	46.30M	90.20M	78.70M	35.80M
Balance Sheet
Total Assets	2.93B	2.84B	2.77B	1.83B	1.57B	1.54B
Cash, Cash Equivalents and Short-Term Investments	80.00M	96.50M	85.80M	68.40M	53.50M	51.80M
Total Debt	1.10B	1.06B	1.07B	317.90M	156.30M	193.60M
Total Liabilities	1.68B	1.63B	1.58B	734.00M	539.40M	565.30M
Stockholders Equity	1.25B	1.21B	1.19B	1.10B	1.03B	974.40M
Cash Flow
Free Cash Flow	-2.00M	1.40M	13.90M	-6.20M	57.90M	93.90M
Operating Cash Flow	9.80M	36.10M	43.60M	23.30M	75.20M	105.20M
Investing Cash Flow	-7.80M	10.70M	-758.50M	-138.00M	-16.50M	-500.00K
Financing Cash Flow	26.50M	-33.70M	729.20M	137.70M	-59.80M	-469.50M

AAR Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 83.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 83.68 is above the 20-day moving average (MA) of 81.25, above the 50-day MA of 82.46, and above the 200-day MA of 71.64, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 54.56 is Neutral, neither overbought nor oversold. The STOCH value of 75.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIR.

AAR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VSEC	67 Neutral	$4.07B	134.12	5.28%	0.23%	9.22%	65.05%
AIR	65 Neutral	$3.34B	105.58	2.35%	―	17.59%	-56.15%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TGI	58 Neutral	―	―	―	―	-4.74%	―
DCO	58 Neutral	$1.42B	―	-5.27%	―	3.16%	-213.56%
MRCY	57 Neutral	$4.60B	―	-2.24%	―	8.63%	72.72%
SPR	51 Neutral	$4.23B	-1.63	―	―	-1.31%	-78.19%

AAR Corporate Events

AAR Appoints Sarah Flanagan as Interim CFO

On December 1, 2025, Sean M. Gillen announced his resignation as AAR‘s Chief Financial Officer, effective December 11, 2025, to pursue a career opportunity outside the aviation industry. His departure was not due to any disagreements with the company. Subsequently, on December 4, 2025, AAR appointed Sarah L. Flanagan, the company’s Vice President of Financial Operations since 2017, as the Interim Chief Financial Officer. Flanagan, who has been with AAR since 2012, brings extensive experience from her previous roles at Honeywell International and PricewaterhouseCoopers. Her appointment is expected to ensure a smooth transition and continued financial leadership for AAR.

AAR Highlights Strategic Focus at Baird Conference

On November 13, 2025, AAR CORP. participated in the Baird Global Industrial Conference in Chicago and shared an investor presentation on its website. The presentation highlighted AAR’s strategic focus on high-growth and high-margin segments within the aviation aftermarket, emphasizing its repositioning efforts, strategic acquisitions, and enhanced intellectual property profile. This move aims to strengthen AAR’s market position and drive future growth and margin expansion.

AAR Corp Acquires HAECO Americas for $80 Million

On November 3, 2025, AAR CORP. announced the acquisition of HAECO Americas, a major provider of heavy aircraft maintenance, repair, and overhaul services, for $80 million in cash. This acquisition, funded through AAR’s existing revolving credit facility, significantly expands AAR’s maintenance footprint and accelerates its strategic objective to grow its Repair & Engineering segment. The acquisition includes securing multi-year contracts worth over $850 million with key customers, enhancing AAR’s leadership in the North American MRO market. AAR plans to integrate HAECO Americas’ operations, expecting to improve profitability and operational performance through synergy realization and footprint optimization.

AAR Completes $274 Million Public Offering

On October 2, 2025, AAR CORP. successfully completed a public offering of 3,450,000 shares of its common stock, raising approximately $274 million. The proceeds will be used to repay outstanding borrowings and for general corporate purposes, including potential future acquisitions. This move is expected to strengthen AAR’s financial position and support its strategic growth initiatives, potentially impacting its market standing positively.

AAR Corp Acquires American Distributors for $146 Million

On September 25, 2025, AAR CORP. announced the acquisition of American Distributors Holding Co., LLC (ADI) for $146 million in cash. This acquisition, funded through AAR’s existing revolving credit facility, aims to expand AAR’s new parts Distribution activity by integrating ADI’s complementary electronics product lines and extensive OEM relationships into its Parts Supply segment. The acquisition is expected to enhance AAR’s market share and product offerings, leveraging ADI’s established presence in the aerospace and defense markets. AAR anticipates improved margins through sales growth and operational efficiency, positioning the company for continued future growth.

AAR Corp. Holds Annual Stockholders Meeting

On September 16, 2025, AAR CORP. held its annual meeting of stockholders, where approximately 93% of the shares were represented. During the meeting, stockholders elected three Class II directors for a term expiring in 2028, approved the executive compensation for fiscal 2025, and ratified the appointment of KPMG LLP as the independent registered public accounting firm for the fiscal year ending May 31, 2026.