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AAR
(NYSE:AIR)
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Rating:64Neutral
Price Target:
$153.00
▲(18.56% Upside)
Action:Reiterated
Date:07/24/26
The score is driven primarily by improving financial performance and a constructive earnings outlook, including raised guidance and continued growth catalysts, but is held back by weak/volatile cash conversion and a valuation that offers limited cushion. Technicals are mixed, with near-term softness versus the 20-day trend despite strength over longer moving averages.
Positive Factors
Broad-based revenue growth & raised guidance
Management's upward revision to roughly 19% total sales growth and ~12% organic reflects durable multi‑segment demand and improved execution. Raised guidance increases revenue visibility, supports capacity investments and margin planning, and underpins multi‑year growth expectations across parts, government and MRO.
Negative Factors
Weak and volatile cash conversion
Despite improving absolute cash flows, low cash conversion versus net income and historical swings indicate working‑capital sensitivity. This limits internal funding capacity, raises the need for external financing during investment cycles, and makes earnings less resilient to cyclical shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Broad-based revenue growth & raised guidance
Management's upward revision to roughly 19% total sales growth and ~12% organic reflects durable multi‑segment demand and improved execution. Raised guidance increases revenue visibility, supports capacity investments and margin planning, and underpins multi‑year growth expectations across parts, government and MRO.
Read all positive factors
AAR (AIR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.86B
Dividend YieldN/A
Average Volume (3M)525.98K
Price to Earnings (P/E)30.4
Beta (1Y)1.08
Revenue Growth18.97%
EPS Growth1317.49%
CountryUS
Employees7,100
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)4.88
Shares Outstanding40,258,840
10 Day Avg. Volume587,216
30 Day Avg. Volume525,982
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)2.47
Price to Sales (P/S)1.27
P/FCF Ratio126.51
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
$196.29Price Target Upside52.10% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)5.72
Revenue Forecast (FY)$3.65B
AAR Business Overview & Revenue Model
Company Description
AAR Corp. delivers a wide array of products and services to the global commercial aviation, government, and defense sectors. Its Aviation Services division focuses on comprehensive aftermarket support, encompassing inventory management, distributi...
How the Company Makes Money
AAR primarily makes money by selling aviation services and aviation parts/supply-chain solutions to airlines, defense customers, and government agencies. A key revenue stream comes from maintenance, repair and overhaul (MRO) work, where AAR is pai...
AAR Earnings Call Summary
Earnings Call Date:Jul 21, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Sep 29, 2026
Earnings Call Sentiment Positive
The call presented strong top-line growth, record quarterly and annual revenue, substantial increases in adjusted EBITDA and EPS, meaningful commercial distribution and software momentum, successful M&A and improving leverage and cash generation. Near-term margin pressure stemmed from acquisition integration (HAECO), a prior-year one-time gain comparison in used parts, USM margin compression, and reduced activity on a legacy government program (WASS). Management provided constructive FY27 guidance (ex-legacy) and clear plans to realize integration synergies and software scaling. Overall, the positives (broad revenue and profit growth, strategic wins, improving leverage and software upside) materially outweigh the near-term operational and integration headwinds.Positive Updates
Quarterly Revenue and Organic Growth
Total Q4 sales were a record $928 million, up 26% year-over-year, including 13% organic adjusted sales growth; commercial sales up 31% and government sales up 5%; commercial comprised 73% of Q4 sales.
Negative Updates
Margin Pressure from One-Time and Acquisition Effects
Parts supply adjusted EBITDA margin declined by ~250 basis points versus prior year due largely to a $6.5 million one-time gain in used parts in the prior-year quarter; HAECO Americas integration was slightly dilutive to near-term margins (impact fell from ~70 bps to ~40 bps quarter-over-quarter).
Read all updates
Q4-2026 Updates
Positive
Negative
Quarterly Revenue and Organic Growth
Total Q4 sales were a record $928 million, up 26% year-over-year, including 13% organic adjusted sales growth; commercial sales up 31% and government sales up 5%; commercial comprised 73% of Q4 sales.
Read all positive updates
Company Guidance
AAR guided Q1 FY‑2027 total sales growth (excluding the legacy commercial programs segment) of 21%–23% and Q1 adjusted EBITDA margin (ex‑legacy commercial programs) of 12.25%–12.75%; for full‑year FY‑2027 they expect total sales (ex‑legacy commercial programs) to increase in the low double‑digits to low teens, noted the legacy commercial programs business should wind down ratably over the next 3–4 years, and said the HAECO Americas acquisition should reach margins consistent with other airframe MRO sites in 2H FY‑2027 — all while supporting the multi‑year revenue growth targets discussed at Investor Day and continuing to push operating cash conversion toward a long‑term target of 30%+ of adjusted EBITDA.AAR Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
55
Neutral
| Breakdown | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.31B | 2.78B | 2.32B | 1.99B | 1.82B |
| Gross Profit | 622.00M | 527.70M | 442.30M | 370.10M | 313.20M |
| EBITDA | 345.90M | 169.50M | 142.70M | 161.30M | 144.20M |
| Net Income | 187.70M | 12.50M | 46.30M | 90.20M | 78.70M |
Balance Sheet | |||||
| Total Assets | 3.36B | 2.84B | 2.77B | 1.83B | 1.57B |
| Cash, Cash Equivalents and Short-Term Investments | 84.00M | 96.50M | 85.80M | 68.40M | 53.50M |
| Total Debt | 995.00M | 1.05B | 1.07B | 317.90M | 156.30M |
| Total Liabilities | 1.65B | 1.63B | 1.58B | 734.00M | 539.40M |
| Stockholders Equity | 1.70B | 1.21B | 1.19B | 1.10B | 1.03B |
Cash Flow | |||||
| Free Cash Flow | 33.30M | 1.40M | 13.90M | -6.20M | 57.90M |
| Operating Cash Flow | 98.70M | 36.10M | 43.60M | 23.30M | 75.20M |
| Investing Cash Flow | -308.70M | 10.70M | -758.50M | -138.00M | -16.50M |
| Financing Cash Flow | 208.60M | -33.70M | 729.20M | 137.70M | -59.80M |
AAR Technical Analysis
Positive
129.05
Price Trends
134.32
Positive
123.42
Positive
109.64
Positive
Market Momentum
3.64
Negative
60.94
Neutral
55.49
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 129.05 is below the 20-day moving average (MA) of 139.49, below the 50-day MA of 134.32, and above the 200-day MA of 109.64, indicating a bullish trend. The MACD of 3.64 indicates Negative momentum. The RSI at 60.94 is Neutral, neither overbought nor oversold. The STOCH value of 55.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIR.
AAR Risk Analysis
AAR disclosed 24 risk factors in its most recent earnings report. AAR 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
AAR Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $42.64B | 65.92 | 17.82% | 0.04% | 18.80% | 30.84% | |
72 Outperform | $5.48B | 27.13 | 4.44% | ― | 11.44% | 291.35% | |
67 Neutral | $6.79B | 88.22 | 3.73% | 0.20% | 23.35% | 56.45% | |
66 Neutral | $9.33B | 27.67 | 12.12% | ― | 12.56% | 144.85% | |
64 Neutral | $5.86B | 30.36 | 12.19% | ― | 18.97% | 1317.49% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $2.98B | -111.27 | -3.69% | ― | 8.57% | -162.23% |
* Industrials Sector Average
AIR
AAR
148.16
69.48
88.31%
DCO
Ducommun
201.39
109.03
118.05%
HEI
HEICO
373.10
60.40
19.32%
VSEC
VSE
242.60
78.32
47.67%
AMTM
Amentum Holdings, Inc.
22.52
-4.01
-15.11%
SARO
StandardAero, Inc.
27.39
-0.77
-2.73%
AAR Corporate Events
Business Operations and StrategyExecutive/Board Changes
AAR Approves Special Long-Term Incentive Grant
Positive
Jul 24, 2026
On July 23, 2026, AAR’s Human Capital and Compensation Committee approved a special long-term performance incentive grant of 161,500 shares of performance-based restricted stock to Chairman and CEO John M. Holmes, with a targeted grant date ...
Business Operations and StrategyFinancial Disclosures
AAR Unveils New Segment Structure at Investor Day
Neutral
May 12, 2026
On May 12, 2026, AAR CORP. hosted an in‑person Investor Day in New York City, complemented by a public webcast, where senior leaders outlined strategic priorities, growth initiatives, and financial objectives for the business. The company al...
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.