AAR (AIR) AI Stock Analysis

• Market Cap: $4.64B
• Dividend Yield: N/A
• Average Volume (3M): 360.78K
• Price to Earnings (P/E): 45.6
• Beta (1Y): 1.12
• Revenue Growth: 17.59%
• EPS Growth: -56.15%
• Country: US
• Employees: 5,700
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 1.18
• Shares Outstanding: 39,572,510
• 10 Day Avg. Volume: 283,207
• 30 Day Avg. Volume: 360,781
• 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: 1.23
• Enterprise Value/Revenue: 1.92
• Enterprise Value/Gross Profit: 9.97
• Enterprise Value/Ebitda: 21.60
• 1Y Price Target: $113.80
• Price Target Upside: -4.98% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 4.72
• Revenue Forecast (FY): $3.21B

• Rating: 59 Neutral
• Price Target: $119.00 ▼(-0.64% Downside)
• Action: Reiterated Date: 02/12/26
• Date: Action: Reiterated 02/12/26

The score is held back primarily by weak cash conversion (near-breakeven operating cash flow and negative free cash flow) and a more leveraged/low-ROE financial profile, despite steady revenue growth. Offsetting this, technicals show a strong uptrend and the latest earnings call provided upbeat growth and margin guidance with expectations for near-term cash positivity. Valuation remains a meaningful constraint with a high P/E and no stated dividend yield support.

Positive Factors

Multi-year revenue expansion and diversified services

Sustained topline expansion across years demonstrates underlying demand for AAR’s MRO, supply-chain and defense offerings. Durable revenue growth from multiple service lines reduces dependence on any single end-market and supports long-term scale benefits and contract visibility.

Parts distribution growth and improving parts margins

High-growth parts distribution is a structural shift toward recurring, higher-margin aftermarket sales. Improving adjusted EBITDA margins in Parts Supply indicate better mix and scale economics, which should drive steadier cash generation and resilience versus cyclical heavy maintenance revenue.

Leverage trending toward target and disciplined capital allocation

Improving leverage within stated targets enhances financial flexibility and lowers refinancing risk. Combined with a disciplined M&A focus and organic growth priority, this supports sustainable investment in high-return areas and reduces probability of forced deleveraging harming operations.

Negative Factors

Weak cash generation and negative free cash flow

Near-zero operating cash flow and negative FCF undermine earnings quality and limit capacity to fund growth or pay down debt without external financing. Persistent weak cash conversion raises working-capital and liquidity risks and constrains capital allocation flexibility over the medium term.

Higher leverage and low return on equity

Materially higher leverage versus prior years with modest ROE reduces balance-sheet resilience and investor return potential. Elevated debt increases fixed costs and interest exposure, while low ROE signals muted profitability on shareholders’ capital, limiting long-term value creation.

Integration and execution risk from HAECO and footprint changes

Large, margin-dilutive integrations and facility exits create execution strain and near-term cost volatility. Multi-site reallocation, one-time charges and bandwidth limits on simultaneous M&A raise risk that anticipated synergies and margin recovery take longer or cost more than projected.

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

Income statement is decent (revenue up 3.8% TTM) but profitability is pressured with a very thin net margin (~1.0%). Balance sheet leverage has risen (debt-to-equity ~0.88) and ROE is modest (~2.4%). Cash generation is the key drag: operating cash flow is near breakeven and free cash flow is negative (-$15.8M), weakening earnings quality.

Income Statement

TTM (Trailing-Twelve-Months) revenue grew 3.8%, extending a multi-year expansion from 2021–2025, but the growth rate has clearly cooled versus the prior years. Profitability is mixed: gross margin is steady near ~19%, and EBIT margin is moderate (~4.8%), yet net margin is very thin (~1.0%) and well below earlier years, indicating higher below-the-line costs and/or margin pressure. Net income improved versus FY2025, but earnings quality remains a key watch item given the low net margin.

Balance Sheet

Leverage has stepped up materially: debt-to-equity moved from low levels in 2021–2022 to ~0.88 in FY2024–TTM, reducing balance-sheet flexibility. Equity has grown (supporting a larger asset base), but returns are currently modest, with return on equity ~2.4% in TTM (and ~1.0% in FY2025), well below 2022–2023 levels. Overall, the balance sheet is serviceable, but the higher debt load and weaker returns temper the profile.

Cash Flow

TTM (Trailing-Twelve-Months) cash generation is weak: operating cash flow is near breakeven ($1.4M) and free cash flow is negative (-$15.8M), a sharp deterioration from positive free cash flow in FY2024–FY2025. Cash flow is not currently supporting reported earnings (free cash flow is negative relative to net income), which raises concerns about working-capital needs and the sustainability of profitability until conversion improves.

Breakdown	TTM	May 2025	May 2024	May 2023	May 2022	May 2021
Income Statement
Total Revenue	2.97B	2.78B	2.32B	1.99B	1.82B	1.65B
Gross Profit	572.50M	527.70M	442.30M	370.10M	313.20M	275.90M
EBITDA	264.30M	169.50M	142.70M	161.30M	144.20M	73.10M
Net Income	94.10M	12.50M	46.30M	90.20M	78.70M	35.80M
Balance Sheet
Total Assets	3.24B	2.84B	2.77B	1.83B	1.57B	1.54B
Cash, Cash Equivalents and Short-Term Investments	75.60M	96.50M	85.80M	68.40M	53.50M	51.80M
Total Debt	1.04B	1.05B	1.07B	317.90M	156.30M	193.60M
Total Liabilities	1.68B	1.63B	1.58B	734.00M	539.40M	565.30M
Stockholders Equity	1.56B	1.21B	1.19B	1.10B	1.03B	974.40M
Cash Flow
Free Cash Flow	-33.20M	1.40M	13.90M	-6.20M	57.90M	93.90M
Operating Cash Flow	1.40M	36.10M	43.60M	23.30M	75.20M	105.20M
Investing Cash Flow	-213.20M	10.70M	-758.50M	-138.00M	-16.50M	-500.00K
Financing Cash Flow	225.50M	-33.70M	729.20M	137.70M	-59.80M	-469.50M

AAR Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 119.77
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 119.77 is above the 20-day moving average (MA) of 113.31, above the 50-day MA of 101.69, and above the 200-day MA of 82.38, indicating a bullish trend. The MACD of 4.40 indicates Positive momentum. The RSI at 68.55 is Neutral, neither overbought nor oversold. The STOCH value of 76.64 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	64 Neutral	$6.21B	192.60	4.41%	0.22%	9.22%	65.05%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AIR	59 Neutral	$4.64B	45.59	6.86%	―	17.59%	-56.15%
DCO	59 Neutral	$1.95B	-56.59	-5.05%	―	3.16%	-213.56%
MRCY	55 Neutral	$5.46B	-176.10	-2.08%	―	8.63%	72.72%

AAR Corporate Events

AAR Names Dylan Wolin Chief Financial Officer

On February 9, 2026, AAR CORP. appointed Dylan Wolin as Senior Vice President and Chief Financial Officer, effective February 23, 2026, giving him oversight of finance, accounting, tax, treasury, investor relations, and corporate development. Interim CFO Sarah L. Flanagan will step down from the interim role on that date and return to her position as Vice President, Financial Operations.

Wolin, who previously led AAR’s strategic and corporate development, treasury, and investor relations functions from 2017 to 2024 and helped drive key acquisitions, rejoined the company from Federal Signal Corporation, where he headed several specialty vehicle businesses from 2024 to 2026. His compensation package includes a prorated $500,000 base salary for fiscal 2026, a $300,000 sign-on bonus subject to repayment conditions, participation in the short-term incentive plan with significant bonus opportunities, and time-based restricted stock awards replacing foregone equity from his prior employer.

AAR described Wolin as instrumental in shaping the strategy it is currently executing and highlighted his additional operational and strategic experience from roles at Federal Signal, Boeing, and major investment banks. The company reaffirmed its previously issued guidance for its third fiscal quarter and full fiscal year, signaling continuity in its financial outlook as it transitions its finance leadership and maintains focus on executing its growth strategy.

The most recent analyst rating on (AIR) stock is a Hold with a $125.00 price target. To see the full list of analyst forecasts on AAR stock, see the AIR Stock Forecast page.

AAR Announces Acquisition of Aircraft Reconfig Technologies

On December 17, 2025, AAR CORP., through its subsidiary AAR Aircraft Services, announced a definitive agreement to acquire Aircraft Reconfig Technologies LLC, a leading company in aircraft interiors engineering, for $35 million in cash. The acquisition, expected to close in the fourth quarter of Fiscal Year 2026, will expand AAR’s engineering and certification capabilities, enhance its offerings in its Repair & Engineering division, and accelerate growth through proprietary solutions, solidifying its position as North America’s leading independent MRO provider.

The most recent analyst rating on (AIR) stock is a Buy with a $100.00 price target. To see the full list of analyst forecasts on AAR stock, see the AIR Stock Forecast page.

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.

The most recent analyst rating on (AIR) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on AAR stock, see the AIR Stock Forecast page.

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.

The most recent analyst rating on (AIR) stock is a Buy with a $93.00 price target. To see the full list of analyst forecasts on AAR stock, see the AIR Stock Forecast page.