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Loar Holdings Inc. (LOAR)
NYSE:LOAR
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Loar Holdings Inc.
(NYSE:LOAR)
54Neutral
Positive Factors
Earnings Performance
LOAR reported adjusted EPS of $0.15, exceeding consensus estimates by 17%.
Revenue Growth
LOAR reported Q3 organic growth of 16.5%, supporting a strong outlook despite strike impacts.
Sales Outlook
The 2025 sales outlook is projected to be between $470 million and $480 million, above the consensus of $465 million.
Negative Factors
Interest Expense Impact
LOAR lowered its adjusted EPS outlook due to the impact of higher interest expense from its recent acquisition.
Stock Performance
The stock was down ~8.1% compared to the largely flat S&P 500 following the 3Q24 earnings report.
Loar Holdings Inc. (LOAR) vs. S&P 500 (SPY)
Market Cap
$6.17B
Dividend YieldN/A
Average Volume (3M)454.63K
Price to Earnings (P/E)329.5
Beta (1Y)1.78
Revenue Growth26.14%
EPS GrowthN/A
CountryUS
Employees1,300
SectorGeneral
Sector StrengthN/A
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.20
Shares Outstanding93,556,070
10 Day Avg. Volume506,909
30 Day Avg. Volume454,625
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)15.39
Price to Cash Flow (P/CF)89.10
P/FCF Ratio68.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$98.50Price Target Upside49.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Loar Holdings Inc. Business Overview & Revenue Model
Company DescriptionLoar Holdings, Inc. engages in the design, manufacture, and sale of niche aerospace and defense components for aircraft, aerospace and defense systems. The company was founded on August 21, 2017 and is headquartered in White Plains, NY.
How the Company Makes MoneyLoar Holdings Inc. generates revenue through a combination of business operations and strategic investments. The company earns money primarily from the manufacturing and sale of aerospace and defense components, industrial products, and technology solutions. Key revenue streams include contracts with government and commercial clients in the aerospace and defense sectors, as well as sales agreements with industrial and technology companies. Significant partnerships with key industry players and ongoing strategic acquisitions also contribute to the company's earnings by expanding its market presence and operational capabilities.
Loar Holdings Inc. Financial Statement Overview
Summary
Loar Holdings Inc. demonstrates strong revenue growth and gross margins but is hindered by negative profitability and declining free cash flow. The balance sheet shows moderate leverage, requiring operational improvements to boost returns and stabilize cash flow.Income Statement
Loar Holdings Inc. shows a strong gross profit margin at 48.6% TTM, indicating efficient production. However, the company is struggling with profitability, evidenced by a negative net profit margin of -1.5% TTM. Revenue growth is impressive at 32.6%, signaling strong demand or market expansion, but the negative net income highlights underlying challenges in cost management or operations.55
Neutral
Balance Sheet
The debt-to-equity ratio is 1.30, suggesting a moderate reliance on debt, typical in the capital-intensive aerospace industry. Stockholders' equity forms 39.8% of total assets, reflecting a solid equity base. However, the return on equity is negative due to net losses, indicating inefficiencies in generating returns for shareholders.60
Neutral
Cash Flow
Loar Holdings Inc. has a declining free cash flow growth rate of -87.3%, which raises concerns over cash generation capabilities. The operating cash flow to net income ratio is positive, indicating better cash generation relative to accounting profits, but free cash flow to net income is low, reflecting capital expenditure pressures.50
Neutral
| Breakdown | ||
| TTM | Dec 2023 | Dec 2022 |
|---|---|---|
| Income Statement | Total Revenue | |
| 378.81M | 317.48M | 239.43M | Gross Profit |
| 184.99M | 154.26M | 111.50M | EBIT |
| 85.29M | 69.49M | 39.46M | EBITDA |
| 126.14M | 107.52M | 81.69M | Net Income Common Stockholders |
| 17.97M | -4.62M | -2.47M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 35.50M | 21.49M | 35.50M | Total Assets |
| 994.52M | 1.05B | 994.52M | Total Debt |
| 496.44M | 545.48M | 496.44M | Net Debt |
| 460.95M | 523.99M | 460.95M | Total Liabilities |
| 572.55M | 632.30M | 572.55M | Stockholders Equity |
| 421.97M | 418.14M | 421.97M |
| Cash Flow | Free Cash Flow | |
| 34.19M | 679.00K | 5.34M | Operating Cash Flow |
| 44.58M | 12.81M | 13.27M | Investing Cash Flow |
| -393.75M | -72.56M | -181.83M | Financing Cash Flow |
| 388.39M | 45.72M | 135.31M |
Loar Holdings Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $32.22B | 65.82 | 16.18% | 0.08% | 23.06% | 32.43% | |
75 Outperform | $11.93B | 30.02 | 16.95% | 0.26% | 9.69% | 14.65% | |
68 Neutral | $77.24B | 48.59 | -29.16% | ― | 16.89% | 20.33% | |
65 Neutral | $4.53B | 35.38 | 8.14% | 1.10% | 6.31% | 28.25% | |
54 Neutral | $4.19B | -19.07 | -13.11% | 5.82% | 26.00% | -79.79% | |
54 Neutral | $6.17B | 329.52 | -1.10% | ― | 26.14% | ― | |
35 Underperform | $4.07B | ― | 81.63% | ― | 4.44% | -202.63% |
* General Sector Average
Performance Comparison
LOAR
Loar Holdings Inc.
65.97
16.26
32.71%
CW
Curtiss-Wright
316.80
60.54
23.62%
HEI
HEICO
267.19
79.11
42.06%
HXL
Hexcel
56.31
-14.78
-20.79%
SPR
Spirit AeroSystems
34.72
-0.72
-2.03%
TDG
Transdigm Group
1,377.20
227.42
19.78%
Loar Holdings Inc. Earnings Call Summary
Earnings Call Date: Mar 31, 2025 | % Change Since: -25.13% | Next Earnings Date: May 20, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in sales and profitability for Loar Holdings, driven by strong performance in the commercial and defense sectors. Despite some challenges such as increased interest expenses and supply chain issues affecting the OEM segment, the company's positive outlook for 2025 and strategic acquisitions underscore a strong growth trajectory.Highlights
Record Sales and Growth
Loar Holdings achieved record sales of $110 million in Q3 2024, marking a 16% increase compared to the prior year. This was driven by strong performances in defense, commercial OEM, and commercial aftermarket.
Commercial OEM and Aftermarket Success
Commercial aftermarket sales increased by 19% in Q3 year-over-year and are up 16% sequentially from Q2 2024. Commercial OEM sales increased by 21% in Q3 2024 compared to the prior year.
Defense Sales Growth
Defense sales increased by 25% compared to the prior year period, driven by strong demand across multiple platforms and an increase in market share due to new product launches.
Improved Financial Metrics
Gross profit for Q3 2024 increased by 200 basis points compared to the prior year. Adjusted EBITDA was up $9 million in Q3 2024 versus the prior year period, with strong adjusted EBITDA margins at 36.8%.
2025 Positive Outlook
For 2025, Loar Holdings projects net sales between $470 million to $480 million, adjusted EBITDA between $176 million and $180 million, and improved adjusted EBITDA margins of approximately 37.5%.
Lowlights
Increased Interest Expenses
Interest expenses for the full year 2024 are expected to be approximately $54 million, up from a previous forecast of $42 million, due to borrowing $360 million for the acquisition of Applied Avionics.
Dilutive Acquisition Effects
The move of a manufacturing facility resulted in some dilutive effects, partially offsetting gross profit gains.
Challenges in Commercial OEM Sector
Commercial OEM segment faces challenges due to supply chain issues and strikes at Boeing and Textron, impacting revenue timing.
Company Guidance
During the Loar Holdings Inc. Q3 2024 earnings call, the company provided detailed guidance for both the remainder of 2024 and into 2025. For 2024, the company anticipates net sales between $390 million and $394 million, an adjusted EBITDA between $141 million and $143 million, and adjusted EPS of $0.35 to $0.37. The guidance for 2025 projects net sales of $470 million to $480 million, adjusted EBITDA of $176 million to $180 million, with an adjusted EBITDA margin of approximately 37.5%, and adjusted EPS ranging from $0.45 to $0.50. Loar expects capital expenditures of approximately $14 million in 2025 and an interest expense of around $60 million, with a full-year effective tax rate of approximately 30%. The company also highlighted its expectation for operating cash flow minus capital expenditures to exceed 125% of net income. These projections are based on strong visibility into their business, record backlogs, and continued demand in the aerospace sector.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.