StandardAero, Inc. (SARO)
NYSE:SARO
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StandardAero, Inc.
(NYSE:SARO)
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Rating:63Neutral
Price Target:
$29.00
▲(8.37% Upside)
Action:Reiterated
Date:06/02/26
The score is driven primarily by improving profitability and a healthier balance sheet, but held back by weak cash conversion and declining TTM free cash flow. Technicals are mildly supportive yet somewhat stretched, valuation looks demanding at ~30x earnings, and the latest call was broadly positive with raised guidance despite near-term margin and working-capital headwinds.
Positive Factors
Consistent revenue growth
Sustained organic revenue growth across multiple end markets indicates durable demand for MRO services and validates program ramps. Consistent top-line expansion supports capacity utilization, spreads fixed costs, and underpins longer-term margin recovery as learning curves and scale benefits persist.
Negative Factors
Weak cash conversion
Low cash conversion versus reported earnings highlights working‑capital drag and timing issues. Persistent weak operating cash flow constrains organic funding for capex, M&A, buybacks, or debt paydown and raises execution risk if revenue or margins soften during the recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent revenue growth
Sustained organic revenue growth across multiple end markets indicates durable demand for MRO services and validates program ramps. Consistent top-line expansion supports capacity utilization, spreads fixed costs, and underpins longer-term margin recovery as learning curves and scale benefits persist.
Read all positive factors
StandardAero, Inc. (SARO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.95B
Dividend YieldN/A
Average Volume (3M)4.14M
Price to Earnings (P/E)29.9
Beta (1Y)1.28
Revenue Growth15.02%
EPS Growth319.25%
CountryUS
Employees7,700
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.90
Shares Outstanding332,472,000
10 Day Avg. Volume4,423,539
30 Day Avg. Volume4,136,207
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)3.53
Price to Sales (P/S)1.55
P/FCF Ratio40.21
Enterprise Value/Market Cap1.33
Enterprise Value/Revenue1.90
Enterprise Value/Gross Profit13.28
Enterprise Value/Ebitda15.71
Forecast
1Y Price Target
$35.08Price Target Upside31.10% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)1.29
Revenue Forecast (FY)$6.43B
StandardAero, Inc. Business Overview & Revenue Model
Company Description
StandardAero, Inc., founded in 1911 and based in Scottsdale, Arizona, offers specialized post-sale support for aircraft engines. The company provides these services for both fixed-wing and rotary-wing aircraft across a broad international scope, i...
How the Company Makes Money
StandardAero primarily makes money by providing maintenance, repair, and overhaul services under customer contracts and work orders. Key revenue streams typically include: (1) Engine MRO: teardown/inspection, repair, overhaul, and testing services...
StandardAero, Inc. Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 19, 2026
Earnings Call Sentiment Positive
Overall the call conveyed a positive operational and financial trajectory: strong top-line growth across end markets, raised full-year guidance, strategic M&A and share repurchases, program ramps (LEAP/CFM56) moving toward profitability, and improved leverage. The quarter's headline margin compression and negative Q1 free cash flow were driven largely by transitory items (inventory/pass-through burn, program learning curves, timing and one-time contract closeout) that management expects to reverse through the rest of 2026, supporting confidence in double-digit adjusted EBITDA growth for the year.Positive Updates
Strong Top-Line Growth
Q1 revenue of $1.63 billion, up 13.3% year-over-year organically; all three major end markets delivered double-digit growth.
Negative Updates
Adjusted EBITDA Margin Compression
GAAP adjusted EBITDA margin declined to 12.5% in Q1 from 13.8% prior year (Engine Services margin 12.3% vs 13.7% prior). Management attributes compression to several transitory items but reported quarter-level margin dilution.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Top-Line Growth
Q1 revenue of $1.63 billion, up 13.3% year-over-year organically; all three major end markets delivered double-digit growth.
Read all positive updates
Company Guidance
StandardAero raised full‑year guidance to revenue $6.325–$6.45B (midpoint +$38M), adjusted EBITDA $875–$905M (bottom up $5M), and adjusted EPS $1.40–$1.50 (up $0.05; ~22% YoY at midpoint), while reiterating free cash flow $270–$300M; Q1 results were revenue $1.63B (+13.3% organic), adjusted EBITDA $203M (12.5% margin), adjusted EPS $0.33 (+14% YoY) and free cash flow use of $134M, with net debt / adjusted EBITDA of 2.6x (target 2.0–3.0x) after $60M of repurchases in Q1 under a $450M program. Management expects Engine Services margins >14% for the remainder of 2026 as it eliminates $300–$400M of low/no‑margin pass‑through revenue over the next three quarters, anticipates a return to double‑digit EBITDA growth beginning in Q2, raised military & helicopter end‑market growth to low double‑digit and business aviation to high‑single to low‑double digit, and reiterated disciplined capital allocation including the accretive Unified Turbines acquisition.StandardAero, Inc. Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
66
Positive
Cash Flow
48
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.25B | 6.06B | 5.24B | 4.56B | 4.15B |
| Gross Profit | 894.76M | 897.45M | 754.16M | 635.28M | 545.68M |
| EBITDA | 756.69M | 744.73M | 551.34M | 511.87M | 459.14M |
| Net Income | 294.40M | 277.42M | 10.97M | -35.06M | -21.00M |
Balance Sheet | |||||
| Total Assets | 6.70B | 6.56B | 6.21B | 5.76B | 5.73B |
| Cash, Cash Equivalents and Short-Term Investments | 89.17M | 289.72M | 102.58M | 57.98M | 120.06M |
| Total Debt | 2.45B | 2.45B | 2.41B | 3.38B | 3.37B |
| Total Liabilities | 4.02B | 3.89B | 3.84B | 4.61B | 4.53B |
| Stockholders Equity | 2.69B | 2.67B | 2.37B | 1.15B | 1.20B |
Cash Flow | |||||
| Free Cash Flow | 133.07M | 234.30M | -46.85M | -17.42M | -16.95M |
| Operating Cash Flow | 221.14M | 316.70M | 76.33M | 67.89M | 27.26M |
| Investing Cash Flow | -80.52M | -106.40M | -235.45M | -112.86M | -60.75M |
| Financing Cash Flow | -194.17M | -25.51M | 203.76M | -14.69M | -25.78M |
StandardAero, Inc. Technical Analysis
Positive
26.76
Price Trends
26.00
Positive
27.70
Negative
27.68
Negative
Market Momentum
-0.09
Positive
54.55
Neutral
50.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SARO, the sentiment is Positive. The current price of 26.76 is above the 20-day moving average (MA) of 26.18, above the 50-day MA of 26.00, and below the 200-day MA of 27.68, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 54.55 is Neutral, neither overbought nor oversold. The STOCH value of 50.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SARO.
StandardAero, Inc. Risk Analysis
StandardAero, Inc. disclosed 61 risk factors in its most recent earnings report. StandardAero, Inc. 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
StandardAero, Inc. Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $12.53B | 43.97 | 14.06% | 0.46% | 13.79% | 37.64% | |
65 Neutral | $3.44B | 80.88 | 26.60% | ― | 8.64% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $8.95B | 29.91 | 11.26% | ― | 15.02% | 319.25% | |
62 Neutral | $7.22B | -506.64 | -0.96% | ― | 8.95% | 78.82% |
* Industrials Sector Average
SARO
StandardAero, Inc.
26.91
-3.59
-11.77%
ATRO
Astronics
96.00
61.57
178.83%
MRCY
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120.30
70.77
142.88%
MOG.A
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395.10
221.57
127.68%
StandardAero, Inc. Corporate Events
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
StandardAero Announces CEO Succession and Affirms 2026 Outlook
Positive
Jun 2, 2026
On June 2, 2026, StandardAero announced that lead independent director and 35‑year industry veteran Paul McElhinney will become chief executive officer on October 1, 2026, succeeding Russell Ford, who plans to retire as CEO on that date and ...
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.