StandardAero, Inc. (SARO) AI Stock Analysis

• Market Cap: $8.99B
• Dividend Yield: N/A
• Average Volume (3M): 1.69M
• Price to Earnings (P/E): 68.6
• Beta (1Y): 1.24
• Revenue Growth: 16.09%
• EPS Growth: N/A
• Country: US
• Employees: 7,700
• Sector: Industrials
• Sector Strength: 80
• Industry: Aerospace & Defense
• EPS (TTM): 0.20
• Shares Outstanding: 334,470,280
• 10 Day Avg. Volume: 2,060,288
• 30 Day Avg. Volume: 1,694,146
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.45
• Enterprise Value/Revenue: 2.32
• Enterprise Value/Gross Profit: 15.95
• Enterprise Value/Ebitda: 21.09
• 1Y Price Target: $33.67
• Price Target Upside: 23.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 62 Neutral
• Price Target: $28.00 ▲(2.83% Upside)

StandardAero, Inc. shows strong revenue growth and improving profitability, as highlighted in the earnings call. However, the stock faces challenges with high leverage, negative free cash flow, and a bearish technical outlook. The high P/E ratio suggests potential overvaluation. The company's positive trajectory and increased guidance are promising, but financial stability and valuation concerns weigh on the overall score.

Positive Factors

Financial Performance

Adjusted EBITDA exceeded estimates, indicating better-than-expected profitability.

Growth Initiatives

Strategic growth initiatives have progressed as StandardAero secured over $1.5 billion in LEAP bookings, showing growth from previous figures.

Market Demand

Strong demand for engine maintenance, repair, and overhaul (MRO) is expected to persist, indicating potential growth for StandardAero.

Negative Factors

Investor Sentiment

There was a negative stock reaction despite a solid quarter, suggesting potential investor concerns or market volatility.

Margin Pressure

While revenues from LEAP and CFM56 programs are expected to grow, near-term margin pressure is anticipated due to the learning curve and costs of the ramp.

StandardAero, Inc. Business Overview & Revenue Model

Company Description

StandardAero, Inc. (SARO) is a leading provider of maintenance, repair, and overhaul (MRO) services for aircraft engines and components. The company serves a diverse range of sectors including commercial aviation, business aviation, military, and industrial power. With a global presence, StandardAero is recognized for its technical expertise and customer-focused solutions, offering a comprehensive suite of services that support various engine types and aircraft models.

How the Company Makes Money

StandardAero makes money primarily through its MRO services, which involve repairing, maintaining, and overhauling aircraft engines and related components. These services are crucial for ensuring the operational efficiency and safety of aircraft, thus forming the core revenue stream for the company. StandardAero operates through a network of service centers and facilities worldwide, allowing it to serve a broad client base that includes commercial airlines, government and military organizations, and business jet operators. The company also benefits from strategic partnerships and long-term contracts with major engine manufacturers and aircraft operators, which provide stable and recurring revenue opportunities. Additionally, StandardAero may generate income from the sale of spare parts and technical consultancy services, further diversifying its revenue streams.

StandardAero, Inc. Financial Statement Overview

Summary

StandardAero, Inc. demonstrates strong revenue growth and improving profitability margins. While the balance sheet shows a decrease in leverage, high debt levels remain a concern. Cash flow management needs improvement, as free cash flow is still negative despite better operating cash flows. The company is on a positive trajectory, but must address cash flow and leverage challenges to achieve financial stability.

Income Statement

StandardAero, Inc. shows strong revenue growth with a 14.8% increase from 2023 to 2024, and a 10% increase from 2022 to 2023. The gross profit margin improved to 14.4% in 2024 from 13.9% in 2023, indicating better cost management. The net profit margin turned positive at 0.2% in 2024, recovering from a net loss in previous years. However, EBIT and EBITDA margins, while positive, indicate room for improvement at 7.7% and 10.5%, respectively.

Balance Sheet

The company's debt-to-equity ratio improved to 1.02 in 2024 from 2.94 in 2023, showing a reduction in leverage. Return on equity increased to 0.5% in 2024 from negative figures previously, but remains relatively low. The equity ratio improved to 38.2% from 19.9% in 2023, indicating stronger equity compared to total assets. Despite these improvements, high debt levels pose a potential risk.

Cash Flow

Operating cash flow increased slightly to $76.3M in 2024, and the free cash flow improved, though still negative at -$46.9M. The free cash flow to net income ratio remains negative, reflecting ongoing challenges in generating free cash flow. The operating cash flow to net income ratio is positive, indicating some efficiency in converting profits into cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	5.62B	5.24B	4.56B	4.15B
Gross Profit	817.45M	754.16M	635.28M	545.68M
EBITDA	618.12M	551.34M	530.20M	459.14M
Net Income	133.04M	10.97M	-35.06M	-21.00M
Balance Sheet
Total Assets	6.48B	6.21B	5.76B	5.73B
Cash, Cash Equivalents and Short-Term Investments	91.51M	102.58M	57.98M	120.06M
Total Debt	2.55B	2.41B	3.38B	3.37B
Total Liabilities	3.97B	3.84B	4.61B	4.53B
Stockholders Equity	2.51B	2.37B	1.15B	1.20B
Cash Flow
Free Cash Flow	-81.75M	-46.85M	-17.42M	-16.95M
Operating Cash Flow	73.38M	76.33M	67.89M	27.26M
Investing Cash Flow	-263.04M	-235.45M	-112.86M	-60.75M
Financing Cash Flow	219.56M	203.76M	-14.69M	-25.78M

StandardAero, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SARO, the sentiment is Negative. The current price of 27.23 is below the 20-day moving average (MA) of 27.69, below the 50-day MA of 29.17, and below the 200-day MA of 27.68, indicating a bearish trend. The MACD of -0.66 indicates Positive momentum. The RSI at 41.78 is Neutral, neither overbought nor oversold. The STOCH value of 35.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SARO.

StandardAero, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AIR	77 Outperform	$2.65B	214.69	1.02%	―	19.91%	-73.61%
WWD	73 Outperform	$14.86B	39.21	16.76%	0.44%	5.53%	5.56%
LOAR	69 Neutral	$6.69B	154.16	4.70%	―	26.15%	251.10%
DRS	68 Neutral	$10.92B	44.11	9.99%	0.66%	11.43%	32.31%
Sector *	64 Neutral	$10.71B	16.03	7.42%	2.02%	2.57%	-16.39%
SARO	62 Neutral	$8.99B	68.57	7.25%	―	16.09%	―
SPR	51 Neutral	$4.68B	―	81.63%	―	-2.60%	-94.76%

StandardAero, Inc. Corporate Events

StandardAero Holds Annual Stockholders Meeting on June 12

On June 12, 2025, StandardAero, Inc. conducted its Annual Meeting of Stockholders, where approximately 84.26% of the company’s outstanding common stock was represented. During the meeting, stockholders elected Peter J. Clare, Russell Ford, and Andrea Fischer Newman as Class I directors, ratified the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025, and approved the compensation of the company’s named executive officers. Additionally, it was decided that future advisory votes on executive compensation would occur annually.