StandardAero, Inc. (SARO) AI Stock Analysis

• Market Cap: $10.20B
• Dividend Yield: N/A
• Average Volume (3M): 2.66M
• Price to Earnings (P/E): 144.8
• Beta (1Y): 1.29
• Revenue Growth: 16.92%
• EPS Growth: N/A
• Country: US
• Employees: 7,700
• Sector: Industrials
• Sector Strength: 85
• Industry: Aerospace & Defense
• EPS (TTM): 0.19
• Shares Outstanding: 334,461,640
• 10 Day Avg. Volume: 2,177,658
• 30 Day Avg. Volume: 2,663,128
• PEG Ratio: 16.51
• Price to Book (P/B): 9.14
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -646.08
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 0.73
• Enterprise Value/Gross Profit: 19.77
• Enterprise Value/Ebitda: 6.83
• 1Y Price Target: $33.67
• Price Target Upside: 10.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 68 Neutral
• Price Target: $31.00 ▲(1.94%Upside)

StandardAero, Inc. demonstrates strong growth and improving profitability, with positive momentum in its stock price. However, high debt and negative free cash flow present significant risks. The high P/E ratio suggests overvaluation, further limiting the stock's appeal. Overall, while the company shows promise, addressing financial and valuation concerns is crucial.

Positive Factors

Financial Performance

SARO reported strong 1Q25 results as demand for engine MRO remained elevated across all channels with Commercial Aerospace up 18% YoY, Business Aviation up 13% YoY and Military & Helicopter up 10% YoY.

Outlook

SARO is one of the only companies within our coverage universe to raise its 2025 outlook despite tariff headwinds.

Revenue Growth

Added capabilities on the LEAP, CFM56, and CF34 engines support long-term revenue growth.

Negative Factors

Cash Flow

Operating cash flow reported was below both MSe and consensus estimates.

Cost and Learning Curve

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.

Margin Pressure

The focus on 'wrench-turning' rather than 'part-making' may limit the company's margin upside.

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. shows strong revenue growth and improved profitability margins. However, high debt levels and negative free cash flow pose challenges. The company needs to address these issues for better 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
5.44B	5.24B	4.56B	4.15B
	Gross Profit
718.28M	754.16M	635.28M	545.68M
	EBIT
426.64M	451.41M	337.36M	262.63M
	EBITDA
536.28M	560.51M	530.20M	459.14M
	Net Income Common Stockholders
70.73M	10.97M	-35.06M	-21.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
140.82M	102.58M	57.98M	120.06M
	Total Assets
6.50B	6.21B	5.76B	5.73B
	Total Debt
2.52B	2.41B	3.38B	3.37B
	Net Debt
2.37B	2.31B	3.32B	3.25B
	Total Liabilities
4.06B	3.84B	4.61B	4.53B
	Stockholders Equity
2.44B	2.37B	1.15B	1.20B
Cash Flow		Free Cash Flow
-64.34M	-46.85M	-17.42M	-16.95M
	Operating Cash Flow
61.42M	76.33M	67.89M	27.26M
	Investing Cash Flow
-257.50M	-235.45M	-112.86M	-60.75M
	Financing Cash Flow
228.69M	203.76M	-14.69M	-25.78M

StandardAero, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AIR	74 Outperform	$2.45B	246.75	-1.08%	―	21.07%	-120.95%
WWD	72 Outperform	$13.81B	37.49	16.35%	0.48%	4.96%	8.41%
DRS	71 Outperform	$11.62B	50.07	9.50%	0.78%	13.58%	25.96%
LOAR	70 Outperform	$7.68B	215.38	4.62%	―	27.03%	562.31%
SARO	68 Neutral	$10.20B	144.76		―	16.92%	―
Sector *	66 Neutral	$4.50B	12.26	5.40%	3.65%	4.17%	-12.02%
SPR	37 Underperform	$4.34B	―	81.63%	―	-2.91%	-109.95%

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.

The most recent analyst rating on (SARO) stock is a Buy with a $38.00 price target. To see the full list of analyst forecasts on StandardAero, Inc. stock, see the SARO Stock Forecast page.

StandardAero Stockholders Announce Secondary Offering

On March 24, 2025, StandardAero, Inc. announced that two of its stockholders, affiliates of The Carlyle Group Inc. and GIC Private Limited, plan to sell 30,000,000 shares of the company’s common stock in an underwritten secondary offering. The selling stockholders will receive all net proceeds from the sale, with no shares being sold by the company. The offering, managed by J.P. Morgan, Morgan Stanley, and RBC Capital Markets, includes a 30-day option for underwriters to purchase an additional 4,500,000 shares. This move does not impact StandardAero directly but reflects the selling stockholders’ decision to liquidate part of their holdings.