VSE Corporation (VSEC)
NASDAQ:VSEC
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VSE
(NASDAQ:VSEC)
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Rating:61Neutral
Price Target:
$167.00
▼(-26.27% Downside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by stronger profitability trends and a historically strong balance sheet, but is held back by weak cash conversion/negative free cash flow and a high P/E valuation. The latest earnings call provides a meaningful positive offset via raised guidance and margin progress, though integration and financing-related risks remain.
Positive Factors
Very strong balance sheet and low leverage
Extremely low leverage and a large equity base materially reduce financial risk and increase resilience to cyclical downturns. This durable strength supports continued investment, M&A funding and creditor confidence, enabling strategic optionality over the next several quarters.
Negative Factors
Weak cash conversion and negative free cash flow
Negative free cash flow and weak cash conversion constrain internal funding for working capital, capex and acquisitions. Persistent FCF weakness increases reliance on external financing, raises vulnerability to interest cost shocks, and limits the company's ability to self-fund strategic initiatives.
Read all positive and negative factors
Positive Factors
Negative Factors
Very strong balance sheet and low leverage
Extremely low leverage and a large equity base materially reduce financial risk and increase resilience to cyclical downturns. This durable strength supports continued investment, M&A funding and creditor confidence, enabling strategic optionality over the next several quarters.
Read all positive factors
VSE (VSEC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.78B
Dividend Yield0.22%
Average Volume (3M)510.75K
Price to Earnings (P/E)43.6
Beta (1Y)1.51
Revenue Growth7.87%
EPS Growth229.36%
CountryUS
Employees1,400
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)2.49
Shares Outstanding28,057,152
10 Day Avg. Volume455,258
30 Day Avg. Volume510,754
Financial Highlights & Ratios
PEG Ratio1.45
Price to Book (P/B)2.55
Price to Sales (P/S)3.30
P/FCF Ratio642.39
Enterprise Value/Market Cap0.59
Enterprise Value/Revenue2.37
Enterprise Value/Gross Profit19.44
Enterprise Value/Ebitda19.84
Forecast
1Y Price Target
$248.00Price Target Upside9.49% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)4.41
Revenue Forecast (FY)$1.76B
VSE Business Overview & Revenue Model
Company Description
VSE Corporation operates as a diversified aftermarket products and services company in the United States. The company operates through three segments: Aviation, Fleet, and Federal and Defense. The Aviation segment provides international parts supp...
How the Company Makes Money
VSE primarily makes money by providing aviation aftermarket services and by distributing aviation parts and components. Key revenue streams typically include: (1) Parts distribution: revenue from the sale and distribution of OEM and aftermarket pa...
VSE Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operational and financial performance: record revenue, robust organic growth (~15% ex-acquisitions), notable margin expansion (+130 bps) and multiple strategic M&A and program wins (PAG, NorthStar, Pratt & Whitney Canada APU). Management strengthened liquidity and refinancing and provided an updated revenue and margin outlook that reflects the PAG acquisition. Key near-term risks include elevated cash usage and inventory build, higher leverage/interest expense from acquisition financing, integration and synergy execution risk related to newly closed PAG, customer concentration (~20%), and macro/fuel-price sensitivity. On balance the favorable operational momentum, margin improvement and strategic M&A progress outweigh near-term financing and integration challenges.Positive Updates
Record quarterly revenue and strong top-line growth
Revenue of $325 million, up 27% year-over-year; organic revenue (ex recent acquisitions) grew ~15% year-over-year, reflecting robust underlying demand.
Negative Updates
Near-term cash usage and inventory build
Used approximately $69 million of free cash flow in Q1 driven by part procurement seasonality, engine purchases for the airline asset-management program and inventory build for the new Pratt & Whitney Canada APU program. Majority of the ~$1.24 billion cash balance was used to fund the PAG acquisition at close, reducing liquidity available for other uses until financing is deployed.
Read all updates
Q1-2026 Updates
Positive
Negative
Record quarterly revenue and strong top-line growth
Revenue of $325 million, up 27% year-over-year; organic revenue (ex recent acquisitions) grew ~15% year-over-year, reflecting robust underlying demand.
Read all positive updates
Company Guidance
VSE updated full‑year 2026 guidance inclusive of the May 5 PAG close, raising revenue growth to 57%–61% and upping consolidated adjusted EBITDA margin guidance to 18.1%–18.5%; this follows Q1 results of $325M revenue (+27% YoY; distribution +26%, MRO +28%), $55M adjusted EBITDA (+37%, 17.1% margin, +130 bps YoY), $33M adjusted net income and $1.17 adjusted diluted EPS, with organic revenue up ~15% ex‑acquisitions. Management expects interest expense (net) of ~$37M–$40M, depreciation & amortization of ~$98M–$103M, an effective tax rate of ~25%, stock‑based compensation of ~$18M–$19M and capex of ~2.0%–2.5% of revenue; Q1 used about $69M of free cash flow but FCF is expected to improve through the year, and pro forma adjusted net leverage is estimated below 3x with a clear path to under 2.5x by year‑end. The company closed a $900M Term Loan B, upsized the revolver to $500M, reported $366M of debt and ~$1.24B of cash at quarter end (the majority of which funded PAG).VSE Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
88
Very Positive
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.18B | 1.11B | 1.08B | 860.49M | 669.45M | 750.85M |
| Gross Profit | 144.27M | 132.13M | 108.20M | 95.61M | 57.24M | 25.14M |
| EBITDA | 141.34M | 129.52M | 110.18M | 111.41M | 78.21M | 47.12M |
| Net Income | 62.83M | 53.49M | 30.52M | 39.13M | 28.06M | 7.97M |
Balance Sheet | ||||||
| Total Assets | 3.31B | 2.03B | 1.73B | 1.35B | 999.79M | 918.56M |
| Cash, Cash Equivalents and Short-Term Investments | 1.24B | 69.36M | 29.03M | 7.77M | 305.00K | 518.00K |
| Total Debt | 71.48M | 342.80M | 485.21M | 459.26M | 308.64M | 317.73M |
| Total Liabilities | 644.45M | 589.77M | 746.43M | 733.61M | 550.26M | 501.23M |
| Stockholders Equity | 2.67B | 1.44B | 988.19M | 616.73M | 449.53M | 417.33M |
Cash Flow | ||||||
| Free Cash Flow | -13.51M | 5.71M | -51.74M | -40.49M | -3.16M | -28.12M |
| Operating Cash Flow | 11.36M | 26.99M | -31.04M | -21.83M | 8.05M | -17.60M |
| Investing Cash Flow | -303.41M | -276.45M | -263.67M | -235.69M | -2.38M | -61.63M |
| Financing Cash Flow | 1.52B | 289.79M | 315.81M | 264.97M | -5.71M | 79.37M |
VSE Technical Analysis
Negative
226.50
Price Trends
187.91
Negative
197.85
Negative
182.84
Negative
Market Momentum
-6.32
Positive
45.34
Neutral
26.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VSEC, the sentiment is Negative. The current price of 226.5 is above the 20-day moving average (MA) of 177.83, above the 50-day MA of 187.91, and above the 200-day MA of 182.84, indicating a bearish trend. The MACD of -6.32 indicates Positive momentum. The RSI at 45.34 is Neutral, neither overbought nor oversold. The STOCH value of 26.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VSEC.
VSE Risk Analysis
VSE disclosed 28 risk factors in its most recent earnings report. VSE 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
VSE Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $4.28B | 16.28 | 12.07% | ― | 16.85% | ― | |
64 Neutral | $2.24B | 28.76 | 8.19% | ― | 9.03% | 113.63% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $4.78B | 43.63 | 4.14% | 0.22% | 7.87% | 229.36% | |
61 Neutral | $2.16B | 48.18 | -4.86% | ― | 6.48% | -191.94% | |
61 Neutral | $5.69B | -370.51 | -0.96% | ― | 8.95% | 78.82% |
* Industrials Sector Average
VSEC
VSE
173.76
47.14
37.23%
AIR
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48.35
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DCO
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142.92
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MRCY
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VVX
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71.80
25.37
54.64%
VSE Corporate Events
Business Operations and StrategyExecutive/Board ChangesDividendsRegulatory Filings and ComplianceShareholder Meetings
VSE Shareholders Approve Governance Changes and Dividend Declaration
Positive
May 8, 2026
At its May 7, 2026 annual meeting, VSE Corporation stockholders elected eight directors for one-year terms, ratified Grant Thornton LLP as independent auditor for 2026, approved on an advisory basis the company’s executive compensation and b...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
VSE Closes Precision Aviation Acquisition and Expands Platform
Positive
May 7, 2026
On May 5, 2026, VSE Corporation closed its acquisition of Precision Aviation Group for approximately $2.025 billion in cash and equity, plus up to $125 million in contingent earnout tied to 2026 profitability targets. The deal, funded in part by F...
Business Operations and StrategyDividends
VSE Declares Quarterly Dividend, Reinforcing Shareholder Returns
Positive
Feb 27, 2026
On February 25, 2026, VSE Corporation announced that its Board of Directors had declared a regular quarterly cash dividend of $0.10 per share of common stock. The dividend, approved by the board on February 24, 2026, is scheduled to be paid on Apr...
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.