VSE (VSEC) AI Stock Analysis

• Market Cap: $2.65B
• Dividend Yield: 0.31%
• Average Volume (3M): 221.43K
• Price to Earnings (P/E): 161.6
• Beta (1Y): 1.25
• Revenue Growth: 19.84%
• EPS Growth: -51.67%
• Country: US
• Employees: 1,400
• Sector: Industrials
• Sector Strength: 86
• Industry: Aerospace & Defense
• EPS (TTM): 0.78
• Shares Outstanding: 20,669,683
• 10 Day Avg. Volume: 287,692
• 30 Day Avg. Volume: 221,429
• PEG Ratio: 0.09
• Price to Book (P/B): 1.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -189.54
• Enterprise Value/Market Cap: 0.35
• Enterprise Value/Revenue: 0.22
• Enterprise Value/Gross Profit: 8.57
• Enterprise Value/Ebitda: 1.96
• 1Y Price Target: $149.25
• Price Target Upside: 16.63% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 67 Neutral
• Price Target: $148.00 ▲(15.65%Upside)

VSE Corporation's overall stock score reflects strong revenue growth and strategic initiatives in the aviation sector, bolstered by positive earnings call insights and recent corporate actions. However, challenges in profitability, cash flow generation, and high valuation metrics pose risks. The technical analysis suggests strong recent price performance, but potential overbought conditions warrant caution. Overall, VSE is well-positioned for growth, but must address profitability and valuation concerns to enhance investor confidence.

Positive Factors

Financial Performance

VSE reported strong first-quarter results above consensus.

Revenue Growth

VSEC's aviation segment achieved record revenues and profitability, with sales increasing by 58% driven by balanced contributions across distribution and maintenance, repair and overhaul.

Strategic Partnerships

Cuomo’s deep aftermarket industry relationships from his prior firm and the foundation that he has built should enable the company to continue forging strategic partnerships and filling gaps in the fragmented aviation aftermarket services industry.

Negative Factors

Integration Challenges

The company is accelerating the integrations of Turbine Controls and Kellstrom, which is expected to be accretive to margins.

Market Competition

VSE has demonstrated a consistent ability to win new aerospace OEM deals and take share from incumbents.

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 supply and distribution, supply chain solutions, and component and engine accessory maintenance, repair, and overhaul (MRO) services. This segment serves commercial airlines, regional airlines, cargo transporters, MRO integrators and providers, aviation manufacturers, corporate and private aircraft owners, and fixed-base operators. The Fleet segment offers parts supply, inventory management, e-commerce fulfillment, logistics, and other services to assist aftermarket commercial and federal customers with their supply chain management. This segment also provides sale of vehicle parts and supply chain services to support client truck fleets, as well as sustainment solutions and managed inventory services to government and commercial truck fleets. The Federal and Defense segment offers aftermarket refurbishment and sustainment services to extend and maintain the life cycle of military vehicles, ships, and aircraft for the United States Department of Defense (DoD). This segment also provides foreign military sales services, engineering, logistics, maintenance, configuration management, prototyping, technology, and field support services to the DoD and other customers. In addition, this segment offers energy consulting services and IT solutions to various DoD, federal civilian agencies, and commercial clients. The company also provides vehicle and equipment maintenance and refurbishment, logistics, engineering support, energy services, and IT and health care IT solutions, as well as consulting services. VSE Corporation was incorporated in 1959 and is headquartered in Alexandria, Virginia.

How the Company Makes Money

VSE Corporation generates revenue through multiple channels aligned with its three main business segments. In the Aviation segment, the company makes money by providing aftermarket parts distribution and maintenance, repair, and overhaul (MRO) services for commercial and business aircraft. The Fleet segment contributes to revenue through vehicle maintenance and repair services, parts distribution, and fleet management for both commercial and government clients. In the Federal & Defense Services segment, VSE earns income by offering engineering, logistics, and technical support services primarily to the U.S. government and defense agencies. Key factors contributing to VSE's earnings include long-term government contracts, strategic partnerships with OEMs and suppliers, and a diversified customer base across the aviation and defense sectors.

VSE Financial Statement Overview

Summary

VSE demonstrates robust revenue growth and low leverage, indicating financial stability and effective revenue generation. However, the company faces challenges with net profitability and cash flow generation, pointing to potential inefficiencies in cost management and operational cash conversion. While the company is well-positioned in terms of equity, enhancing profitability and cash flow efficiency will be crucial for sustaining growth and delivering shareholder value.

Income Statement

VSE has demonstrated solid revenue growth with an increase from $860.49M in 2023 to $1.09B TTM, alongside a healthy EBIT margin of 8.69% and EBITDA margin of 10.98% TTM. The gross profit margin is 9.85% TTM, indicating effective control over production costs. The net profit margin, although positive at 1.42% TTM, reflects a small portion of revenue being converted into net income, pointing to potential cost inefficiencies or high-interest expenses. Overall, VSE shows strength in revenue growth and operating efficiency, with room for improvement in cost management and net profitability.

Balance Sheet

VSE's balance sheet shows strong equity with a significant equity ratio of 56.28% TTM, indicating a well-capitalized company. The debt-to-equity ratio is 0.05 TTM, suggesting low leverage and reduced financial risk. However, the return on equity is relatively low at 1.59% TTM, demonstrating limited effectiveness in generating profits from shareholders' equity. While the company maintains financial stability with low leverage, there is a need to enhance profitability to maximize shareholder value.

Cash Flow

VSE's cash flow statement highlights challenges in free cash flow generation, with negative free cash flow at -$14.46M TTM, though an improvement from -$51.74M in the prior year. The operating cash flow to net income ratio is 0.09 TTM, reflecting limited cash generation relative to net income, suggesting potential issues in converting earnings into cash flow. Despite improvements in free cash flow, the company needs to focus on enhancing operational efficiency to improve cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.09B	1.08B	860.49M	949.76M	750.85M	661.66M
Gross Profit	107.84M	108.20M	95.61M	77.93M	43.63M	75.39M
EBITDA	120.28M	110.18M	111.41M	78.21M	21.52M	78.90M
Net Income	15.50M	15.32M	39.13M	28.06M	7.97M	-5.17M
Balance Sheet
Total Assets	1.73B	1.73B	1.35B	999.79M	918.56M	780.08M
Cash, Cash Equivalents and Short-Term Investments	5.71M	29.03M	7.77M	478.00K	518.00K	378.00K
Total Debt	44.97M	485.21M	459.26M	325.89M	317.73M	277.92M
Total Liabilities	757.24M	746.43M	733.61M	550.26M	501.23M	423.76M
Stockholders Equity	975.74M	988.19M	616.73M	449.53M	417.33M	356.32M
Cash Flow
Free Cash Flow	-14.46M	-51.74M	-40.49M	-3.16M	-28.12M	31.33M
Operating Cash Flow	1.39M	-31.04M	-21.83M	8.05M	-17.60M	35.76M
Investing Cash Flow	-297.21M	-263.67M	-235.69M	-2.38M	-61.63M	20.22M
Financing Cash Flow	295.75M	315.81M	264.97M	-5.71M	79.37M	-56.34M

VSE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 127.97
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 127.97 is below the 20-day moving average (MA) of 133.90, below the 50-day MA of 128.77, and above the 200-day MA of 111.08, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 43.60 is Neutral, neither overbought nor oversold. The STOCH value of 30.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VSEC.

VSE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AIR	74 Outperform	$2.57B	246.75	-1.08%	―	21.07%	-120.95%
VVX	71 Outperform	$1.56B	37.72	4.10%	―	7.38%	―
DCO	68 Neutral	$1.26B	36.41	5.25%	―	3.02%	95.76%
VSEC	67 Neutral	$2.65B	161.62	4.83%	0.31%	19.84%	-51.67%
Sector *	65 Neutral	$10.77B	15.80	5.51%	1.90%	3.03%	-26.66%
MRCY	58 Neutral	$3.02B	―	-4.45%	―	5.66%	52.71%
TGI	55 Neutral	$2.00B	56.28	46.74%	―	-4.74%	―

VSE Corporate Events

VSE Corporation Approves Key Proposals at Annual Meeting

On May 8, 2025, VSE Corporation held its Annual Meeting of Stockholders where five proposals were approved, including the election of eight directors, an amendment to increase authorized shares, and the ratification of Grant Thornton LLP as the independent accountant. Additionally, the Board declared a quarterly cash dividend of $0.10 per share, payable on July 30, 2025, to stockholders of record on July 16, 2025. These decisions reflect VSE’s strategic focus on expanding its capital structure and rewarding shareholders, potentially strengthening its market position and stakeholder confidence.