VSE (VSEC) AI Stock Analysis

• Market Cap: $5.43B
• Dividend Yield: 0.22%
• Average Volume (3M): 724.32K
• Price to Earnings (P/E): 72.4
• Beta (1Y): 1.31
• Revenue Growth: 9.22%
• EPS Growth: 65.05%
• Country: US
• Employees: 1,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 1.16
• Shares Outstanding: 27,991,028
• 10 Day Avg. Volume: 583,026
• 30 Day Avg. Volume: 724,316
• PEG Ratio: 1.45
• Price to Book (P/B): 2.55
• Price to Sales (P/S): 3.30
• P/FCF Ratio: 642.39
• Enterprise Value/Market Cap: 0.80
• Enterprise Value/Revenue: 3.89
• Enterprise Value/Gross Profit: 32.72
• Enterprise Value/Ebitda: 33.20
• 1Y Price Target: $257.71
• Price Target Upside: 32.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 4.25
• Revenue Forecast (FY): $1.35B

• Rating: 64 Neutral
• Price Target: $209.00 ▲(7.69% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is driven primarily by improved fundamentals on leverage and strong growth, but held back by weak and inconsistent cash flow/cash conversion. Technicals are supportive with a clear uptrend, while valuation is a meaningful headwind due to the very high P/E and low dividend yield. Earnings-call commentary was broadly positive with raised guidance and strong results, partially tempered by adjustments and seasonal softness expectations.

Positive Factors

Revenue and Margin Momentum

Sustained double-digit top-line and EBITDA expansion indicates durable demand for aftermarket MRO and distribution services and improving operational leverage. Raised guidance reflects management conviction that underlying commercial and aviation demand and higher‑margin mix will persist over multiple quarters.

Material De-risking of Leverage

A substantially lower leverage profile gives the company more financial flexibility to invest, absorb cyclicality, and pursue acquisitions. A conservative capital structure reduces refinancing risk and improves credit resilience, supporting durable access to capital for strategic initiatives.

Scale and Capability Expansion via M&A

The transformational PAG deal and earlier Aero 3 add geographic scale, proprietary repair content, and engine/component capabilities, diversifying end markets and increasing recurring service revenue. These structural additions should raise margin potential and competitive barriers over the medium term.

Negative Factors

Weak and Volatile Cash Generation

Persistent variability and historically negative operating cash flow undermine the quality of reported earnings and limit internal funding for capex, dividends, and acquisitions. Weak cash conversion increases dependence on external financing and reduces margin for execution missteps.

Modest Returns on Equity

Low returns on equity indicate the company has not consistently converted asset and equity growth into shareholder profitability. Over the medium term this may constrain investor returns and raise questions about operational efficiency and capital allocation effectiveness.

Execution and Financing Risk from Large Acquisition

A transformational, highly financed acquisition materially changes scale and capital structure; successful integration is critical. Execution, integration costs, regulatory approvals, and elevated leverage or dilution risk from equity/unit financings could pressure cash flow and margin delivery if synergies lag.

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 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 parts/components to airlines, MROs, and other aviation operators. This model generally earns gross profit through the spread between procurement cost and customer selling price, and can be supported by inventory management and fulfillment capabilities. (2) Maintenance and repair services (MRO): revenue from labor and services performed to inspect, repair, overhaul, and test aircraft components and accessories; this can include fixed-price repair, time-and-materials work, and program-based support depending on contract structure. (3) Component and accessory repair/overhaul: revenue generated from specialized repair capabilities (including testing and certifications where applicable) for parts returned from customers, often with recurring demand tied to flight hours, utilization, and regulatory maintenance intervals. (4) Supply-chain and logistics/support services: revenue from providing kitting, warehousing, procurement support, and related supply-chain management activities for aviation customers; earnings depend on service fees and contract terms. Partnerships and contributing factors: VSE’s distribution economics and service volumes can be influenced by relationships/authorizations with original equipment manufacturers (OEMs) and other suppliers, customer contracts and long-term support programs, aviation fleet utilization and cycles, and the company’s ability to maintain required certifications and turnaround times for repair work. Specific named partnerships, contract terms, and segment mix details are null.

VSE Financial Statement Overview

Summary

Revenue has grown strongly and the balance sheet de-risked meaningfully (debt-to-equity down to ~0.04 in 2025). Offsetting this, cash generation and cash conversion have been weak/volatile (negative operating cash flow in multiple years and 2025 operating cash flow covering only ~11% of net income), which raises quality-of-earnings concerns.

Income Statement

Revenue growth has been strong over the last few years (2023–2025), and net profitability improved versus earlier periods, with net margin rising to ~4.8% in 2025 (vs ~2.8% in 2024 and a loss in 2020). However, profitability trends are less consistent than the top line (net income dipped in 2024 before rebounding in 2025), and the 2025 gross and operating margin figures appear inconsistent with prior years, which reduces confidence in the reported operating profitability profile.

Balance Sheet

Leverage improved materially: debt-to-equity fell from ~0.74 (2023) and ~0.49 (2024) to ~0.04 in 2025, indicating a much more conservative capital structure. Equity and total assets also increased over time, supporting balance-sheet scale. The main weakness is that returns on equity remain modest (roughly 3%–6% in recent years, ~3.7% in 2025), suggesting the company is not yet translating its larger capital base into strong shareholder-level profitability.

Cash Flow

Cash generation has been volatile and often weak. Operating cash flow was negative in multiple years (2021, 2023, 2024) before turning positive in 2025, but 2025 operating cash flow still covered only ~11% of net income, implying earnings were not well supported by cash. Free cash flow is also inconsistent—negative in several years and sharply lower in 2025 (about -79% growth to ~$5.7M), which limits financial flexibility despite the improved balance sheet.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.11B	1.08B	860.49M	669.45M	750.85M
Gross Profit	132.13M	108.20M	95.61M	57.24M	25.14M
EBITDA	129.52M	110.18M	111.41M	78.21M	47.12M
Net Income	53.49M	30.52M	39.13M	28.06M	7.97M
Balance Sheet
Total Assets	2.03B	1.73B	1.35B	999.79M	918.56M
Cash, Cash Equivalents and Short-Term Investments	69.36M	29.03M	7.77M	305.00K	518.00K
Total Debt	342.80M	485.21M	459.26M	308.64M	317.73M
Total Liabilities	589.77M	746.43M	733.61M	550.26M	501.23M
Stockholders Equity	1.44B	988.19M	616.73M	449.53M	417.33M
Cash Flow
Free Cash Flow	5.71M	-51.74M	-40.49M	-3.16M	-28.12M
Operating Cash Flow	26.99M	-31.04M	-21.83M	8.05M	-17.60M
Investing Cash Flow	-276.45M	-263.67M	-235.69M	-2.38M	-61.63M
Financing Cash Flow	289.79M	315.81M	264.97M	-5.71M	79.37M

VSE Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 194.08
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VSEC, the sentiment is Neutral. The current price of 194.08 is below the 20-day moving average (MA) of 216.35, below the 50-day MA of 209.14, and above the 200-day MA of 170.39, indicating a neutral trend. The MACD of -1.71 indicates Positive momentum. The RSI at 38.30 is Neutral, neither overbought nor oversold. The STOCH value of 5.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VSEC.

VSE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VVX	68 Neutral	$2.09B	22.10	7.30%	―	5.10%	774.57%
VSEC	64 Neutral	$5.43B	72.43	2.24%	0.22%	9.22%	65.05%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AIR	59 Neutral	$4.18B	21.70	7.23%	―	17.59%	-56.15%
DCO	59 Neutral	$1.90B	-41.88	-5.01%	―	3.16%	-213.56%
MRCY	55 Neutral	$4.84B	-73.03	-2.08%	―	8.63%	72.72%

VSE Corporate Events

VSE Declares Quarterly Dividend, Reinforcing Shareholder Returns

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 April 29, 2026 to shareholders of record as of April 15, 2026, underscoring the company’s ongoing practice of returning capital to investors.

The move signals continued confidence in VSE’s financial position as it pursues growth in the aviation aftermarket distribution and repair sector. For income-focused shareholders, the declared payout reinforces VSE’s role as a consistent dividend issuer within the aviation services industry, potentially enhancing the stock’s appeal amid continued demand for aftermarket support.

The most recent analyst rating on (VSEC) stock is a Buy with a $260.00 price target. To see the full list of analyst forecasts on VSE stock, see the VSEC Stock Forecast page.

VSE launches tangible equity units to fund PAG acquisition

On February 2, 2026, VSE Corporation entered into an underwriting agreement to issue 8 million tangible equity units at $50 per unit, granting underwriters a 30-day option for an additional 1.2 million units that was fully exercised on February 3, 2026, bringing the total issuance to 9.2 million units when the offering closed on February 5, 2026 and raised approximately $446.2 million in net proceeds. Each unit consists of a prepaid stock purchase contract and an amortizing note carrying an effective annual cash payment equivalent to 5.75% of the unit’s stated amount, with settlement of the stock component scheduled for February 1, 2029 subject to specified price-based and corporate-event-driven early settlement and redemption features, and the amortizing notes governed by an indenture with customary default protections. VSE plans to use the proceeds from this offering, together with funds from its earlier common stock sale, primarily to finance the cash portion of its acquisition of PAG HoldCo, with flexibility to redeploy the capital to general corporate purposes or debt repayment if the PAG transaction does not close by late October 2026, when the company also gains rights to redeem the purchase contracts under defined merger-termination scenarios. The units have been approved for listing on the Nasdaq Global Select Market under the symbol “VSECU,” adding a new hybrid equity-debt security to VSE’s capital structure and signaling a significant step in funding its strategic expansion in aviation services while imposing a 60-day lock-up on insiders’ sales of certain company securities.

The most recent analyst rating on (VSEC) stock is a Hold with a $211.00 price target. To see the full list of analyst forecasts on VSE stock, see the VSEC Stock Forecast page.

VSE Announces Major Equity Offering to Fund Acquisition

On February 2, 2026, VSE Corporation entered into an underwriting agreement with Jefferies and RBC Capital Markets to sell 3,989,362 shares of common stock at $188 per share, and on February 3, 2026, the underwriters fully exercised their option to purchase an additional 598,404 shares, with the offering scheduled to close on February 4, 2026 and expected to generate about $830.2 million in net proceeds. VSE plans to use the equity raise, together with a concurrent tangible equity unit offering, primarily to fund part of the cash consideration for its previously announced acquisition of PAG HoldCo, while any remaining or redirected proceeds, if the deal does not close, may be used for general corporate purposes or debt repayment; the agreement also includes customary underwriting terms and a 60-day lock-up on share sales by executives and directors, underscoring the company’s capital markets push to support its growth strategy in aviation services.

The most recent analyst rating on (VSEC) stock is a Buy with a $243.00 price target. To see the full list of analyst forecasts on VSE stock, see the VSEC Stock Forecast page.

VSE to Acquire Precision Aviation Group, Expanding Services

On January 29, 2026, VSE Corporation agreed to acquire all of the capital stock of GenNx/PAG IntermediateCo Inc. (PAG Holdco), the parent of Precision Aviation Group, in a stock purchase transaction that remains subject to regulatory approvals and customary closing conditions, signaling a strategic expansion of VSE’s aviation services platform. In connection with this pending deal, VSE has filed PAG’s audited consolidated financial statements for the years ended December 31, 2024 and 2023, along with pro forma financial information, with Baker Tilly US, LLP issuing an unmodified opinion on the 2024 results, validating the reliability of PAG’s reported financial position and operations and providing investors and other stakeholders with greater transparency into the financial profile of the target business ahead of closing.

The most recent analyst rating on (VSEC) stock is a Buy with a $250.00 price target. To see the full list of analyst forecasts on VSE stock, see the VSEC Stock Forecast page.

VSE to Acquire Precision Aviation Group in Transformational Deal

On January 29, 2026, VSE Corporation agreed to acquire Precision Aviation Group (PAG), a GenNx360 Capital Partners portfolio company and global aviation MRO, distribution and supply chain specialist, for approximately $2.025 billion in upfront cash and equity, plus up to $125 million in contingent earnout consideration, financed in part by a new debt commitment of up to $1.95 billion. The deal, which remains subject to regulatory approvals and customary closing conditions, is positioned as a transformational transaction that will significantly expand VSE’s scale, engine and component service capabilities and proprietary repair content, create a combined network of about 60 locations worldwide, increase pro forma 2025 aviation revenue by roughly 50%, and is expected to be immediately accretive to margins and drive VSE’s consolidated adjusted EBITDA margin above 20% over the next few years as synergies and integration initiatives are realized, enhancing diversification and resilience across commercial, B&GA, rotorcraft, cargo, OEM and defense end markets.

The most recent analyst rating on (VSEC) stock is a Buy with a $238.00 price target. To see the full list of analyst forecasts on VSE stock, see the VSEC Stock Forecast page.