VSE (VSEC) AI Stock Analysis

• Market Cap: $6.26B
• Dividend Yield: 0.22%
• Average Volume (3M): 561.51K
• Price to Earnings (P/E): 167.6
• Beta (1Y): 1.24
• Revenue Growth: 9.22%
• EPS Growth: 65.05%
• Country: US
• Employees: 1,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.99
• Shares Outstanding: 28,797,358
• 10 Day Avg. Volume: 554,886
• 30 Day Avg. Volume: 561,512
• PEG Ratio: -0.81
• Price to Book (P/B): 1.72
• Price to Sales (P/S): 1.57
• P/FCF Ratio: -32.86
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 4.62
• Enterprise Value/Gross Profit: 41.32
• Enterprise Value/Ebitda: 41.51
• 1Y Price Target: $239.20
• Price Target Upside: 5.01% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: $211.00 ▼(-7.37% Downside)
• Action: Downgraded Date: 02/04/26
• Date: Action: Downgraded 02/04/26

The score is primarily supported by solid financial positioning (low leverage and growth) and a strong earnings call with raised guidance and improving leverage. Offsetting factors are a very expensive valuation (high P/E, low yield) and only mixed near-term technical signals, with corporate events supportive but carrying financing/dilution and integration execution risk.

Positive Factors

Balance-sheet strength

VSE's very low debt-to-equity (0.046) and improved adjusted net leverage (~2x) provide durable financial flexibility to fund organic investments, acquisitions and working capital needs. This reduces refinancing risk and supports multi-quarter strategic initiatives and M&A execution.

Margin and EBITDA momentum

Sustained double-digit adjusted EBITDA expansion and upgraded Aviation margin guidance signal improving mix and operational leverage. Higher-margin MRO and aviation services can sustainably raise consolidated profitability if maintained, improving cash generation over months to years.

Strategic M&A expands scale

The PAG acquisition materially enlarges VSE's aviation footprint, adding scale, complementary engine/component capabilities and distribution reach. If integration realizes synergies, scale can drive durable margin improvement, customer diversification and higher recurring service revenue.

Negative Factors

Thin historical profitability

Despite recent EBITDA progress, historically low net and gross margins indicate limited cushion against cyclical revenue swings and cost pressure. Sustaining margin improvements requires execution on pricing, mix and cost controls across divisions for durable profit uplift.

Financing and dilution risk

Funding the transformational PAG deal via large equity offers and a substantial bridge/term financing increases dilution and raises execution risk. Over the medium term, capital structure changes and investor lockups may constrain flexibility and heighten integration scrutiny.

Cash conversion gaps

Operating cash conversion lags earnings, indicating working capital or timing issues that can limit usable cash for deleveraging or capex. Even with strong FCF growth recently, lower conversion ratios pose a structural risk to sustained internal funding of growth and M&A.

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 generates revenue through multiple streams, primarily by offering services in maintenance, repair, and overhaul (MRO) for military and commercial aircraft, as well as providing logistics and supply chain management services. The company earns income from government contracts, which often involve long-term agreements for support and maintenance of defense systems. Additionally, VSE benefits from partnerships with various defense and aerospace entities, which can enhance its service offerings and market reach. The company also generates revenue through the sale of parts and equipment related to its services, and by acquiring complementary businesses that add to its capabilities and customer base.

VSE Financial Statement Overview

Summary

Solid fundamentals supported by revenue growth (7.69% TTM) and very low debt-to-equity (0.046), but profitability is thin (net margin 1.01%, gross margin 8.12%) and cash flow conversion vs. earnings is only moderate (operating cash flow to net income 0.24).

Income Statement

VSE's income statement shows a positive trajectory with a revenue growth rate of 7.69% in the TTM period, indicating strong sales performance. However, the gross profit margin has decreased over time, currently at 8.12%, which is below industry averages, suggesting potential cost management issues. The net profit margin is modest at 1.01%, reflecting limited profitability. Despite these challenges, the EBIT and EBITDA margins are relatively stable, indicating operational efficiency.

Balance Sheet

The balance sheet reflects a strong financial position with a low debt-to-equity ratio of 0.046 in the TTM period, showcasing effective leverage management. The equity ratio is healthy, indicating a solid asset base supported by equity. However, the return on equity has decreased to 1.14%, suggesting room for improvement in generating returns for shareholders.

Cash Flow

Cash flow analysis reveals significant improvement in free cash flow, with a growth rate of 102.35% in the TTM period. The operating cash flow to net income ratio is 0.24, indicating moderate cash generation relative to earnings. However, the free cash flow to net income ratio of 0.60 suggests that cash flow generation is not fully aligned with profitability, highlighting potential cash management challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.11B	1.08B	860.49M	669.45M	750.85M	661.66M
Gross Profit	124.17M	108.20M	95.61M	57.24M	25.14M	57.88M
EBITDA	123.60M	110.18M	111.41M	78.21M	47.12M	38.06M
Net Income	26.58M	30.52M	39.13M	28.06M	7.97M	-5.17M
Balance Sheet
Total Assets	1.56B	1.73B	1.35B	999.79M	918.56M	780.08M
Cash, Cash Equivalents and Short-Term Investments	8.78M	29.03M	7.77M	305.00K	518.00K	378.00K
Total Debt	431.31M	485.21M	459.26M	308.64M	317.73M	277.92M
Total Liabilities	577.11M	746.43M	733.61M	550.26M	501.23M	423.76M
Stockholders Equity	983.34M	988.19M	616.73M	449.53M	417.33M	356.32M
Cash Flow
Free Cash Flow	26.95M	-51.74M	-40.49M	-3.16M	-28.12M	31.33M
Operating Cash Flow	44.72M	-31.04M	-21.83M	8.05M	-17.60M	35.76M
Investing Cash Flow	-99.58M	-263.67M	-235.69M	-2.38M	-61.63M	20.22M
Financing Cash Flow	55.74M	315.81M	264.97M	-5.71M	79.37M	-56.34M

VSE Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 227.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VSEC, the sentiment is Positive. The current price of 227.78 is above the 20-day moving average (MA) of 207.42, above the 50-day MA of 195.52, and above the 200-day MA of 163.51, indicating a bullish trend. The MACD of 5.91 indicates Negative momentum. The RSI at 65.33 is Neutral, neither overbought nor oversold. The STOCH value of 93.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VSEC.

VSE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VVX	71 Outperform	$2.18B	28.11	7.70%	―	5.10%	774.57%
VSEC	66 Neutral	$6.26B	167.59	5.28%	0.22%	9.22%	65.05%
DCO	65 Neutral	$1.85B	-54.00	-5.27%	―	3.16%	-213.56%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AIR	59 Neutral	$4.54B	44.96	6.86%	―	17.59%	-56.15%
MRCY	55 Neutral	$5.20B	-173.88	-2.08%	―	8.63%	72.72%

VSE Corporate Events

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.

VSE Declares Quarterly Dividend Amid Shareholder Focus

On November 19, 2025, VSE Corporation announced that its Board of Directors declared a quarterly cash dividend of $0.10 per share, approved on November 18, 2025. The dividend will be paid on January 29, 2026, to stockholders of record as of January 15, 2026. This decision reflects VSE’s ongoing commitment to providing value to its shareholders and may positively impact the company’s market positioning by reinforcing investor confidence.

The most recent analyst rating on (VSEC) stock is a Buy with a $209.00 price target. To see the full list of analyst forecasts on VSE stock, see the VSEC Stock Forecast page.