VSE (VSEC)
NASDAQ:VSEC
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VSE
(NASDAQ:VSEC)
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Rating:52Neutral
Price Target:
$186.00
▲(0.06% Upside)
Action:ReiteratedDate:04/01/26
The score is held back most by weak/volatile cash flow and poor cash conversion, plus bearish technical momentum. These are partially offset by a much improved balance sheet and upbeat 2026 guidance for strong growth and steady margins, but the high P/E and low dividend yield leave limited valuation support.
Positive Factors
Materially improved balance sheet (very low leverage)
VSE's sharp reduction in leverage to roughly 0.04 by 2025 creates durable financial flexibility. A conservative capital structure supports investment in MRO capacity, funds strategic M&A, underpins dividend payments, and provides a buffer through aerospace cycles without immediate refinancing pressure.
Negative Factors
Weak and volatile cash generation
Repeated negative operating cash flow years and 2025's low cash conversion (OCF ≈11% of net income) indicate earnings are not consistently backed by cash. This limits self-funding ability for inventory, capex and M&A, raises working-capital sensitivity, and reduces margin of error during downturns.
Read all positive and negative factors
Positive Factors
Negative Factors
Materially improved balance sheet (very low leverage)
VSE's sharp reduction in leverage to roughly 0.04 by 2025 creates durable financial flexibility. A conservative capital structure supports investment in MRO capacity, funds strategic M&A, underpins dividend payments, and provides a buffer through aerospace cycles without immediate refinancing pressure.
Read all positive factors
VSE (VSEC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.35B
Dividend Yield0.22%
Average Volume (3M)811.75K
Price to Earnings (P/E)72.4
Beta (1Y)1.36
Revenue Growth9.22%
EPS Growth65.05%
CountryUS
Employees1,400
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)1.16
Shares Outstanding28,055,393
10 Day Avg. Volume1,206,591
30 Day Avg. Volume811,749
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 Cap0.79
Enterprise Value/Revenue3.78
Enterprise Value/Gross Profit31.81
Enterprise Value/Ebitda32.27
Forecast
1Y Price Target
$253.29Price Target Upside36.26% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)4.17
Revenue Forecast (FY)$1.35B
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:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call communicated strong operational and financial momentum: record revenue and profitability in 2025, meaningful organic growth, improved leverage, and strategic acquisitions (Aero 3, Turbine Weld, announced PAG) that expand scale, proprietary content and margin potential. Management provided bullish 2026 revenue guidance (19%–23%) and margin stability while acknowledging timing-related headwinds: a sizable inventory build (~$45M) and Q1 margin compression, near-term free cash flow pressure, increased leverage following the PAG acquisition, labor constraints for MRO capacity expansion, and integration execution risks. On balance, the positive financial results, clear strategic rationale for acquisitions, synergy targets, and guidance for continued organic outperformance materially outweigh the near-term cash, leverage and execution headwinds, supporting a constructive outlook.Positive Updates
Record Annual Revenue and Transformation Completion
Full year 2025 aviation revenue of approximately $1.1 billion, up 41% year-over-year, marking the first time VSE surpassed $1 billion in annual revenue after completing the transition to a pure-play aviation aftermarket company.
Negative Updates
Large PAG Acquisition Increases Financing and Integration Risk
PAG purchase price of ≈$2.025 billion will be funded with ~$1.28 billion of recent equity proceeds and permanent debt financing to be finalized; pro forma adjusted net leverage expected to be below 3x after close (up from 1.1x currently), introducing near-term leverage and execution risk tied to integration and synergy realization.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Annual Revenue and Transformation Completion
Full year 2025 aviation revenue of approximately $1.1 billion, up 41% year-over-year, marking the first time VSE surpassed $1 billion in annual revenue after completing the transition to a pure-play aviation aftermarket company.
Read all positive updates
Company Guidance
VSE guided full‑year 2026 consolidated revenue to increase 19–23% year‑over‑year (the PAG acquisition is excluded from this outlook), with Aero 3 and Turbine Weld expected to contribute roughly 11–13% of that growth and organic growth targeted in the high single‑digit to low double‑digit range; revenue is forecast to increase sequentially through the year. Adjusted EBITDA margin is guided to 16.8–17.3% (Aero 3/Turbine Weld accretive by ~40 basis points and core operating leverage, program optimization and improved MRO utilization expected to add up to ~50 basis points), with Q1 margins down sequentially but up year‑over‑year. The new APU life‑of‑program distribution agreement requires about $45 million of initial inventory/working capital, which will weigh on free cash flow in Q1 and for FY2026 (excluding that investment, management expects stronger free cash flow than 2025). Other modeling assumptions: interest expense ≈ $20M, depreciation & amortization $52–54M, effective tax rate ≈ 25%, stock‑based compensation $15–16M, and capital expenditures ≈ 2% of revenue; PAG is expected to close in late Q2 and, after close and permanent financing, adjusted net leverage is expected to be below 3x (year‑end 2025 adjusted net leverage was 1.1x).VSE Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
74
Positive
Cash Flow
38
Negative
| 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
Positive
185.89
Price Trends
202.41
Negative
191.79
Negative
173.71
Positive
Market Momentum
-6.45
Negative
49.60
Neutral
80.41
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 185.89 is below the 20-day moving average (MA) of 188.34, below the 50-day MA of 202.41, and above the 200-day MA of 173.71, indicating a neutral trend. The MACD of -6.45 indicates Negative momentum. The RSI at 49.60 is Neutral, neither overbought nor oversold. The STOCH value of 80.41 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $4.53B | 16.28 | 12.07% | ― | 17.59% | -56.15% | |
68 Neutral | $2.20B | 22.10 | 7.30% | ― | 5.10% | 774.57% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | $1.95B | -41.88 | -5.01% | ― | 3.16% | -213.56% | |
55 Neutral | $4.55B | -73.03 | -2.08% | ― | 8.63% | 72.72% | |
52 Neutral | $5.35B | 72.43 | 2.24% | 0.22% | 9.22% | 65.05% |
* Industrials Sector Average
VSEC
VSE
185.89
79.60
74.88%
AIR
AAR
113.86
65.30
134.47%
DCO
Ducommun
134.40
80.90
151.21%
MRCY
Mercury Systems
77.53
34.57
80.47%
VVX
V2X
70.91
25.25
55.30%
VSE Corporate Events
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...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
VSE launches tangible equity units to fund PAG acquisition
Positive
Feb 5, 2026
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,...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
VSE Announces Major Equity Offering to Fund Acquisition
Positive
Feb 4, 2026
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 t...
Business Operations and StrategyFinancial DisclosuresM&A TransactionsRegulatory Filings and Compliance
VSE to Acquire Precision Aviation Group, Expanding Services
Positive
Feb 2, 2026
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...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
VSE to Acquire Precision Aviation Group in Transformational Deal
Positive
Jan 29, 2026
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 cas...
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.