AAR CORP (AIR) Stock Fundamental Analysis
NYSE:AIR - New York Stock Exchange, Inc. - US0003611052 - Common Stock - Currency: USD
Overall AIR gets a fundamental rating of 4 out of 10. We evaluated AIR against 65 industry peers in the Aerospace & Defense industry. AIR has a medium profitability rating, but doesn't score so well on its financial health evaluation. AIR has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
AIR had positive earnings in the past year.
In the past year AIR had a positive cash flow from operations.
AIR had positive earnings in each of the past 5 years.
AIR had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of AIR (-0.44%) is worse than 63.08% of its industry peers.
AIR has a Return On Equity of -1.07%. This is in the lower half of the industry: AIR underperforms 60.00% of its industry peers.
The Return On Invested Capital of AIR (7.16%) is better than 63.08% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AIR is in line with the industry average of 8.39%.
The last Return On Invested Capital (7.16%) for AIR is above the 3 year average (6.62%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.44% | ||
| ROE | -1.07% | ||
| ROIC | 7.16% |
ROA(3y)3.83%
ROA(5y)2.8%
ROE(3y)6.5%
ROE(5y)4.72%
ROIC(3y)6.62%
ROIC(5y)5.45%
1.3 Margins
AIR's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 8.05%, AIR perfoms like the industry average, outperforming 56.92% of the companies in the same industry.
In the last couple of years the Operating Margin of AIR has grown nicely.
With a Gross Margin value of 18.82%, AIR is not doing good in the industry: 70.77% of the companies in the same industry are doing better.
AIR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.05% | ||
| PM (TTM) | N/A | ||
| GM | 18.82% |
OM growth 3Y13.73%
OM growth 5Y9.68%
PM growth 3Y-2.68%
PM growth 5Y41.67%
GM growth 3Y4.53%
GM growth 5Y3.5%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AIR is destroying value.
Compared to 1 year ago, AIR has more shares outstanding
AIR has more shares outstanding than it did 5 years ago.
AIR has a worse debt/assets ratio than last year.
2.2 Solvency
AIR has an Altman-Z score of 2.94. This is not the best score and indicates that AIR is in the grey zone with still only limited risk for bankruptcy at the moment.
AIR has a Altman-Z score (2.94) which is in line with its industry peers.
A Debt/Equity ratio of 0.86 indicates that AIR is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.86, AIR is doing worse than 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.94 |
ROIC/WACC0.72
WACC9.94%
2.3 Liquidity
AIR has a Current Ratio of 2.82. This indicates that AIR is financially healthy and has no problem in meeting its short term obligations.
AIR's Current ratio of 2.82 is in line compared to the rest of the industry. AIR outperforms 58.46% of its industry peers.
A Quick Ratio of 1.39 indicates that AIR should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.39, AIR perfoms like the industry average, outperforming 50.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.70% over the past year.
Measured over the past 5 years, AIR shows a small growth in Earnings Per Share. The EPS has been growing by 5.34% on average per year.
The Revenue has grown by 21.07% in the past year. This is a very strong growth!
AIR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.48% yearly.
EPS 1Y (TTM)10.7%
EPS 3Y35.99%
EPS 5Y5.34%
EPS Q2Q%16.47%
Revenue 1Y (TTM)21.07%
Revenue growth 3Y11.96%
Revenue growth 5Y2.48%
Sales Q2Q%19.55%
3.2 Future
Based on estimates for the next years, AIR will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.14% on average per year.
Based on estimates for the next years, AIR will show a small growth in Revenue. The Revenue will grow by 3.31% on average per year.
EPS Next Y14.32%
EPS Next 2Y16.8%
EPS Next 3Y16.14%
EPS Next 5YN/A
Revenue Next Year17.19%
Revenue Next 2Y10.98%
Revenue Next 3Y8.98%
Revenue Next 5Y3.31%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 18.84, which indicates a rather expensive current valuation of AIR.
89.23% of the companies in the same industry are more expensive than AIR, based on the Price/Earnings ratio.
AIR's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.55.
The Price/Forward Earnings ratio is 15.06, which indicates a correct valuation of AIR.
AIR's Price/Forward Earnings ratio is rather cheap when compared to the industry. AIR is cheaper than 93.85% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of AIR to the average of the S&P500 Index (22.40), we can say AIR is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.84 | ||
| Fwd PE | 15.06 |
4.2 Price Multiples
93.85% of the companies in the same industry are more expensive than AIR, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.41 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as AIR's earnings are expected to grow with 16.14% in the coming years.
PEG (NY)1.32
PEG (5Y)3.53
EPS Next 2Y16.8%
EPS Next 3Y16.14%
5. Dividend
5.1 Amount
AIR does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
68.21
+0.44 (+0.65%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners98.47%
Inst Owner Change-0.32%
Ins Owners2.44%
Ins Owner Change-1.25%
Market Cap2.46B
Analysts82
Price Target79.22 (16.14%)
Short Float %2.04%
Short Ratio2.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.76%
Min EPS beat(2)1.68%
Max EPS beat(2)5.83%
EPS beat(4)4
Avg EPS beat(4)3.21%
Min EPS beat(4)1.68%
Max EPS beat(4)5.83%
EPS beat(8)8
Avg EPS beat(8)3.65%
EPS beat(12)12
Avg EPS beat(12)3.95%
EPS beat(16)14
Avg EPS beat(16)3.65%
Revenue beat(2)1
Avg Revenue beat(2)-0.05%
Min Revenue beat(2)-3.93%
Max Revenue beat(2)3.84%
Revenue beat(4)2
Avg Revenue beat(4)0.01%
Min Revenue beat(4)-3.93%
Max Revenue beat(4)3.84%
Revenue beat(8)4
Avg Revenue beat(8)0.7%
Revenue beat(12)7
Avg Revenue beat(12)1.07%
Revenue beat(16)10
Avg Revenue beat(16)1.11%
PT rev (1m)0%
PT rev (3m)-3.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.63%
EPS NY rev (1m)0%
EPS NY rev (3m)0.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.83%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.84 | ||
| Fwd PE | 15.06 | ||
| P/S | 0.92 | ||
| P/FCF | N/A | ||
| P/OCF | 267.65 | ||
| P/B | 2.08 | ||
| P/tB | 5.72 | ||
| EV/EBITDA | 12.41 |
EPS(TTM)3.62
EY5.31%
EPS(NY)4.53
Fwd EY6.64%
FCF(TTM)-0.64
FCFYN/A
OCF(TTM)0.25
OCFY0.37%
SpS74.31
BVpS32.76
TBVpS11.93
PEG (NY)1.32
PEG (5Y)3.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.44% | ||
| ROE | -1.07% | ||
| ROCE | 9.33% | ||
| ROIC | 7.16% | ||
| ROICexc | 7.43% | ||
| ROICexgc | 11.22% | ||
| OM | 8.05% | ||
| PM (TTM) | N/A | ||
| GM | 18.82% | ||
| FCFM | N/A |
ROA(3y)3.83%
ROA(5y)2.8%
ROE(3y)6.5%
ROE(5y)4.72%
ROIC(3y)6.62%
ROIC(5y)5.45%
ROICexc(3y)6.91%
ROICexc(5y)5.8%
ROICexgc(3y)8.82%
ROICexgc(5y)7.13%
ROCE(3y)8.62%
ROCE(5y)7.1%
ROICexcg growth 3Y14.12%
ROICexcg growth 5Y4.68%
ROICexc growth 3Y2.34%
ROICexc growth 5Y-1.64%
OM growth 3Y13.73%
OM growth 5Y9.68%
PM growth 3Y-2.68%
PM growth 5Y41.67%
GM growth 3Y4.53%
GM growth 5Y3.5%
F-Score2
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.75 | ||
| Cap/Depr | 56.69% | ||
| Cap/Sales | 1.2% | ||
| Interest Coverage | 3.47 | ||
| Cash Conversion | 3.37% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.39 | ||
| Altman-Z | 2.94 |
F-Score2
WACC9.94%
ROIC/WACC0.72
Cap/Depr(3y)76.7%
Cap/Depr(5y)63.04%
Cap/Sales(3y)1.24%
Cap/Sales(5y)1.11%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)10.7%
EPS 3Y35.99%
EPS 5Y5.34%
EPS Q2Q%16.47%
EPS Next Y14.32%
EPS Next 2Y16.8%
EPS Next 3Y16.14%
EPS Next 5YN/A
Revenue 1Y (TTM)21.07%
Revenue growth 3Y11.96%
Revenue growth 5Y2.48%
Sales Q2Q%19.55%
Revenue Next Year17.19%
Revenue Next 2Y10.98%
Revenue Next 3Y8.98%
Revenue Next 5Y3.31%
EBIT growth 1Y46.27%
EBIT growth 3Y27.33%
EBIT growth 5Y12.39%
EBIT Next Year65.14%
EBIT Next 3Y25.93%
EBIT Next 5YN/A
FCF growth 1Y-101.75%
FCF growth 3Y-47.1%
FCF growth 5Y-22.59%
OCF growth 1Y-49.45%
OCF growth 3Y-25.44%
OCF growth 5Y-8.34%