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AAR CORP (AIR)

US0003611052 - Common Stock

69.5  +0.18 (+0.26%)

After market: 69.5 0 (0%)

Fundamental Rating

5

AIR gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 64 industry peers in the Aerospace & Defense industry. Both the profitability and the financial health of AIR get a neutral evaluation. Nothing too spectacular is happening here. AIR has a correct valuation and a medium growth rate.



6

1. Profitability

1.1 Basic Checks

In the past year AIR was profitable.
In the past year AIR has reported a negative cash flow from operations.
In the past 5 years AIR has always been profitable.
Of the past 5 years AIR 4 years had a positive operating cash flow.

1.2 Ratios

AIR's Return On Assets of 3.38% is in line compared to the rest of the industry. AIR outperforms 58.73% of its industry peers.
AIR's Return On Equity of 5.89% is in line compared to the rest of the industry. AIR outperforms 58.73% of its industry peers.
AIR has a Return On Invested Capital of 6.93%. This is in the better half of the industry: AIR outperforms 73.02% of its industry peers.
AIR had an Average Return On Invested Capital over the past 3 years of 6.28%. This is in line with the industry average of 7.61%.
The last Return On Invested Capital (6.93%) for AIR is above the 3 year average (6.28%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 3.38%
ROE 5.89%
ROIC 6.93%
ROA(3y)4.04%
ROA(5y)2.56%
ROE(3y)6.43%
ROE(5y)4.11%
ROIC(3y)6.28%
ROIC(5y)5.41%

1.3 Margins

The Profit Margin of AIR (3.16%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of AIR has grown nicely.
The Operating Margin of AIR (6.95%) is better than 60.32% of its industry peers.
In the last couple of years the Operating Margin of AIR has grown nicely.
The Gross Margin of AIR (18.60%) is worse than 60.32% of its industry peers.
AIR's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 6.95%
PM (TTM) 3.16%
GM 18.6%
OM growth 3Y48.93%
OM growth 5Y6.96%
PM growth 3Y178.36%
PM growth 5Y39.15%
GM growth 3Y12.69%
GM growth 5Y1.99%

5

2. Health

2.1 Basic Checks

AIR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
AIR has less shares outstanding than it did 1 year ago.
AIR has more shares outstanding than it did 5 years ago.
AIR has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 4.24 indicates that AIR is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.24, AIR is in the better half of the industry, outperforming 76.19% of the companies in the same industry.
A Debt/Equity ratio of 0.27 indicates that AIR is not too dependend on debt financing.
AIR has a Debt to Equity ratio of 0.27. This is in the better half of the industry: AIR outperforms 66.67% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.27
Debt/FCF N/A
Altman-Z 4.24
ROIC/WACC0.73
WACC9.53%

2.3 Liquidity

AIR has a Current Ratio of 3.07. This indicates that AIR is financially healthy and has no problem in meeting its short term obligations.
AIR has a better Current ratio (3.07) than 73.02% of its industry peers.
AIR has a Quick Ratio of 1.51. This is a normal value and indicates that AIR is financially healthy and should not expect problems in meeting its short term obligations.
AIR has a Quick ratio of 1.51. This is in the better half of the industry: AIR outperforms 60.32% of its industry peers.
Industry RankSector Rank
Current Ratio 3.07
Quick Ratio 1.51

6

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 22.49% over the past year.
Measured over the past years, AIR shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.78% on average per year.
AIR shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.61%.
AIR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.63% yearly.
EPS 1Y (TTM)22.49%
EPS 3Y10.41%
EPS 5Y11.78%
EPS growth Q2Q27.87%
Revenue 1Y (TTM)15.61%
Revenue growth 3Y-1.33%
Revenue growth 5Y2.63%
Revenue growth Q2Q23.17%

3.2 Future

Based on estimates for the next years, AIR will show a very strong growth in Earnings Per Share. The EPS will grow by 22.34% on average per year.
The Revenue is expected to grow by 5.74% on average over the next years.
EPS Next Y20.99%
EPS Next 2Y22.34%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year16.4%
Revenue Next 2Y11.83%
Revenue Next 3Y5.88%
Revenue Next 5Y5.74%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

5

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 22.79, the valuation of AIR can be described as rather expensive.
AIR's Price/Earnings ratio is a bit cheaper when compared to the industry. AIR is cheaper than 76.19% of the companies in the same industry.
AIR is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 24.54, which is the current average of the S&P500 Index.
AIR is valuated correctly with a Price/Forward Earnings ratio of 16.12.
85.71% of the companies in the same industry are more expensive than AIR, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.22. AIR is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 22.79
Fwd PE 16.12

4.2 Price Multiples

73.02% of the companies in the same industry are more expensive than AIR, based on the Enterprise Value to EBITDA ratio.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 15.36

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
AIR has a very decent profitability rating, which may justify a higher PE ratio.
AIR's earnings are expected to grow with 22.34% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.09
PEG (5Y)1.93
EPS Next 2Y22.34%
EPS Next 3YN/A

0

5. Dividend

5.1 Amount

No dividends for AIR!.
Industry RankSector Rank
Dividend Yield N/A

AAR CORP

NYSE:AIR (12/8/2023, 7:04:00 PM)

After market: 69.5 0 (0%)

69.5

+0.18 (+0.26%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap2.45B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield N/A
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 22.79
Fwd PE 16.12
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.09
PEG (5Y)1.93
Profitability
Industry RankSector Rank
ROA 3.38%
ROE 5.89%
ROCE
ROIC
ROICexc
ROICexgc
OM 6.95%
PM (TTM) 3.16%
GM 18.6%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.07
Health
Industry RankSector Rank
Debt/Equity 0.27
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 3.07
Quick Ratio 1.51
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)22.49%
EPS 3Y10.41%
EPS 5Y
EPS growth Q2Q
EPS Next Y20.99%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)15.61%
Revenue growth 3Y-1.33%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y