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 5 out of 10. We evaluated AIR against 67 industry peers in the Aerospace & Defense industry. AIR has only an average score on both its financial health and profitability. AIR has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year AIR was profitable.
In the past year AIR had a positive cash flow from operations.
In the past 5 years AIR has always been profitable.
In the past 5 years AIR always reported a positive cash flow from operatings.
1.2 Ratios
AIR's Return On Assets of 0.43% is in line compared to the rest of the industry. AIR outperforms 40.30% of its industry peers.
AIR has a Return On Equity (1.02%) which is comparable to the rest of the industry.
AIR's Return On Invested Capital of 8.72% is fine compared to the rest of the industry. AIR outperforms 76.12% of its industry peers.
AIR had an Average Return On Invested Capital over the past 3 years of 7.36%. This is in line with the industry average of 8.40%.
The last Return On Invested Capital (8.72%) for AIR is above the 3 year average (7.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.43% | ||
| ROE | 1.02% | ||
| ROIC | 8.72% |
ROA(3y)2.32%
ROA(5y)2.84%
ROE(3y)4.33%
ROE(5y)4.83%
ROIC(3y)7.36%
ROIC(5y)6.95%
1.3 Margins
Looking at the Profit Margin, with a value of 0.44%, AIR is in line with its industry, outperforming 41.79% of the companies in the same industry.
AIR's Profit Margin has improved in the last couple of years.
The Operating Margin of AIR (9.09%) is better than 61.19% of its industry peers.
AIR's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 18.98%, AIR is doing worse than 68.66% of the companies in the same industry.
In the last couple of years the Gross Margin of AIR has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.09% | ||
| PM (TTM) | 0.44% | ||
| GM | 18.98% |
OM growth 3Y14.65%
OM growth 5Y34.25%
PM growth 3Y-52.86%
PM growth 5Y16.72%
GM growth 3Y3.32%
GM growth 5Y7.87%
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
Compared to 5 years ago, AIR has more shares outstanding
The debt/assets ratio for AIR has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.11 indicates that AIR is not in any danger for bankruptcy at the moment.
The Altman-Z score of AIR (3.11) is comparable to the rest of the industry.
AIR has a debt to FCF ratio of 691.43. This is a negative value and a sign of low solvency as AIR would need 691.43 years to pay back of all of its debts.
AIR has a Debt to FCF ratio of 691.43. This is comparable to the rest of the industry: AIR outperforms 50.75% of its industry peers.
AIR has a Debt/Equity ratio of 0.80. This is a neutral value indicating AIR is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.80, AIR is not doing good in the industry: 68.66% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 691.43 | ||
| Altman-Z | 3.11 |
ROIC/WACC0.86
WACC10.11%
2.3 Liquidity
AIR has a Current Ratio of 2.72. This indicates that AIR is financially healthy and has no problem in meeting its short term obligations.
AIR has a Current ratio (2.72) which is in line with its industry peers.
AIR has a Quick Ratio of 1.26. 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 1.26. This is comparable to the rest of the industry: AIR outperforms 43.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.72 | ||
| Quick Ratio | 1.26 |
3. Growth
3.1 Past
AIR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.47%, which is quite good.
The Earnings Per Share has been growing by 12.75% on average over the past years. This is quite good.
AIR shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.91%.
AIR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.06% yearly.
EPS 1Y (TTM)17.47%
EPS 3Y17.57%
EPS 5Y12.75%
EPS Q2Q%31.82%
Revenue 1Y (TTM)19.91%
Revenue growth 3Y15.17%
Revenue growth 5Y6.06%
Sales Q2Q%14.93%
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 15.49% on average per year.
The Revenue is expected to grow by 1.07% on average over the next years.
EPS Next Y16.12%
EPS Next 2Y15.49%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year6.44%
Revenue Next 2Y6.44%
Revenue Next 3Y-1.47%
Revenue Next 5Y1.07%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 18.86 indicates a rather expensive valuation of AIR.
Based on the Price/Earnings ratio, AIR is valued cheaply inside the industry as 92.54% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.24. AIR is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 16.24, which indicates a correct valuation of AIR.
91.04% of the companies in the same industry are more expensive than AIR, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.42, AIR is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.86 | ||
| Fwd PE | 16.24 |
4.2 Price Multiples
AIR's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. AIR is cheaper than 98.51% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AIR is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 1883.15 | ||
| EV/EBITDA | 11.33 |
4.3 Compensation for Growth
AIR's 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 15.49% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.17
PEG (5Y)1.48
EPS Next 2Y15.49%
EPS Next 3YN/A
5. Dividend
5.1 Amount
AIR does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
73.54
+0.55 (+0.75%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners98.27%
Inst Owner Change-0.55%
Ins Owners2.28%
Ins Owner Change1.68%
Market Cap2.64B
Analysts82
Price Target81.35 (10.62%)
Short Float %2.35%
Short Ratio2.37
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)7.92%
Min EPS beat(2)1.68%
Max EPS beat(2)14.17%
EPS beat(4)4
Avg EPS beat(4)6.08%
Min EPS beat(4)1.68%
Max EPS beat(4)14.17%
EPS beat(8)8
Avg EPS beat(8)4.72%
EPS beat(12)12
Avg EPS beat(12)4.59%
EPS beat(16)15
Avg EPS beat(16)4.56%
Revenue beat(2)1
Avg Revenue beat(2)1.72%
Min Revenue beat(2)-3.93%
Max Revenue beat(2)7.38%
Revenue beat(4)3
Avg Revenue beat(4)2.19%
Min Revenue beat(4)-3.93%
Max Revenue beat(4)7.38%
Revenue beat(8)4
Avg Revenue beat(8)1.25%
Revenue beat(12)7
Avg Revenue beat(12)1.39%
Revenue beat(16)10
Avg Revenue beat(16)1.41%
PT rev (1m)2.68%
PT rev (3m)2.68%
EPS NQ rev (1m)-3.27%
EPS NQ rev (3m)-3.27%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-0.4%
Revenue NQ rev (3m)-0.4%
Revenue NY rev (1m)1.28%
Revenue NY rev (3m)1.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.86 | ||
| Fwd PE | 16.24 | ||
| P/S | 0.95 | ||
| P/FCF | 1883.15 | ||
| P/OCF | 73.03 | ||
| P/B | 2.18 | ||
| P/tB | 5.72 | ||
| EV/EBITDA | 11.33 |
EPS(TTM)3.9
EY5.3%
EPS(NY)4.53
Fwd EY6.16%
FCF(TTM)0.04
FCFY0.05%
OCF(TTM)1.01
OCFY1.37%
SpS77.56
BVpS33.8
TBVpS12.86
PEG (NY)1.17
PEG (5Y)1.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.43% | ||
| ROE | 1.02% | ||
| ROCE | 11.04% | ||
| ROIC | 8.72% | ||
| ROICexc | 9.11% | ||
| ROICexgc | 13.84% | ||
| OM | 9.09% | ||
| PM (TTM) | 0.44% | ||
| GM | 18.98% | ||
| FCFM | 0.05% |
ROA(3y)2.32%
ROA(5y)2.84%
ROE(3y)4.33%
ROE(5y)4.83%
ROIC(3y)7.36%
ROIC(5y)6.95%
ROICexc(3y)7.68%
ROICexc(5y)7.26%
ROICexgc(3y)10.94%
ROICexgc(5y)9.53%
ROCE(3y)9.32%
ROCE(5y)8.8%
ROICexcg growth 3Y18.86%
ROICexcg growth 5Y36.52%
ROICexc growth 3Y7.16%
ROICexc growth 5Y28.07%
OM growth 3Y14.65%
OM growth 5Y34.25%
PM growth 3Y-52.86%
PM growth 5Y16.72%
GM growth 3Y3.32%
GM growth 5Y7.87%
F-Score6
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 691.43 | ||
| Debt/EBITDA | 3.14 | ||
| Cap/Depr | 62.86% | ||
| Cap/Sales | 1.25% | ||
| Interest Coverage | 3.4 | ||
| Cash Conversion | 11.72% | ||
| Profit Quality | 11.38% | ||
| Current Ratio | 2.72 | ||
| Quick Ratio | 1.26 | ||
| Altman-Z | 3.11 |
F-Score6
WACC10.11%
ROIC/WACC0.86
Cap/Depr(3y)80.23%
Cap/Depr(5y)64.82%
Cap/Sales(3y)1.34%
Cap/Sales(5y)1.13%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)17.47%
EPS 3Y17.57%
EPS 5Y12.75%
EPS Q2Q%31.82%
EPS Next Y16.12%
EPS Next 2Y15.49%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)19.91%
Revenue growth 3Y15.17%
Revenue growth 5Y6.06%
Sales Q2Q%14.93%
Revenue Next Year6.44%
Revenue Next 2Y6.44%
Revenue Next 3Y-1.47%
Revenue Next 5Y1.07%
EBIT growth 1Y76.29%
EBIT growth 3Y32.05%
EBIT growth 5Y42.38%
EBIT Next Year36.78%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-89.93%
FCF growth 3Y-71.08%
FCF growth 5YN/A
OCF growth 1Y-17.2%
OCF growth 3Y-21.7%
OCF growth 5YN/A