AAR CORP (AIR) Stock Fundamental Analysis
NYSE:AIR - US0003611052 - Common Stock
76.19 USD
-0.6 (-0.78%)
Taking everything into account, AIR scores 5 out of 10 in our fundamental rating. AIR was compared to 68 industry peers in the Aerospace & Defense industry. AIR has an average financial health and profitability rating. AIR is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AIR was profitable.
AIR had a positive operating cash flow in the past year.
AIR had positive earnings in each of the past 5 years.
AIR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AIR has a Return On Assets (0.43%) which is in line with its industry peers.
AIR has a Return On Equity (1.02%) which is in line with its industry peers.
AIR has a Return On Invested Capital of 8.72%. This is in the better half of the industry: AIR outperforms 77.94% 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 44.12% of the companies in the same industry.
In the last couple of years the Profit Margin of AIR has grown nicely.
The Operating Margin of AIR (9.09%) is better than 61.76% of its industry peers.
AIR's Operating Margin has improved in the last couple of years.
AIR's Gross Margin of 18.98% is on the low side compared to the rest of the industry. AIR is outperformed by 66.18% of its industry peers.
AIR's Gross Margin has improved in the last couple of years.
| 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
AIR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
AIR has more shares outstanding than it did 1 year ago.
The number of shares outstanding for AIR has been increased compared to 5 years ago.
The debt/assets ratio for AIR has been reduced compared to a year ago.
2.2 Solvency
AIR has an Altman-Z score of 3.17. This indicates that AIR is financially healthy and has little risk of bankruptcy at the moment.
AIR's Altman-Z score of 3.17 is in line compared to the rest of the industry. AIR outperforms 50.00% of its industry peers.
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.
The Debt to FCF ratio of AIR (691.43) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.80 indicates that AIR is somewhat dependend on debt financing.
AIR has a Debt to Equity ratio of 0.80. This is in the lower half of the industry: AIR underperforms 69.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 691.43 | ||
| Altman-Z | 3.17 |
ROIC/WACC0.86
WACC10.14%
2.3 Liquidity
A Current Ratio of 2.72 indicates that AIR has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.72, AIR is in line with its industry, outperforming 58.82% of the companies in the same industry.
A Quick Ratio of 1.26 indicates that AIR should not have too much problems paying its short term obligations.
The Quick ratio of AIR (1.26) is comparable to the rest of the industry.
| 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.
AIR shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.75% yearly.
Looking at the last year, AIR shows a quite strong growth in Revenue. The Revenue has grown by 19.91% in the last year.
Measured over the past years, AIR shows a small growth in Revenue. The Revenue has been growing by 6.06% on average per year.
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
The Earnings Per Share is expected to grow by 13.98% on average over the next years. This is quite good.
AIR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.07% yearly.
EPS Next Y15.5%
EPS Next 2Y13.98%
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.54, AIR is valued on the expensive side.
Based on the Price/Earnings ratio, AIR is valued cheaper than 92.65% of the companies in the same industry.
AIR is valuated rather cheaply when we compare the Price/Earnings ratio to 27.08, which is the current average of the S&P500 Index.
AIR is valuated correctly with a Price/Forward Earnings ratio of 16.91.
Based on the Price/Forward Earnings ratio, AIR is valued cheaply inside the industry as 89.71% of the companies are valued more expensively.
AIR's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.67.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.54 | ||
| Fwd PE | 16.91 |
4.2 Price Multiples
95.59% of the companies in the same industry are more expensive than AIR, based on the Enterprise Value to EBITDA ratio.
AIR's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 1957 | ||
| EV/EBITDA | 11.8 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of AIR may justify a higher PE ratio.
A more expensive valuation may be justified as AIR's earnings are expected to grow with 13.98% in the coming years.
PEG (NY)1.26
PEG (5Y)1.53
EPS Next 2Y13.98%
EPS Next 3YN/A
5. Dividend
5.1 Amount
AIR does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NYSE:AIR (8/27/2025, 1:40:23 PM)
76.19
-0.6 (-0.78%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners99.5%
Inst Owner Change-1.42%
Ins Owners2.73%
Ins Owner Change0.67%
Market Cap2.74B
Analysts81.82
Price Target85.34 (12.01%)
Short Float %2.16%
Short Ratio1.85
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)4.91%
PT rev (3m)7.72%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.27%
EPS NY rev (1m)-0.54%
EPS NY rev (3m)-0.54%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.4%
Revenue NY rev (1m)1.28%
Revenue NY rev (3m)1.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.54 | ||
| Fwd PE | 16.91 | ||
| P/S | 0.99 | ||
| P/FCF | 1957 | ||
| P/OCF | 75.89 | ||
| P/B | 2.26 | ||
| P/tB | 5.94 | ||
| EV/EBITDA | 11.8 |
EPS(TTM)3.9
EY5.12%
EPS(NY)4.5
Fwd EY5.91%
FCF(TTM)0.04
FCFY0.05%
OCF(TTM)1
OCFY1.32%
SpS77.32
BVpS33.69
TBVpS12.83
PEG (NY)1.26
PEG (5Y)1.53
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 | 3.17 |
F-Score6
WACC10.14%
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 Y15.5%
EPS Next 2Y13.98%
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 Year37.1%
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