AAR Corp.

AAR Corp.

AIRยทNYSE

$111.49

+1.9%
IndustrialsAerospace & Defense

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Aviation Services segment offers aftermarket support and services; inventory management and distribution services; and maintenance, repair, and overhaul, as well as engineering services. This segment also sells and leases new, overhauled, and repaired engine and airframe parts, and components; and provides inventory and repair programs, warranty claim management, and outsourcing programs for engine and airframe parts and components, as well as performance-based supply chain logistics programs in support of the U.S. department of defense and foreign governments. In addition, it offers airframe inspection, maintenance, repair and overhaul, painting, line maintenance, airframe modification, structural repair, avionic and installation, exterior and interior refurbishment, and engineering and support services; and repairs and overhauls components, landing gears, wheels, and brakes. The Expeditionary Services segment provides products and services supporting the movement of equipment and personnel by the U.S. and foreign governments, and non-governmental organizations. This segment also designs, manufactures, and repairs transportation pallets, and various containers and shelters; and provides engineering, design, and system integration services for command and control systems. The company serves domestic and foreign passenger airlines; domestic and foreign cargo airlines; regional and commuter airlines; business and general aviation operators; original equipment manufacturers; aircraft leasing companies; aftermarket aviation support companies; and domestic and foreign military customers. It primarily markets and sells products and services through its employees and foreign sales representatives. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois.

At a Glance

Live Snapshot
Market Cap$4.43B
EPS0.3500
P/E Ratio318.54
Earnings Date07/15/2026

Intrinsic Alpha Methodology

Thesis Lenses

Signal ยท Driver ยท Risk

Signal

High confidence

Valuation multiple is elevated (P/E 318.5).

Valuation inputs: P/E 318.5, earnings yield +0.3%, momentum +1.9%.

If multiples stay elevated while momentum fades, downside repricing risk rises.

Driver

High confidence

Return profile is soft (ROE +1.0%, ROIC +2.6%).

Profitability stack: net margin +0.4%, ROE +1.0%, ROIC +2.6%.

Quality deterioration often appears in margins before it shows up in headline EPS.

Risk

High confidence

Risk profile is balanced but has notable pressure points to monitor.

Risk factors: liabilities/assets +57.4%, momentum +1.9%, net margin +0.4%.

Higher leverage with weak momentum and thin margins can amplify drawdown severity.

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AAR Corp. Market vs Earnings Trajectory

AIR ยท NYSE

Loading price and EPS data...

AAR Corp.

AAR Corp. Fair Value Envelope

AIR ยท NYSE

Our analysis suggests that AIR has a fair value of HIDDEN per share in the Base Case projection. With shares currently trading at $111.49, this represents a potential HIDDEN relative to our calculated worth for AAR Corp..

Intrinsic Value
Current Price: $111.49
3Y-84.0%
5Y-51.0%
10Y-74.0%
3Y+53.0%
5Y+34.0%
10Y+67.0%
3Y-84.0%
5Y-50.0%
10Y-74.0%
3Y-52.0%
5Y-200.0%
10Y+12.0%
3Y-98.0%
5Y-102.0%
10Y-102.0%
3Y+81.0%
5Y+37.0%
10Y+95.0%
AAR Corp.

AAR Corp. Profit Bridge

AIR ยท NYSE
Revenue2.78B
Cost of Goods Sold (2.25B)
Gross Profit527.70M
Operating Expenses (342.50M)
Operating Income185.20M
Interest Expense (75.40M)
Other Income/Expense-146.30M
Pretax Income38.90M
Income Tax (26.40M)
Net Income12.50M
Net Income
12.50M

Profitability Analysis

Gross Margin

19.0%

Thin margins leave little room for error. Cost management and pricing strategy are critical.

Operating Margin

6.7%

Acceptable margins but limited operational leverage. Operating expense control is important.

Net Profit Margin

0.4%

Minimal profitability after all expenses. Limited financial flexibility for reinvestment or shareholder returns.

Effective Tax Rate

67.9%

Higher tax burden may reflect limited tax optimization or operations in high-tax jurisdictions.

Profitability Insight

Efficient profit conversion: Minimal margin compression from gross to net indicates lean operations and favorable tax/interest environment.

18.98%
Gross Profit Margin
3Y+10.0%
5Y+46.0%
10Y+33.0%
6.66%
Operating Profit Margin
20%
3Y+13.0%
5Y+234.0%
10Y+68.0%
0.45%
Net Profit Margin
-77%
3Y-90.0%
5Y-62.0%
10Y-84.0%
1.03%
Return on Equity
-73%
3Y-86.0%
5Y-62.0%
10Y-81.0%
0.44%
Return on Assets
-74%
3Y-91.0%
5Y-63.0%
10Y-87.0%
2.60%
Return on Invested Capital
-42%
3Y-60.0%
5Y+31.0%
10Y-35.0%
AIR

AAR Corp. Cash Conversion Engine

AIR ยท NYSE
Net Income12.50M
Depreciation & Amortization55.20M
Stock-Based Compensation19.90M
Change in Working Capital-112.30M
Others66.30M
Capital Expenditures-34.70M
Free Cash Flow1.40M

Cash Flow Quality Analysis

FCF Conversion Rate

11.2%

Weak cash conversion. Significant portion of earnings not converting to cashโ€”review working capital trends and capital intensity.

CapEx Intensity

96.1%

Very high capital intensity consumes most operating cash flow. Limited flexibility for dividends or debt reduction.

FCF Growth Trend

-89.9%

Significant FCF decline raises concerns. Urgent review needed of operational performance and capital allocation.

Working Capital Impact

-$112.30M

Significant working capital drain. Growth may be consuming cash through inventory buildup or receivables extensionโ€”monitor closely.

Cash Flow Quality Insight

Deteriorating cash generation: Both declining FCF and weak conversion rate signal fundamental challenges. Investigate margin pressure, rising costs, or working capital issues.

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AAR Corp. Funding & Solvency Profile

AIR ยท NYSE
Cash & Cash Equivalents100.10M
Net Receivables568.50M
Inventory958.20M
Other Current Assets136.90M
Total Current Assets2 B
Property, Plant & Equipment544.00M
Goodwill & Intangible Assets840.90M
Long-Term Investments86.30M
Other Non-Current Assets97.60M
Total Non-Current Assets728 M
Total Assets
3.33B

Financial Health Analysis

Current Ratio

2.70x

Excellent liquidity position. The company can easily cover its short-term obligations with substantial cushion.

Debt-to-Equity Ratio

1.03x

Elevated leverage. Debt exceeds equity, which amplifies both gains and risks. Monitor debt servicing ability.

Working Capital

1 B

Strong working capital position provides significant operational flexibility and financial cushion.

Asset Composition

53% Current

Balanced asset mix between current and non-current assets, typical of many stable businesses.

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AAR Corp. Street Expectations Map

AIR ยท NYSE

Wall Street analysts project that AIR stock may experience modest gains over the coming 12 months. The consensus 1-year price target stands at 120.00, with estimates ranging from a low of 105.00 to a high of 135.00.

Lowest Target
105.00
-5.82%
Consensus Target
120.00
7.63%
Highest Target
135.00
21.09%

The consensus 1-year price target stands at 120.00, with estimates ranging from a low of 105.00 to a high of 135.00.

Analyst Consensus Analysis

Upside Potential

+7.6%

Moderate upside. Analysts expect positive returns but with limited margin of safety. Consider entry timing.

Analyst Agreement

25.0% spread

Good consensus alignment. Moderate target spread reflects general agreement on value drivers with some variance in assumptions.

Risk-Reward Profile

3.62x

Favorable risk-reward. Potential upside significantly exceeds downside risk, offering asymmetric return profile attractive for risk-tolerant investors.

Analyst Conviction

High

Positive outlook with reasonable agreement. Analysts generally optimistic about prospects with manageable uncertainty.

Market Sentiment Insight

Monitor and evaluate: Current analyst consensus suggests limited conviction or near-term catalysts. Stay informed on company developments and reassess positioning as new information emerges.

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AAR Corp. Insider Positioning

AIR ยท NYSE

During the last 12 months, insiders have sold $28.22M worth of AIR shares, with no buying activity reported.

3 Months

Bought

0

0.00

Sold

87.7K

9.74M

Net Activity

-9.7M

-$9.74M

3-6 Months

Bought

0

0.00

Sold

111.5K

10.82M

Net Activity

-10.8M

-$10.82M

6-9 Months

Bought

0

0.00

Sold

38.5K

3.21M

Net Activity

-3.2M

-$3.21M

9-12 Months

Bought

0

0.00

Sold

58.4K

4.45M

Net Activity

-4.4M

-$4.45M

Top Buyers

No buying activity

Top Sellers

1
HJMI

Holmes John Mcclain Iii

Director, Officer: Chairman, President & Ceo

249.8K sharesโ€ข11 transactions

$23.91M

2
FSL

Flanagan Sarah Louise

Officer: Interim Cfo Vp Fin Ops

10.8K sharesโ€ข1 transactions

$1.17M

3
JCA

Jessup Christopher A.

Officer: Senior Vice President-Cco

9.0K sharesโ€ข1 transactions

$871K

4
GJA

Garascia Jessica A.

Officer: Senior Vp, Gc, Cao & Secretary

7.8K sharesโ€ข3 transactions

$764K

5
PE

Pachapa Eric

Officer: Vp-Cao & Controller

8.1K sharesโ€ข3 transactions

$636K

Insider Activity Analysis

Net Insider Sentiment

Bearish

Strong bearish signal with $28.22M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.

Buy/Sell Ratio

0.00:1

Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.

Recent Trend (3 Months)

$9.74M

Heavy recent selling activity. Recent insider sales notably exceed purchasesโ€”may warrant investigation into company developments.

Insider Participation

High Selling

5 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.

Insider Activity Insight

Multiple red flags: Heavy selling, numerous sellers, and continued recent selling create a concerning pattern. Investigate fundamental drivers and consider whether company guidance or industry conditions have deteriorated.

0.00%
Dividend Yield
3Y-
5Y-
10Y-100.0%
ย 

air Dividend History

AIR
10Y CAGR +12%
Latest $0.075
Annual $0.375
5 year growth trend
Last Period: +0%