AAR Corp.
$111.49
+1.9%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 SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation 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 confidenceReturn 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 confidenceRisk 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.
AAR Corp. Market vs Earnings Trajectory
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AAR Corp. Fair Value Envelope
AAR Corp. Profit Bridge
Profitability Analysis
Gross Margin
Thin margins leave little room for error. Cost management and pricing strategy are critical.
Operating Margin
Acceptable margins but limited operational leverage. Operating expense control is important.
Net Profit Margin
Minimal profitability after all expenses. Limited financial flexibility for reinvestment or shareholder returns.
Effective Tax Rate
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.
AAR Corp. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Weak cash conversion. Significant portion of earnings not converting to cashโreview working capital trends and capital intensity.
CapEx Intensity
Very high capital intensity consumes most operating cash flow. Limited flexibility for dividends or debt reduction.
FCF Growth Trend
Significant FCF decline raises concerns. Urgent review needed of operational performance and capital allocation.
Working Capital Impact
Significant working capital drain. Growth may be consuming cash through inventory buildup or receivables extensionโmonitor 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.
AAR Corp. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Excellent liquidity position. The company can easily cover its short-term obligations with substantial cushion.
Debt-to-Equity Ratio
Elevated leverage. Debt exceeds equity, which amplifies both gains and risks. Monitor debt servicing ability.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Balanced asset mix between current and non-current assets, typical of many stable businesses.
AAR Corp. Street Expectations Map
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.
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
Moderate upside. Analysts expect positive returns but with limited margin of safety. Consider entry timing.
Analyst Agreement
Good consensus alignment. Moderate target spread reflects general agreement on value drivers with some variance in assumptions.
Risk-Reward Profile
Favorable risk-reward. Potential upside significantly exceeds downside risk, offering asymmetric return profile attractive for risk-tolerant investors.
Analyst Conviction
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.
AAR Corp. Insider Positioning
During the last 12 months, insiders have sold $28.22M worth of AIR shares, with no buying activity reported.
3 Months
0
0.00
87.7K
9.74M
-9.7M
-$9.74M
3-6 Months
0
0.00
111.5K
10.82M
-10.8M
-$10.82M
6-9 Months
0
0.00
38.5K
3.21M
-3.2M
-$3.21M
9-12 Months
0
0.00
58.4K
4.45M
-4.4M
-$4.45M
Top Buyers
No buying activity
Top Sellers
Holmes John Mcclain Iii
Director, Officer: Chairman, President & Ceo
$23.91M
Flanagan Sarah Louise
Officer: Interim Cfo Vp Fin Ops
$1.17M
Jessup Christopher A.
Officer: Senior Vice President-Cco
$871K
Garascia Jessica A.
Officer: Senior Vp, Gc, Cao & Secretary
$764K
Pachapa Eric
Officer: Vp-Cao & Controller
$636K
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $28.22M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchasesโmay warrant investigation into company developments.
Insider Participation
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.
air Dividend History
Learning Layer
Related Guides
Build conviction on AIR by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.