AAR Corp.
AAR Corp. Fundamental Analysis
AAR Corp. (AIR) shows weak financial fundamentals with a PE ratio of 45.45, profit margin of 3.17%, and ROE of 7.23%. The company generates $3.2B in annual revenue with strong year-over-year growth of 19.91%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 51.5/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze AIR's fundamental strength across five key dimensions:
Efficiency Score
WeakAIR struggles to generate sufficient returns from assets.
Valuation Score
ModerateAIR shows balanced valuation metrics.
Growth Score
ModerateAIR shows steady but slowing expansion.
Financial Health Score
ExcellentAIR maintains a strong and stable balance sheet.
Profitability Score
WeakAIR struggles to sustain strong margins.
Key Financial Metrics
Is AIR Expensive or Cheap?
P/E Ratio
AIR trades at 45.45 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, AIR's PEG of 0.37 indicates potential undervaluation.
Price to Book
The market values AAR Corp. at 2.74 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 13.74 times EBITDA. This signals the market has high growth expectations.
How Well Does AIR Make Money?
Net Profit Margin
For every $100 in sales, AAR Corp. keeps $3.17 as profit after all expenses.
Operating Margin
Core operations generate 9.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $7.23 in profit for every $100 of shareholder equity.
ROA
AAR Corp. generates $2.90 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
AAR Corp. generates limited operating cash flow of $1.51M, signaling weaker underlying cash strength.
Free Cash Flow
AAR Corp. generates weak or negative free cash flow of $-35.70M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.90 in free cash annually.
FCF Yield
AIR converts -0.72% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
45.45
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.37
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.74
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.55
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.67
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.84
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.07
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How AIR Stacks Against Its Sector Peers
| Metric | AIR Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 45.45 | 26.49 | Worse (Expensive) |
| ROE | 7.23% | 1307.00% | Weak |
| Net Margin | 3.17% | -5131.00% (disorted) | Weak |
| Debt/Equity | 0.67 | 0.81 | Neutral |
| Current Ratio | 2.84 | 10.48 | Strong Liquidity |
| ROA | 2.90% | -1549793.00% (disorted) | Weak |
AIR outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews AAR Corp.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
31.18%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
-50.73%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
197.75%
Industry Style: Cyclical, Value, Infrastructure
High Growth