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AAR Corp (AIR) stock analysis

AIRNYSEAircraft & PartsFiscal year ends May 31
Financials through Q1 FY2027, quarter ended Aug 31, 2026Last filing: 10-Q on Sep 29, 2026Score 15/3018% below fair value
$108.25−5.92 (-5.19%)

Close on Nov 12, 2026Market cap $4.35BP/E 22.1Yield –

StockData Score

Prices as of Nov 11, 2026How the score works

Value4Growth5Performance3Health3Dividend0

Solid15 of 30 checks passed

AAR passes 15 of the 30 checks behind our score; 10 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.

Valuation
4/6
Growth
5/6
Past performance
3/6
Financial health
3/6
Dividend
0/6

What stands out

  • Trading below fair value

    The share price of $114.17 is below our fair value estimate of $138.50.

  • Earnings grew over 5 years

    Net income grew 39.3% a year on average over the last five fiscal years.

  • Revenue growing 10%+ a year

    Revenue grew 18.4% a year over the last three fiscal years.

  • EPS growing 10%+ a year

    Diluted EPS grew 24.3% a year over the last three fiscal years.

What to watch

  • Margin of safety under 20%

    The price is 17.6% below fair value, less than the 20% cushion we look for.

  • Return on equity under 15%

    Return on equity was 12.9% over the last twelve months and averaged 6.8% over five years; we look for 15% on both.

  • High debt

    Debt is 50.5% of shareholders' equity, above the 40% we consider low.

  • Net margin below the industry

    AAR's net margin of 5.5% is below the Aircraft and Parts median of 5.5%.

Valuation4/6

  • P/E below its 5-year median

    AAR's P/E of 23.3 is below its own 5-year median of 28.8.

  • P/E below the industry

    AAR's P/E of 23.3 is below the Aircraft and Parts median of 27.6.

  • EV/EBITDA against its history

    Needs positive EBITDA and price history.

  • P/B below the industry

    AAR's price-to-book of 2.63 is below the Aircraft and Parts median of 2.88.

  • Trading below fair value

    The share price of $114.17 is below our fair value estimate of $138.50.

  • Margin of safety under 20%

    The price is 17.6% below fair value, less than the 20% cushion we look for.

Growth5/6

  • Revenue growing 10%+ a year

    Revenue grew 18.4% a year over the last three fiscal years.

  • EPS growing 10%+ a year

    Diluted EPS grew 24.3% a year over the last three fiscal years.

  • Earnings growth accelerating

    Net income grew 569% over the last twelve months, against a 5-year average of 39.3% a year.

  • Growing faster than the industry

    Revenue grew 22.0% over the last twelve months; the Aircraft and Parts median is 16.9%.

  • Guidance issued

    The latest outlook (Second quarter FY 2027 Sales growth (ex. LCP), Sep 28, 2026) was issued for the first time, so it neither adds nor takes away points.

  • Gross margin improving

    Gross margin was 19.1% over the last twelve months, against 19.0% a year earlier.

Past performance3/6

  • Return on equity under 15%

    Return on equity was 12.9% over the last twelve months and averaged 6.8% over five years; we look for 15% on both.

  • Return on invested capital

    Needs operating income and invested capital.

  • Return on equity above the industry

    AAR's return on equity of 12.9% is above the Aircraft and Parts median of 9.1%.

  • Earnings grew over 5 years

    Net income grew 39.3% a year on average over the last five fiscal years.

  • Net margin above its 5-year average

    Net margin was 5.5% over the last twelve months, against a 5-year average of 3.4%.

  • Net margin below the industry

    AAR's net margin of 5.5% is below the Aircraft and Parts median of 5.5%.

Financial health3/6

  • High debt

    Debt is 50.5% of shareholders' equity, above the 40% we consider low.

  • Debt trend

    Needs a balance sheet from five years ago with positive equity.

  • Debt covered by cash flow

    Operating cash flow over the last twelve months equals 22.7% of total debt.

  • Interest coverage

    Interest expense is not reported separately.

  • Short-term assets cover short-term debts

    Current assets are 2.83 times current liabilities.

  • Low bankruptcy risk

    The Altman Z-score is 3.56; above 3 is the safe zone and below 1.8 the distress zone.

Dividend0/6

  • No dividend

    AAR has not paid a dividend in the last twelve months.

  • Yield against Treasuries

    No dividend.

  • Yield against the market

    No dividend.

  • Dividend stability

    No dividend.

  • Earnings cover

    No dividend.

  • Cash-flow cover

    No dividend.

Scores of similar companies

Fair value

How we estimate it

Our estimate per share

$138.50

The share price is 18% below this estimate.

20%+ below
Near fair value
20%+ above
$114.17Price$138.50Fair value
MethodMultiple usedOwn 5Y medianIndustry medianValue per shareWeight
P/E28.2×28.8×27.6×$137.9947%
EV/EBITDA16.8×–16.8×$148.1141%
P/B2.5×2.1×2.9×$106.9412%
Earnings powerleft out, too far from the others10.1% cost of equity––$6.35–
Fair value$138.50100%

Valuation over time

Using the earnings and balance sheet published at each date, not today's.

  • P/E at month end
  • Own 5-year median 28.8
  • Aircraft and Parts median 27.6

An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.

Market risk

From the past year of daily prices.

Liquidity

Low risk

Average value traded per day
$54.18M
Value traded per 1% price move
$21.33M

Downside

Medium risk

Typical loss in a bad month
20.1%
Volatility (annualized)
45%
Sharpe ratio, 1 year
0.72
Beta to the S&P 500 (5Y)
1.05

Typical bad-month loss, week by week

25%: high

Margins

Share of revenue, fiscal years 2012 to 2026

Gross margin

18.8%+2.1 pts over 5 years

Net margin

5.7%+3.5 pts over 5 years

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