AIR · sample dossier
AAR Corp.
58/100
OutdatedGenerated Sep 19, 2026 · 10:00 AM UTC · 48 days ago
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EquityAAR Corp. · XNYS
Decision context
Recommendation
Balanced between solid Growth (77/100) and constrained Quality (35/100).
A mixed picture — no strong reason to buy or sell right now.
AlphaDog Fair Value
Executive thesis & key metrics
Executive Investment Thesis
AAR Corp. ($4.54B market cap at $112.77) provides aviation aftermarket solutions across commercial and government aerospace, trading at a P/E of 23.11 and an EV/EBITDA of 15.64. The Hold verdict reflects top-line momentum with revenue growth of 23.0% YoY and EPS growth of 33.7% YoY, balanced against modest profitability including a 5.7% net margin, a 5.5% ROA, and a 0.59 debt-to-equity ratio. The single biggest risk is negative cash flow generation with free cash flow per share at -$1.25, exacerbated by an 11.3% YoY share dilution and a -19.0% 1-month price drawdown below both 50-day and 200-day moving averages.
Key Metrics to Watch
What changed recently
No material changes found in the last 30 days.
Why this rating
Score 58 · Hold
Data through
OutdatedMay 31, 2026
Growth scores 77/100 — top-line expansion leads the profile.
Re-evaluate if
- Net margin falls below 4.5% (was 5.7%)
- Debt/Equity ratio increases above 0.59.
Trim / reconsider if
- ROA falls below 3.6% (was 5.5%)
Think of these dollars as a map of our value estimate for Hold — helpful context, not a reason to override the view.
A Calmer Look · Devil's Advocate
The consensus Hold verdict dangerously underestimates the structural deterioration behind AAR Corp.'s top-line growth.
May be overlooked
The consensus relies on a debt-to-equity ratio of 0.59 and Altman Z-score of 4.02 to claim balance sheet strength, ignoring that negative free cash flow of -$1.25 per share is being directly funded by an 11.3% YoY share dilution rather than debt capacity.
Management's Q4 fiscal 2026 operating segment realignment obscures underlying contract margin decay, as evidenced by a low 5.5% ROA and a modest 18.8% gross margin that fail to absorb rising working capital requirements.
The bull case anchors on quarterly revenue of $928.00M from the period ending 2026-05-31, which is 111 days old and stale as of 2026-09-19, blinding consensus to subsequent quarterly execution risks.
Expectations look stretched
Extrapolating 23.0% YoY revenue growth as durable momentum while gross margin sits at just 18.8% and net margin at 5.7%, leaving zero operational buffer against supply chain inflation.
Treating 33.7% EPS growth as quality earnings despite total shares outstanding expanding 11.3% YoY to offset -$1.25 in free cash flow per share.
Justifying a 23.1 P/E and 2.6 P/B multiple for an asset-heavy business delivering an ROA of only 5.5%.
Revenue Growth YoY falls below 23.0%.
Revenue Growth YoY falls below 23.0%.
Market context
Snapshot returns at report publication
1 month
-19.0%
3 months
-16.4%
6 months
+3.3%
1 year
+50.8%
At a Glance
A mid-sized company is in a pullback at fair pricing.
Top Holders
Financial trajectory
Financial Performance
Go deeper
For learning and research only — not investment advice. AlphaDog doesn’t hold stocks and isn’t your financial advisor.
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