AAR Corp. Common Stock (AIR)

FairStock Score: 59/100 — STEADY

Key Financials

Strengths

• Generates $28 million in annual free cash flow (0.6% yield on market cap)
• Solid return on equity of 12.1% above cost of capital
• Revenue growth of 24.6% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($65) with negative 74% margin of safety—limited downside protection

AI Analysis

AAR Corp. Common Stock is a small-cap industrials company valued at $4.5 billion. The business generates $3.1 billion in annual revenue with a 2.2% net margin and $28 million in free cash flow. From a quality standpoint, AAR shows solid Piotroski F-Score of 6/9 and Altman Z-Score of 2.8 in the grey zone. On valuation, the stock is reasonably priced at 24.6x earnings, with trades above its Graham Number with a negative 74% margin. Growth dynamics show revenue growing at 24.6% and profit growth of 864.0%. Our composite FairStock Score of 59/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

AAR's 25% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $28 million in annual free cash flow (0.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the industrials space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer