Loar Holdings Inc. Common Stock (LOAR)

FairStock Score: 43/100 — MIXED

Key Financials

Strengths

• Generates $85 million in annual free cash flow (1.5% yield on market cap)
• Altman Z-Score of 4.2 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 19.3% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($15) with negative 309% margin of safety—limited downside protection

AI Analysis

Loar Holdings Inc. Common Stock is a small-cap industrials company valued at $5.6 billion. The business generates $496 million in annual revenue with a 2.5% net margin and $85 million in free cash flow. From a quality standpoint, Loar shows healthy Altman Z-Score of 4.2 and modest 6% ROE. On valuation, the stock is commanding a steep 78.6x multiple, with trades far above its Graham Number ($15) with no margin of safety. Growth dynamics show revenue growing at 19.3% and profit growth of 239.5%. Our composite FairStock Score of 43/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Loar's 19% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $85 million in annual free cash flow (1.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 79x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. 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