📊 AIR Key Takeaways
Is Aar Corp. (AIR) a Good Investment?
AAR Corp demonstrates strong revenue growth of 19.9% YoY, but this growth is not translating to bottom-line performance with net income flat year-over-year and EPS declining 72.9%. Critical concerns include negative operating cash flow of -$31.3M and negative free cash flow of -$47.4M, indicating the company is burning cash despite top-line expansion and raising questions about earnings quality and capital efficiency.
AAR CORP shows solid top-line momentum with nearly 20% revenue growth and reasonable balance-sheet liquidity, which supports continued operations and growth investment. However, profit conversion is weak relative to sales, net income was flat despite higher revenue, diluted EPS fell sharply, and cash generation turned negative. The fundamentals point to a business with real demand strength but uneven earnings quality and limited margin of safety.
Why Buy Aar Corp. Stock? AIR Key Strengths
- Strong revenue growth of 19.9% YoY demonstrates solid demand in aircraft and parts sector
- Healthy liquidity position with current ratio of 2.84x providing operational flexibility
- Moderate debt-to-equity ratio of 0.61x suggests reasonable leverage levels
- Strong year-over-year revenue growth indicates healthy demand and execution
- Liquidity is solid with a 2.84x current ratio and 1.31x quick ratio
- Debt-to-equity of 0.61x is manageable relative to equity base
AIR Stock Risks: Aar Corp. Investment Risks
- Negative operating cash flow of -$31.3M contradicts revenue growth, signaling potential working capital issues or earnings quality concerns
- Negative free cash flow of -$47.4M indicates company is consuming rather than generating cash, unsustainable for long-term value creation
- Significant EPS decline of 72.9% YoY despite flat net income suggests substantial share dilution or poor capital allocation decisions
- Low profitability margins (net margin 4.5%, operating margin 6.2%) with weak ROE of 4.4% indicate poor capital efficiency
- Interest coverage ratio of 2.2x provides limited buffer for debt service in economic downturns
- Operating cash flow and free cash flow are negative, weakening growth quality
- Interest coverage of 2.2x leaves limited cushion if borrowing costs or earnings pressure increase
- Flat net income and a 72.9% drop in diluted EPS suggest margin pressure, dilution, or other earnings-quality concerns
Key Metrics to Watch
- Operating cash flow trend - must return to positive territory to validate earnings quality
- Free cash flow generation - critical indicator of sustainable profitability and cash generation ability
- Net income and EPS growth - currently stalling despite revenue expansion, questioning operational leverage
- Working capital management - negative OCF suggests deteriorating collections or inventory management
- Debt service capacity - monitor interest coverage ratio given high long-term debt of $952.7M
- Operating cash flow and free cash flow trend
- Operating margin and interest coverage
Aar Corp. (AIR) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.84x current ratio provides a solid financial cushion.
AIR Profit Margin, ROE & Profitability Analysis
AIR vs Automotive Sector: How Aar Corp. Compares
How Aar Corp. compares to Automotive sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Aar Corp. Stock Overvalued? AIR Valuation Analysis 2026
Based on fundamental analysis, Aar Corp. has mixed fundamental signals relative to the Automotive sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Aar Corp. Balance Sheet: AIR Debt, Cash & Liquidity
AIR Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Aar Corp.'s revenue has grown significantly by 34% over the 5-year period, indicating strong business expansion. The most recent EPS of $2.53 reflects profitable operations.
AIR Revenue Growth, EPS Growth & YoY Performance
AIR Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $678.2M | -$8.9M | $-0.25 |
| Q2 2026 | $686.1M | -$12.6M | $-0.36 |
| Q1 2026 | $661.7M | $18.0M | $0.50 |
| Q3 2025 | $567.3M | -$8.9M | $-0.25 |
| Q2 2025 | $545.4M | -$12.6M | $-0.36 |
| Q1 2025 | $549.7M | -$600.0K | $-0.02 |
| Q3 2024 | $521.1M | $14.0M | $0.39 |
| Q2 2024 | $469.8M | $22.5M | $0.64 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Aar Corp. Dividends, Buybacks & Capital Allocation
AIR SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Aar Corp. (CIK: 0000001750)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AIR
What is the AI rating for AIR?
Aar Corp. (AIR) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 77% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AIR's key strengths?
Claude: Strong revenue growth of 19.9% YoY demonstrates solid demand in aircraft and parts sector. Healthy liquidity position with current ratio of 2.84x providing operational flexibility. ChatGPT: Strong year-over-year revenue growth indicates healthy demand and execution. Liquidity is solid with a 2.84x current ratio and 1.31x quick ratio.
What are the risks of investing in AIR?
Claude: Negative operating cash flow of -$31.3M contradicts revenue growth, signaling potential working capital issues or earnings quality concerns. Negative free cash flow of -$47.4M indicates company is consuming rather than generating cash, unsustainable for long-term value creation. ChatGPT: Operating cash flow and free cash flow are negative, weakening growth quality. Interest coverage of 2.2x leaves limited cushion if borrowing costs or earnings pressure increase.
What is AIR's revenue and growth?
Aar Corp. reported revenue of $1.5B.
Does AIR pay dividends?
Aar Corp. does not currently pay dividends.
Where can I find AIR SEC filings?
Official SEC filings for Aar Corp. (CIK: 0000001750) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AIR's EPS?
Aar Corp. has a diluted EPS of $1.85.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is AIR a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Aar Corp. has a SELL rating with 77% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is AIR stock overvalued or undervalued?
Valuation metrics for AIR: ROE of 4.4% (sector avg: 12%), net margin of 4.5% (sector avg: 6%). Compare these metrics with sector averages to assess valuation.
Should I buy AIR stock in 2026?
Our dual AI analysis gives Aar Corp. a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is AIR's free cash flow?
Aar Corp.'s operating cash flow is $-31.3M, with capital expenditures of $16.1M. FCF margin is -3.1%.
How does AIR compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 4.5% (avg: 6%), ROE 4.4% (avg: 12%), current ratio 2.84 (avg: 1.2).