Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures
AAR Corp (AIR) Is Winning the Aftermarket—But Can Trax Turn It Into a Tech Story?
AAR Corp (AIR) concluded FY25 with strong results—$2.8B in revenue (+20% y/y), $3.91 EPS (+17%), and 140bps EBITDA margin expansion—demonstrating disciplined execution and deepening demand visibility across its commercial and government aerospace verticals. Parts Supply led the outperformance with 17% revenue growth and 230bps margin expansion, fueled by 20%+ growth in new parts distribution and recent wins with FTAI and DLA. Repair & Engineering grew 8% organically, with transitional margin drag expected to reverse as synergy realization and sold-out capacity in Oklahoma City and Miami provide operating leverage in FY26. Integrated Solutions posted solid growth (+10% revenue, +13% EBITDA), with the KIRA JV opening up new federal pipeline opportunities. Trax revenue doubled to over $50M and secured a marquee deal with Delta TechOps, validating the digital uplift thesis, with 4–5x license monetization potential from legacy migrations. Net leverage declined to 2.7x amid strong cash generation and disciplined capital deployment, with FY26 top-line growth expected at ~9% and margin tailwinds building from fixed-cost absorption, MRO efficiency, and software scale. While valuation appears fair, we believe Trax’s scaling contribution, paired with MRO modernization and government diversification, is underappreciated in the current multiple. Can AAR convert its operational strength into a tech-led re-rating story with Trax at the center?
