AAR Corp.’s AIR robust presence in the aerospace Maintenance, Repair and Overhaul ("MRO") market, solid liquidity and low debt are strong positives. Given its growth prospects, AIR makes for a solid investment option in the Aerospace sector.

Let’s focus on the factors that make this Zacks Rank #1 (Strong Buy) company a strong investment pick at the moment.

Growth Projections & Surprise History of AIR

The Zacks Consensus Estimate for fiscal 2025 earnings per share is pegged at $3.75, which indicates year-over-year growth of 12.6%.

The consensus estimate for fiscal 2025 sales is $2.76 billion, which indicates year-over-year growth of 18.9%.

It delivered an average earnings surprise of 3.90% in the last four quarters.

AAR Stock’s Debt Position

Currently, the company’s total debt to capital is 45.51%, better than the industry’s average of 54.03%.

AIR’s times interest earned (TIE) ratio at the end of the first quarter of fiscal 2025 was 1.53. A TIE ratio of more than one indicates that the company will be able to meet its interest payment obligations in the near term without any problems.

AIR’s Liquidity

AIR’s current ratio at the end of the fiscal first quarter was 2.68. A current ratio of greater than one indicates the company’s ability to meet its future short-term liabilities without difficulties.

AIR’s Focus on the MRO Market

The commercial aerospace industry has been witnessing a solid increase in the utilization of existing aircraft, which, in turn, has been driving the demand for aircraft maintenance. To reap the benefits of the growing MRO prospects, AAR has been making notable efforts. The company broke ground on additional hangars in Miami, FL, and Oklahoma City, OK, in March and April 2024, respectively. These larger capacity hangers will increase AAR’s existing footprint through increased efficiency and improved throughput.

AIR Stock’s Price Performance

Shares of AIR have gained 16.5% in the past month compared with the industry’s 2.4% growth.

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Other Stocks to Consider

Other top-ranked stocks from the same industry are Mercury Systems MRCY, Kratos Defense & Security Solutions, Inc. KTOS and Leonardo DRS, Inc. DRS. Mercury Systems sports a Zacks Rank of 1 at present, while Kratos and Leonardo carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Mercury Systems has a long-term earnings growth rate of 13.2%. The Zacks Consensus Estimate for MRCY’s fiscal 2025 sales is pinned at $848.9 million, which indicates year-over-year growth of 1.6%.

Kratos delivered an average earnings surprise of 70.63% in the last four quarters. The Zacks Consensus Estimate for KTOS’ 2025 sales is pinned at $1.28 billion, which indicates year-over-year growth of 12.2%.

Leonardo DRS delivered an average earnings surprise of 22.27% in the last four quarters. The Zacks Consensus Estimate for DRS’ 2025 sales is pinned at $3.43 billion, which indicates year-over-year growth of 7.4%.

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AAR Corp. (AIR) : Free Stock Analysis Report

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