AAR CORP. (AIR) Stock Forecast & Price Target

AAR Corp has demonstrated significant growth in its financial performance, with its Expeditionary Services segment achieving a remarkable 79% year-over-year increase in EBITDA, reaching $3.4 million, and improving its margin to 15.3%, a 340 basis points increase. Additionally, the overall EBITDA for the company increased by 1% year-over-year to $28.1 million, reflecting a stable margin improvement of 30 basis points. Furthermore, the company reported a notable 34% year-over-year rise in EBITDA for its other segments, totaling $43.8 million and driving a margin increase to 13.8%, up 70 basis points, indicating strong operational efficiency and growth potential across its business lines.

AAR Corp experienced a decline in Repair & Engineering sales, which fell by 1% to $214.6 million, although an 8% organic growth was reported, indicating underlying challenges within the segment despite beating expectations slightly. The company's free cash flow (FCF) reported a significant cash burn of $54 million, notably worse than the consensus estimate of a $5 million burn, highlighting deteriorating cash management and liquidity concerns. Additionally, while the Expeditionary Services segment showed a year-over-year growth of 38% to $22 million, this figure still fell 18.5% short of analysts' expectations, suggesting potential issues with market demand or operational inefficiencies.