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Fundamental analysis: AAR Corp. (AIR)

Awarener score: 5.3

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Good) and growth (Very poor), and the company's inclination to return cash to the stockholders (Average).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 4.5

  • Business has been shrinking at a fast pace. It's been weak when measured against peer companies.
  • AAR Corp. business trend stability is good. The higher the stability, the lower the risk. It looks somewhat worse than rivals.

Margins score: 4.8

  • AIR profit margins -on goods and services sold- are usually very poor. They stand mediocre against rival companies.
  • Business profit on sales tends to be sufficient. It's almost average when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually meagre. They remain lacking compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still somewhat worse than similar companies.
  • Profits -before income taxes- are usually sufficient considering total sales, and remain almost average when measured against rivals.
  • Total net profit tends to be hardly sufficient when confronted to sales. Company stands below average when measured against comparable firms.

Growth score: 4.0

  • AAR Corp. profit -on goods and services sold- has been growing at a low pace. It's been close to average when compared to competitors.
  • In recent years, earnings -on operations- have been growing at an extremely fast step, which has been better than most comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at an excellent pace, which compares more than average in relation to peer enterprises.
  • In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be in good shape compared to similar stocks.
  • In past years, at least once the company lost money -before income taxes-. It was well ranked against rivals.
  • In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
  • The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 8.0

  • AIR managed to pay little to no income taxes on profits made in the past years. It's been well ranked against peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 5.5

  • AAR Corp. usually gets sufficient returns on the resources it controls. It proves below average when measured against peer firms.
  • The company normally gets hardly sufficient proceeds -on the resources directly invested in the business-. They remain lacking compared to similar companies.
  • Profitability -in relation to owned resources- is usually modest. It ranks below average when measured against competitors.
  • In the past, got sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's below average when measured against comparable enterprises.

Usage of Funds score: 4.0

  • AIR usually uses a large portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is large. It stands below average when measured against rival firms.
  • The company is usually replacing part of the property, plant, and equipment that gets old, keeping some funds for something else. It can't keep forever, which is substantially worse when measured against industry peers.
  • In the past twelve months the stock paid no dividends. It came bottom tier against competitors.
  • In recent years, has greatly cut back dividend payments. It could be enduring difficult times. The company has behaved in a very weak position compared to similar firms.
  • As no dividends are paid, it is useless trying to estimate their sustainability in time. Sustainability looks not applicable in regard to comparable companies.
  • The company barely enlarges the pool of investors, resulting in slightly more mouths feeding on the pie of profits. It remains close to average when compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
  • We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 5.4

  • AAR Corp. intangible assets (like brands and goodwill) represent a small portion of resources controlled, according to accounting books. It isn't that a significant risk of liquidating them if the company ever gets in financial distress. It happens to be similar to peer companies.
  • The company has roughly triple short-term resources than short-term obligations. Liquidity concerns are most likely unimportant. It turns to be close to average when compared to similar firms.
  • Roughly a tenth of resources controlled were provided for with financial debt. Creditors have minor claims on the company, and financial position is safe. It remains somewhat better than rival firms.
  • Most controlled resources can be made into cash reasonably quick, which is good for liquidity and risk. It looks similar to rivals.
  • For every dollar of short-term obligations, the company has almost another of cash and short-term receivables. It's a disappointment compared to peer firms.
  • For every dollar of short-term obligations, the company has very few cents of cash and equivalents, which is worse than most similar enterprises.
  • Usually, sales are on a month and a half credit. It still ranks more than average in relation to peers.
  • Normally has approximately five months of sales worth in inventory. It comes up as lacking compared to competitors.
  • On average, it takes higher than six months from the purchase to charging customers. It happens to be somewhat better than peers.
  • On average pays suppliers two months after the purchase. It ranks weak when measured against industry peers.
  • The company pays its suppliers four months or more before charging its customers, so there's significant money invested in working capital. It's rather normal in relation to similar companies.
  • Net interest expenses consume a slight portion of usual business earnings, and are very easily bearable. It stands well ranked against rival firms.
  • Business earnings have usually been good when measured against loans taken. Cutting back reinvesting in the business, it could take less than three years to repay the obligations with current profitability. It ranks more than average in relation to comparable enterprises.
  • Revenues are very good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements allows the company to keep more money to reward stockholders in the long run. It looks excellent in relation to similar firms.
  • Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still better than most peer companies.

Valuation score: 6.7

  • AAR Corp. looks reasonable in relation to profits and financial position. It happens to be almost average when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in good shape compared to peers.
  • In the past twelve months, the company generated some good free funds in relation to the stock price, which stands better than most similar companies.
  • The company usually generates somewhat more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, the current valuation might be reasonable. It's still almost average when measured against industry firms.
  • In the past twelve months, the company hasn't rewarded investors, considering both dividends and share on the pie of earnings. It came up close to average when compared to peer ventures.
  • The company has barely more debt than cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks slightly better than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks almost average when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a not far from one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in good shape compared to rival firms.
  • The relation between the stock price and accounting book value might be reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains well ranked against peer firms.
  • In the past twelve months, the operating business earned good money when compared to the current stock price and financial position. It happens to be almost average when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a modest earnings power ability when measured against the current stock price and financial position. It's still close to average when compared to peer companies.

Total score: 5.4


AIR logos

Company at a glance: AAR Corp. (AIR)

Sector, industry: Industrials, Aerospace & Defense

Market Cap: 1.34 billions

Revenues TTM: 1.81 billions

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Aviation Services segment offers aftermarket support and services; inventory management and distribution services; and maintenance, repair, and overhaul, as well as engineering services. This segment also sells and leases new, overhauled, and repaired engine and airframe parts, and components; and provides inventory and repair programs, warranty claim management, and outsourcing programs for engine and airframe parts and components, as well as performance-based supply chain logistics programs in support of the U.S. department of defense and foreign governments. In addition, it offers airframe inspection, maintenance, repair and overhaul, painting, line maintenance, airframe modification, structural repair, avionic and installation, exterior and interior refurbishment, and engineering and support services; and repairs and overhauls components, landing gears, wheels, and brakes. The Expeditionary Services segment provides products and services supporting the movement of equipment and personnel by the U.S. and foreign governments, and non-governmental organizations. This segment also designs, manufactures, and repairs transportation pallets, and various containers and shelters; and provides engineering, design, and system integration services for command and control systems. The company serves domestic and foreign passenger airlines; domestic and foreign cargo airlines; regional and commuter airlines; business and general aviation operators; original equipment manufacturers; aircraft leasing companies; aftermarket aviation support companies; and domestic and foreign military customers. It primarily markets and sells products and services through its employees and foreign sales representatives. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois.

Awarener score: 5.3

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Average), the business stability (Good) and growth (Very poor), and the company's inclination to return cash to the stockholders (Average).