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Why AIR Stock Deserves a Spot in Your Portfolio Right Now

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Key Takeaways

  • AAR's current ratio of 2.91 tops the industry's 1.83, showing strong short-term liquidity.
  • The company's ROE of 12.29% exceeds the industry average, reflecting efficient capital use.
  • Facility expansions are set to lift AAR's MRO capacity by 15% and add $60M in annual revenues.

AAR Corp.’s (AIR - Free Report) solid foothold in the aerospace maintenance, repair and overhaul (MRO) market, along with robust ROE and better debt management, serves as a key growth driver for the company. Given its growth prospects, AIR makes for a solid investment option in the Zacks Aerospace Defense Equipment industry.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.

AIR’s Growth Outlook & Surprise History

The Zacks Consensus Estimate for AAR’s fiscal 2026 earnings per share (EPS) is pegged at $4.43, which implies a year-over-year rise of 13.3%.

The Zacks Consensus Estimate for AAR’s total revenues for fiscal 2026 stands at $2.87 billion, which indicates year-over-year growth of 3.4%.

The company surpassed expectations in the last four reported quarters and delivered an average earnings surprise of 9.44%.

AIR’s Return on Equity

Return on equity (ROE) measures how effectively a company has used its funds to generate higher returns. AAR currently has an ROE of 12.29% compared to the industry's average of 9.31%. This suggests that the company has been utilizing its funds more effectively than its peers in the industry.

Liquidity Position of AAR

AAR Corp’s current ratio at the end of the first quarter of fiscal 2026 was 2.91, higher than the industry’s average of 1.83. The ratio, being greater than one, indicates AAR’s ability to meet its future short-term liabilities without difficulties.

AIR Expands Presence in MRO Market

AAR stands as North America’s largest independent maintenance, repair and overhaul provider, with six certified hangars located across the United States and Canada.

In June 2025, Delta TechOps opted for AAR’s aviation maintenance software subsidiary, Trax, to upgrade its legacy maintenance and engineering systems with Trax’s eMRO and eMobility solutions. Previously, in April, Amerijet International Airlines partnered with Trax to improve its maintenance processes and drive its digital transformation initiatives.

To further strengthen its MRO capabilities, the company is presently undertaking airframe MRO facility expansions at its Oklahoma City and Miami hangars. Once operational next year, these expansions are expected to increase AAR’s MRO network capacity by 15% and add nearly $60 million to the company’s annual revenues.

These efforts boost AIR’s worldwide MRO capabilities, broaden its service portfolio and reinforce its regional footprint.

Overview of AAR’s Debt Profile

Currently, AAR’s total debt to capital is 44.41%, better than the industry’s average of 49.30%.

AIR’s times interest earned ratio (TIE) at the end of the first quarter of fiscal 2026 was 1.8. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.

AIR Stock Price Performance

In the past three months, AAR shares have rallied 19.1% compared with the industry’s growth of 2.1%.

Zacks Investment Research
Image Source: Zacks Investment Research

Other Stocks to Consider

A few other top-ranked stocks from the same industry are Astronics Corp. (ATRO - Free Report) , which sports a Zacks Rank #1 (Strong Buy), and Elbit Systems (ESLT - Free Report) and Loar Holdings, Inc. (LOAR - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ATRO’s 2025 EPS stands at $1.60 per share, which implies a jump of 46.8%. The Zacks Consensus Estimate for 2025 sales is pegged at $850.8 million, which calls for an increase of 7%.

ESLT’s long-term earnings growth rate is 23.3%. The Zacks Consensus Estimate for 2025 EPS is pegged at $12.10, which suggests a year-over-year improvement of 38.1%.

The Zacks Consensus Estimate for LOAR’s 2025 EPS stands at 79 cents per share, which suggests massive growth of 88.1%. The Zacks Consensus Estimate for 2025 sales stands at $495.2 million, which implies an increase of 22.9%.

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