Company Overview - AAR Corp., based in Wood Dale, IL, provides various products and services to the aviation and defense industries globally, with principal customers including The Boeing Company and Airbus [12]. - The company operates in over 20 nations and reports through four operating segments: Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services [12]. Investment Highlights - AAR Corp. holds a 1 (Strong Buy) rating on the Zacks Rank, indicating strong investment potential [13]. - The company has a VGM Score of B, suggesting a favorable combination of value, growth, and momentum characteristics [13]. - AAR Corp. is particularly appealing to growth investors, with a Growth Style Score of A, forecasting year-over-year earnings growth of 13.2% for the current fiscal year [13]. - Recent analyst activity shows two analysts have revised their earnings estimates higher in the last 60 days for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.14 to $3.77 per share [13]. - The company has an average earnings surprise of 3.9%, indicating a history of exceeding earnings expectations [13]. Conclusion - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, AAR Corp. is positioned as a strong candidate for investors seeking growth opportunities in the aviation and defense sectors [14].

Group 1 - AAR (AIR) is currently ranked 9 in the Zacks Sector Rank among 51 companies in the Aerospace group [2] - AAR has a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook with a 4% increase in the consensus estimate for full-year earnings over the past 90 days [3] - Year-to-date, AAR has returned 12.7%, outperforming the average Aerospace sector gain of 3.5% [4] Group 2 - AAR is part of the Aerospace - Defense Equipment industry, which includes 26 companies and is currently ranked 138 in the Zacks Industry Rank, with an average gain of 5.4% year-to-date [5] - Redwire Corporation (RDW), another outperforming stock in the Aerospace sector, has returned 33.2% year-to-date and has a Zacks Rank of 2 (Buy) [4][5] - The Aerospace - Defense industry, which includes Redwire Corporation, is ranked 147 and has gained 2.6% year-to-date [6]

Core Viewpoint - AAR Corp. reported strong second-quarter fiscal 2025 earnings, surpassing estimates and showing significant year-over-year growth in sales and adjusted earnings [2][4]. Financial Performance - AAR's adjusted earnings for Q2 fiscal 2025 were 90 cents per share, exceeding the Zacks Consensus Estimate of 83 cents by 8.4% and improving 11.1% from the previous year [2][3]. - The company generated net sales of $686.1 million, beating the Zacks Consensus Estimate of $652.6 million by 5.1% and increasing 25.8% from $545.4 million in the same quarter last year [4]. Segment Performance - Sales in the Parts Supply segment reached $273.7 million, up 20.3% year over year [5]. - Repair & Engineering sales were $228.8 million, reflecting a 57.4% increase from the prior-year period [5]. - Integrated Solutions sales amounted to $163.4 million, up 4.3% from the year-ago quarter [5]. - Expeditionary Services recorded sales of $20.2 million, up 27.8% year over year [5]. Operational Metrics - AAR's adjusted operating margin improved from 8.1% to 9.2%, driven by enhanced profitability in the Repair & Engineering segment [6]. - Selling, general and administrative expenses were $133.1 million, compared to $65.7 million a year ago [6]. - Net interest expenses for the quarter totaled $18.8 million, up from $5.6 million in the previous year [6]. Cash Flow and Debt - As of November 30, 2024, AAR's cash and cash equivalents were $61.7 million, down from $85.8 million as of May 31, 2024 [7]. - Long-term debt increased to $986.7 million from $985.4 million during the same period [7]. - Net cash flow from operating activities for the first six months of fiscal 2025 was $3.4 million, compared to a cash outflow of $1.3 million in the prior year [7]. Market Outlook - AAR has a Zacks Rank of 1 (Strong Buy), indicating expectations for above-average returns in the coming months [10].

Core Insights - Zacks Premium offers tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score identifies undervalued stocks using financial ratios [3] - Growth Score assesses a company's financial health and future growth potential [4] - Momentum Score tracks price trends to identify optimal buying opportunities [5] - VGM Score combines all three styles to provide a comprehensive evaluation of stocks [6] Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to identify stocks with high potential [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41%, significantly outperforming the S&P 500 [8] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [9] Stock Highlight: AAR Corp. - AAR Corp. operates in the aviation and defense sectors, serving major clients like Boeing and Airbus [11] - The company holds a 1 (Strong Buy) Zacks Rank and a VGM Score of A, indicating strong growth potential [12] - AAR Corp. is projected to achieve a year-over-year earnings growth of 13.2% for the current fiscal year, with positive earnings estimate revisions [12][13]

Core Insights - Expedia's 2025 Air Hacks Report reveals strategies to save travelers money, debunking common myths about air travel costs [1][9] - The report indicates that August is the cheapest month to travel, while February and March are the most expensive [1][15] - Booking flights on Sundays can lead to savings of up to 17%, highlighting the importance of the day of the week for flight bookings [1][15] Myth-Busting Findings - Myth 1: August is the most expensive month to travel. Reality: It is the cheapest, with potential savings of 12% domestically and 7% internationally compared to February and March [15] - Myth 2: No best day to book flights. Reality: Booking on Sundays can save domestic travelers 6% and international travelers 17% compared to Mondays or Fridays [15] - Myth 3: Day of travel does not affect cost. Reality: Traveling on Thursdays and Saturdays can save travelers 17% compared to Sundays [15] - Myth 4: Booking further in advance is always cheaper. Reality: The best time to book is 1 to 3 months in advance for domestic flights and 18 to 29 days for international flights [15] - Myth 5: Airfare increases every year. Reality: Domestic economy tickets are down 1% and international economy tickets are down 4% from the previous year [15] - Myth 6: Premium tickets are always too expensive. Reality: The price gap between premium and economy tickets has decreased by 10% since 2019 [15] - Myth 7: All flights are full. Reality: Tuesdays are the quietest travel days, with February being the least busy month [15] - Myth 8: Nothing can be done about delays and cancellations. Reality: Morning flights have a significantly lower cancellation rate compared to evening flights [15] New Tools and Features - Expedia introduced a new Flight Deals tool that surfaces fares at least 20% lower than typical predicted prices, allowing travelers to filter by destination and travel date [2][4] - The tool enables users to create custom alerts for flight deals, enhancing the booking experience [4][6]

Core Viewpoint - The Zacks Aerospace-Defense Equipment industry is poised for growth due to impressive global air passenger traffic forecasts, despite facing challenges from supply-chain disruptions that may impact demand for aircraft parts and overall profitability [1][5][6]. Industry Overview - The Zacks Aerospace-Defense Equipment industry includes companies that manufacture essential components for aerospace and defense, such as aerostructures, propulsion systems, aircraft engines, and defense electronics. These firms also provide aftermarket support services like maintenance and repair [2]. Trends Shaping the Industry - **Mergers and Acquisitions**: The industry is witnessing a trend of mergers and acquisitions aimed at expanding product lines and improving economies of scale. Notable acquisitions include Teledyne Technologies' purchase of Micropac Industries and HEICO Corporation's acquisition of Mid Continent Controls [3][4]. - **Air Traffic Growth**: The International Air Transport Association (IATA) projects an 8% growth in revenue passenger kilometers (RPKs) for 2025, with airline revenues expected to reach $1.007 trillion, a 4.4% year-over-year increase, benefiting aerospace-defense equipment stocks [5]. - **Supply-Chain Challenges**: Ongoing supply-chain disruptions are expected to continue affecting the global airline industry's profitability, with IATA estimating a 30% shortfall in 2024 aircraft deliveries and a downward revision for 2025 deliveries [6]. Industry Performance - The Aerospace-Defense Equipment industry has outperformed both the Zacks S&P 500 composite and its sector over the past year, with a collective stock surge of 37.7%, compared to 9.9% for the Aerospace sector and 24.8% for the S&P 500 [10]. - The industry currently trades at a trailing 12-month EV/Sales ratio of 7.72X, significantly higher than the S&P 500's 5.60X and the sector's 2.56X, indicating a premium valuation [12]. Notable Companies - **AAR Corp.**: Reported a 26% year-over-year increase in net sales for Q2 fiscal 2025, with a Zacks Consensus Estimate indicating a 19.5% sales improvement for fiscal 2025 [15][16]. - **Axon Enterprise**: Engaged in supplying body cameras to Loomis US, reflecting strong demand. The Zacks Consensus Estimate for 2025 sales indicates a 22.6% improvement [17][18]. - **Kratos Defense & Security Solutions**: Recently won a hypersonic system program award valued at approximately $100 million, contributing positively to its revenue outlook. The Zacks Consensus Estimate for 2025 sales indicates a 12.2% improvement [20][21].

Group 1 - AAR (AIR) is currently outperforming its Aerospace peers with a year-to-date performance of 15.1%, compared to an average gain of 6% for the sector [4] - AAR holds a Zacks Rank of 1 (Strong Buy), indicating strong analyst sentiment and a positive earnings outlook, with a 4% increase in the consensus estimate for full-year earnings over the past three months [3] - The Aerospace - Defense Equipment industry, which includes AAR, has an average gain of 38.8% year-to-date, suggesting that AAR is slightly underperforming its industry [6] Group 2 - Redwire Corporation (RDW) is another stock in the Aerospace sector that has outperformed, with a year-to-date increase of 29% and a consensus EPS estimate increase of 137.1% over the past three months [4][5] - The Aerospace - Defense industry, which includes Redwire Corporation, has seen a decline of 4.4% since the beginning of the year, indicating a challenging environment for this specific industry [7]

Company Overview - AAR Corp., based in Wood Dale, IL, provides products and services to the aviation and defense industries globally, with principal customers including Boeing and Airbus [12] - The company operates in over 20 nations and reports through four segments: Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services [12] Investment Highlights - AAR Corp. is currently rated 1 (Strong Buy) on the Zacks Rank, indicating strong investment potential [13] - The company has a VGM Score of A, suggesting it has attractive value, growth, and momentum characteristics [13] - AAR Corp. has a Momentum Style Score of A, with shares increasing by 15.9% over the past four weeks [13] - Recent upward revisions in earnings estimates by two analysts for fiscal 2025 have led to an increase in the Zacks Consensus Estimate by $0.14 to $3.77 per share [13] - The company boasts an average earnings surprise of 3.9%, indicating a history of exceeding earnings expectations [13] Conclusion - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, AAR Corp. is positioned as a strong candidate for investors seeking growth opportunities in the aerospace sector [14]

Group 1 - Momentum investing contrasts with the traditional strategy of "buy low and sell high," focusing instead on "buying high and selling higher" [1] - Identifying the right entry point for fast-moving stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] Group 2 - AAR (AIR) is highlighted as a strong candidate for investment, having experienced a price increase of 15.9% over the past four weeks [3] - AIR has gained 14.8% over the past 12 weeks, indicating its ability to deliver positive returns over a longer timeframe [4] - AIR has a Momentum Score of A, suggesting it is an opportune time to invest in the stock [5] Group 3 - AIR has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - The stock is currently trading at a Price-to-Sales ratio of 0.98, indicating it is reasonably valued at 98 cents for each dollar of sales [6] - AIR is positioned for significant growth potential, supported by its fast-paced momentum characteristics [7] Group 4 - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [7] - Zacks offers over 45 Premium Screens tailored to different investing styles, which can assist in identifying winning stock picks [8]

Core Viewpoint - AAR Corp is a leading independent aviation services provider, reporting significant revenue growth and margin expansion, driven by strong demand in both commercial and government sectors [2][5][7]. Financial Performance - AAR reported fiscal Q2 2025 EPS of 90 cents, exceeding consensus estimates by 5 cents, with revenues increasing 30% YoY to $686.1 million, surpassing the $654.47 million consensus [2]. - Organic growth accelerated to 12% YoY from 6% in the previous quarter, with adjusted EBITDA margins rising to 11.4% from 10.1% YoY [2][4]. Segment Performance - The Parts and Supply business experienced 20% YoY sales growth, driven by new parts distribution and improved availability of used serviceable materials [4]. - Repair & Engineering sales surged 57% YoY, attributed to contributions from acquisitions and efficiency gains, with commercial customers now accounting for 73% of consolidated sales [5]. Business Developments - AAR secured new multi-year agreements for engine parts distribution and extended contracts with major clients, including Singapore Airlines [6]. - The company plans to divest its Landing Gear Overhaul business for $51 million as part of its portfolio optimization strategy [6]. Future Outlook - AAR's CEO anticipates continued strong sales growth and further margin expansion in the second half of fiscal year 2025, driven by growth in Parts Supply and synergies from recent acquisitions [7]. - The company expects margins to improve further in fiscal year 2026 as it expands its higher-margin Product Support business [7]. Stock Analysis - AAR's stock is currently in a symmetrical triangle pattern, with a price target of $81.00, indicating a potential upside of approximately 19.84% [10]. - The stock has a low short interest of 1.71% and is rated as a "Buy" by analysts, although it is not among the top recommendations from leading analysts [3][10][11].