MeritValue

AAR CORP

AIRdata completeness 100%18 fiscal years on file

Data notes: no data for concept 'investmentsAtFairValue'; no data for concept 'netInvestmentIncome'; no data for concept 'realEstateImpairment'

The thesis, from the filings

AAR CORP earns about 5% on invested capital, but has diluted owners by 7% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $21.04 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025FY 2026
Revenue$1.82B1$1.99B2$2.32B3$2.78B3$3.31B3
Net income$78.7M4$90.2M5$46.3M6$12.5M6$187.7M6
Operating cash flow$75.2M7$23.3M8$43.6M9$36.1M9$98.7M9
Capital expenditure$17.3M10$29.5M11$29.7M12$34.7M12$36.6M12
Free cash flow (derived)$57.9M7−$6.2M8$13.9M9$1.4M9$62.1M9
Total debt$98.9M13$269.7M14$985.4M15$968M16$893.9M16
Cash & equivalents$53.5M17$68.4M18$85.8M19$96.5M20$84M20
Diluted shares36.0M35.1M35.4M35.8M38.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$443.7
your share of equity
Profit it earned you last year
$48.88
Free cash flow it threw off
$16.17
Debt you’d be carrying
$232.79

10 shares is a claim on $443.7 of net worth that earned you $48.88 and generated $16.17 of cash last year, against $232.79 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
5% avg · 5y
FY22 —FY23 8%FY24 4%FY25 1%FY26 7%

It earned an average 5% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+7% shares · 5y

Share count is up 7% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 804% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.5.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$13.9M
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$13.9M
Earnings Power Value
$21.04
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$78.7M
  • growthAssumed0.0%
Graham Number
$69.66
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2022-05-31 · accession 0001104659-24-080890 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2023-05-31 · accession 0001410578-25-001475 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2024-05-31 · accession 0001104659-26-085459 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2022-05-31 · accession 0001104659-24-080890 (NetIncomeLoss)
  5. 10-K · period ending 2023-05-31 · accession 0001410578-25-001475 (NetIncomeLoss)
  6. 10-K · period ending 2024-05-31 · accession 0001104659-26-085459 (NetIncomeLoss)
  7. 10-K · period ending 2022-05-31 · accession 0001104659-24-080890 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-05-31 · accession 0001410578-25-001475 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2024-05-31 · accession 0001104659-26-085459 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-05-31 · accession 0001104659-24-080890 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2023-05-31 · accession 0001410578-25-001475 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2024-05-31 · accession 0001104659-26-085459 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-05-31 · accession 0001104659-23-082069 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2023-05-31 · accession 0001104659-24-080890 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2024-05-31 · accession 0001410578-25-001475 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2025-05-31 · accession 0001104659-26-085459 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2022-05-31 · accession 0001104659-23-082069 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-05-31 · accession 0001104659-24-080890 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-05-31 · accession 0001410578-25-001475 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2025-05-31 · accession 0001104659-26-085459 (CashAndCashEquivalentsAtCarryingValue)