Stock fact sheet · data as of
AAR Corp. (AIR): fair value, margin of safety and Wheel Score
Industrials · Aerospace & Defense · United States · High Growth
Is AIR undervalued?
At 97.98 (close of 16 Oct 2026), AIR trades 28% under the GLS average fair value of 136.04. 4 of the 7 models that produced a value land above the price. A discount of this size counts as a positive margin of safety in every GLS screen; whether it is enough depends on the rest of the picture - the health score, the moat and the option premium below.
The 7 models disagree widely: EPV gives 54.26 while GLS Growth gives 298.99. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files AIR under High Growth: revenue and earnings growing fast enough that the growth-based models carry the valuation.
Nine valuation models for AIR
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | - | - | Present value of the projected free cash flows, discounted at the cost of capital; no value tonight |
| Graham Number | 69.53 | -29% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 189.44 | +93% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 76.12 | -22% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 298.99 | +205% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 114.27 | +17% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 149.69 | +53% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | - | - | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend; no value tonight |
| EPV | 54.26 | -45% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | 2.24 | -98% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 150.00 | +53% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
On financial health AIR scores 7/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is 5.3 out of 10: a ten-year record that is consistent in some of the metrics the score tracks (revenue, earnings, margins, cash flow, returns on capital) and patchy in others.
Returns on capital are moderate - ROIC 7.0%, ROE 11.0%, ROA 5.6% - with debt at 0.58 times equity and a free-cash-flow yield of 3.8%.
AAR Corp. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Product 66%, Service 34% (quarter Q1 FY2027).
Institutional ownership scores 10/10, insider activity 3/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 7 / 9 | ROIC | 7.0% |
|---|---|---|---|
| GLS Moat | 5.3 / 10 | ROE | 11.0% |
| Debt / equity | 0.58 | ROA | 5.6% |
| Free-cash-flow yield | 3.8% | Payout ratio | 0% |
| Institutions | 10 / 10 | Insiders · Congress | 3 · 5 / 10 |
Wheel Score 83: Prime
AIR scores 83 out of 100 on the Wheel Score, in the Prime band (80 and above), which fewer than one stock in twenty reaches on any night. The score blends five things a wheel trader checks before selling a cash-secured put: the margin of safety (Value, 24/25), Piotroski health (16/20), the GLS moat (8/15), the option premium on offer (20/20) and how easily the stock trades (15/20).
Implied volatility is 45% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 4,528 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 616k shares a day on a market cap of $3.9B, with a beta of 1.13; the Stability part of the Wheel Score gives that 15 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 24 / 25 | 28% margin of safety | |
| Health | 16 / 20 | Piotroski 7/9 | |
| Moat | 8 / 15 | moat 5.3/10 | |
| Premium | 20 / 20 | implied volatility 45% | |
| Stability | 15 / 20 | 616k shares/day, $3.9B cap, beta 1.13 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 5 Jan 2027, 81 days away - outside the window of a 30-45-day put sold today.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Aerospace & Defense
The 12 companies below are the closest to AAR Corp. by market cap within the Aerospace & Defense industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| BETA BETA Technologies, Inc. | 18.80 | - | - | 45Weak | $4.2B |
| VSEC VSE Corporation | 158.65 | 38.40 | -313% | 52Fair | $4.5B |
| KRMN Karman Holdings Inc. | 33.90 | 9.79 | -246% | 55Fair | $4.5B |
| MDA MDA Space Ltd | 28.67 | 15.58 | -84% | 54Fair | $4.6B |
| MRCY Mercury Systems, Inc. | 76.41 | 13.54 | -464% | 41Weak | $4.7B |
| AMTM Amentum Holdings, Inc. | 19.09 | 30.89 | +38% | 85Prime | $4.7B |
| PL Planet Labs PBC | 14.13 | 3.15 | -348% | 43Weak | $4.7B |
| ACHR Archer Aviation Inc. | 4.27 | 1.40 | -204% | 35Weak | $3.3B |
| FLY Firefly Aerospace Inc. | 17.83 | - | - | 45Weak | $3.0B |
| LOAR Loar Holdings Inc. | 62.74 | 26.80 | -134% | 56Fair | $5.9B |
| DCO Ducommun Incorporated | 170.59 | 43.00 | -297% | 43Weak | $2.6B |
| AVAV AeroVironment, Inc. | 123.22 | 3.54 | -3378% | 45Weak | $6.3B |
Screen the whole market the same way
A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the same eight-rule screen, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about AIR
Is AIR undervalued right now?
By the GLS models, moderately: at 97.98 the stock trades 28% below the average fair value of 136.04 (data as of 16 Oct 2026).
What is the Wheel Score of AIR and what does it mean?
AIR scores 83 out of 100 (Prime). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for AIR?
136.04 per share as of 16 Oct 2026 - the simple average of the 7 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does AAR Corp. report earnings next?
The next earnings report is due on 5 Jan 2027, 81 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does AIR have listed options, and how liquid are they?
Yes. The nightly snapshot found 294 listed contracts with 4,528 open interest across all expiries and implied volatility of 45% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.