AAR Corp. (AIR) Reaches New Peak: Does It Have Further Growth Potential?

AAR (AIR) Stock Continues Its Upward Momentum

Recently, AAR (AIR) has demonstrated impressive performance in the stock market, climbing 12.1% over the past month. The company reached a new 52-week peak at $118.81 in the latest trading session. Since the beginning of the year, AAR’s shares have surged 42.8%, outpacing both the Zacks Aerospace sector’s 12.8% increase and the Zacks Aerospace - Defense Equipment industry’s 12.6% return.

What’s Fueling AAR’s Success?

AAR has consistently delivered earnings that exceed expectations, surpassing consensus estimates for four consecutive quarters. In its most recent earnings release on January 6, 2026, the company reported earnings per share (EPS) of $1.18, beating the anticipated $1.02.

Looking ahead, AAR is projected to achieve EPS of $4.85 on $3.2 billion in revenue for the current fiscal year, reflecting a 24.04% rise in earnings and a 15.23% increase in revenue. For the following year, forecasts suggest EPS will reach $5.61 with revenues of $3.44 billion, representing year-over-year growth of 15.67% and 7.42%, respectively.

Examining Valuation Metrics

With AAR recently hitting a new high, investors are considering whether the stock has more room to grow or if a pullback is likely. Evaluating valuation metrics can provide insight into this question.

The Zacks Style Scores offer a comprehensive way to assess stocks beyond just the Zacks Rank. These scores grade stocks from A to F in Value, Growth, and Momentum, along with an overall VGM Score, helping investors align their picks with their preferred investment strategies.

AAR currently holds a Value Score of C, an A for Growth, and a D for Momentum, resulting in a combined VGM Score of B.

From a valuation standpoint, AAR trades at 24.4 times its current fiscal year EPS estimates, which is below the industry average of 37.4 times. On a trailing cash flow basis, the stock’s multiple is 21.6, compared to the peer group’s average of 36. This suggests that, while AAR is not among the most attractively valued stocks, it remains competitive within its sector.

Zacks Rank Overview

The Zacks Rank is a critical factor for investors, often outweighing the VGM Score. Currently, AAR holds a Zacks Rank of #2 (Buy), supported by upward-trending earnings estimates.

Given that stocks rated Zacks Rank 1 (Strong Buy) or 2 (Buy) with Style Scores of A or B are typically recommended, AAR appears well-positioned for further gains in the near future.

Comparing AIR to Industry Peers

While AIR’s performance has been robust, it’s worth considering how it stacks up against other companies in the industry. Innovative Solutions and Support, Inc. (ISSC) is one such peer, holding a Zacks Rank of #2 (Buy), with a Value Score of D, a Growth Score of A, and a Momentum Score of D.

ISSC delivered a strong earnings beat last quarter, surpassing consensus estimates by 150%. For the current fiscal year, ISSC is expected to post EPS of $0.83 on $90.45 million in revenue.

Over the past month, ISSC shares have risen 17.7%, and the stock currently trades at a forward price-to-earnings ratio of 30.37 and a price-to-cash-flow ratio of 23.84.

The Aerospace - Defense Equipment industry ranks among the top 24% of all industries tracked, indicating favorable conditions for both AIR and ISSC beyond their individual fundamentals.

Top Semiconductor Stock Highlighted by Zacks

Zacks has identified a lesser-known semiconductor company that offers products not produced by industry giants like NVIDIA. Positioned to capitalize on the next wave of growth in the sector, this company is just beginning to attract attention—an ideal time for investors to take notice.

With robust earnings expansion and a growing client base, the company is poised to benefit from surging demand in Artificial Intelligence, Machine Learning, and the Internet of Things. The global semiconductor market is expected to soar from $452 billion in 2021 to $971 billion by 2028.

Additional Resources

For more stock recommendations from Zacks Investment Research, you can download their report on the 7 Best Stocks for the Next 30 Days.