AAR Corp Story

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AIR -- USA Stock  

USD 20.09  0.19  0.95%

AAR Corp is scheduled to announce its earnings today. The next earnings report is expected on the 17th of December 2020. AAR Corp Calculated Tax Rate is relatively stable at the moment as compared to the past year. AAR Corp reported last year Calculated Tax Rate of 17.34. As of 09/24/2020, PPandE Turnover is likely to grow to 16.61, while Average Assets are likely to drop slightly above 1.7 B. As many investors are getting excited about industrials space, it is fair to sum up AAR Corp as an investment option. We will check if the company can maintain a respectable level of debt while minimizing operating losses.
Published over three weeks ago
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Chances of AAR Corp (NYSE:AIR) to fall in October
AAR Corp has 670.9 M in debt with debt to equity (D/E) ratio of 0.74, which is OK given its current industry classification. The entity has a current ratio of 3.68, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. The company has Net Profit Margin of 0.21 %, which implies that it may need a different competitive strategy as even a very small decline in it revenue may erase profits and result in a net loss. This is way below average. In the same way, it shows Net Operating Margin of 4.87 %, which entails that for every 100 dollars of revenue, it generated 0.05 of operating income.
AAR Corp financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of AAR Corp, including all of AAR Corp's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of AAR Corp assets, the company is considered highly leveraged. Understanding the composition and structure of overall AAR Corp debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding AAR Corp Total Liabilities

AAR Corp liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. AAR Corp has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on AAR Corp balance sheet include debt obligations and money owed to different AAR Corp vendors, workers, and loan providers. Below is the chart of AAR Corp short long-term liabilities accounts currently reported on its balance sheet.
You can use AAR Corp financial leverage analysis tool to get a better grip on understanding its financial position

How important is AAR Corp's Liquidity

AAR Corp financial leverage refers to using borrowed capital as a funding source to finance AAR Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. AAR Corp financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between AAR Corp's total debt and its cash.

Is AAR Corp valued sensibly by the market?

The small fall in market price for the last few months could raise concerns from retail investors as the entity it trading at a share price of 17.83 on slow start in volume. The company executives did not add much value to AAR Corp investors in August. However, diversifying your holdings with AAR Corp or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 3.59. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from AAR Corp partners.

Liabilities Breakdown

361.1 M
Current Liabilities
855.9 M
Long-Term Liabilities
Total Liabilities983.86 Million
Current Liabilities361.15 Million
Long-Term Liabilities855.93 Million
Tax Liabilities14.5 Million

Our take on today AAR Corp spike

The kurtosis is down to 0.53 as of today. AAR Corp exhibits very low volatility with skewness of -0.09 and kurtosis of 0.53. However, we advise investors to further study AAR Corp technical indicators to make sure all market info is available and is reliable.

Our Conclusion on AAR Corp

When is the right time to buy or sell AAR Corp? Buying stocks such as AAR Corp isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily bases. To conclude, as of the 24th of September 2020, our analysis shows that AAR Corp responds to the market. The enterprise is undervalued and projects below average probability of distress for the next 2 years. Our final 30 days recommendation on the enterprise is Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of AAR Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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