Is AIR a high-quality business?

AlphaMadera's AlphaQuality grade scores AAR Corp. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how AIR compares to a Buffett-style quality bar.

What is AAR Corp.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to AIR based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes AIR a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

AIR - AAR Corp.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $120.00 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Cyclical & Capital-Intensive

AlphaQuality — archetype-weighted quantitative grade

D+ 41.4 / 100 composite

Composite Grade

Composite of six pillars weighted for cyclical & capital-intensive businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

D 35.2

5yr Avg ROIC 2.6% 23/100
Operating Margin Trend +0.27 pp/yr 63/100

Capital Efficiency

Weight: 15%

D+ 40.9

5yr Avg ROE 4.3% 32/100
5yr Share-Count CAGR 0.4% 58/100

Growth Quality

Weight: 10%

C 55.8

5yr Revenue CAGR 13.9% 89/100
5yr EPS CAGR -23.1% 0/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 15%

C 51.5

5yr FCF Margin 1.8% 34/100
5yr FCF/NI Conversion 0.74x 73/100

Balance Sheet

Weight: 25%

D 33.0

Net Debt / EBITDA 5.61x 10/100
Interest Coverage (EBIT/Int) 1.52x 20/100
Altman Z-Score 3.60 89/100

Stability

Weight: 20%

D+ 42.0

EPS Volatility (σ/μ) 0.73 12/100
Piotroski F-Score 5 56/100
Negative-Revenue Years (5) 1/5 80/100

3 of 3 gurus held; 1 added; 2 trimmed.

Holders: 3
Avg Δ position: -14.4%
New buys: 0
Full exits: 0

Wood decreased -38%
Greenblatt decreased -24%
Cooperman increased +18%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (15%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (10%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (25%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (20%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.