StandardAero, Inc. (NYSE: SARO)

Sector: Industrials Industry: Aerospace & Defense CIK: 0002025410
Market Cap 10.15 Bn
P/B 3.93
P/E 54.96
P/S 1.73
ROIC (Qtr) 7.14
Div Yield % 0.00
Rev 1y % (Qtr) 20.35
Total Debt (Qtr) 2.56 Bn
Debt/Equity (Qtr) 0.99

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 97.50M provide 2.21x coverage of short-term debt 44.05M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 3.77B provide exceptional 8.79x coverage of deferred revenue 428.66M, showing strong service capability backing.
  • Cash reserves of 97.50M provide ample 75.82x coverage of acquisition spending 1.29M, enabling strategic growth opportunities.
  • Tangible assets of 3.77B provide robust 6.26x coverage of other current liabilities 602.02M, indicating strong asset backing.
  • Strong free cash flow of 7.14M provides 5.55x coverage of acquisition spending 1.29M, indicating disciplined M&A strategy.

Bear case

  • Operating cash flow of 102.05M barely covers its investment activities of (142.41M), with a coverage ratio of -0.72, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 97.50M against inventory of 956.73M, the 0.10 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 102.05M provides insufficient coverage of deferred revenue obligations of 428.66M, which is 0.24x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 102.05M shows concerning coverage of stock compensation expenses of 27.39M, with a 3.73 ratio indicating potential earnings quality issues.
  • Operating cash flow of 102.05M provides minimal 0.99x coverage of tax expenses of 103.56M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Geographical Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Aerospace & Defense
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GE General Electric Co 342.94 Bn 42.54 7.80 20.84 Bn
2 RTX RTX Corp 252.05 Bn 38.24 2.93 40.71 Bn
3 BA Boeing Co 174.43 Bn -17.16 2.16 53.35 Bn
4 LMT Lockheed Martin Corp 126.61 Bn 30.15 1.73 22.19 Bn
5 GD General Dynamics Corp 95.62 Bn 22.69 1.86 8.01 Bn
6 NOC Northrop Grumman Corp /De/ 89.30 Bn 22.22 2.18 16.96 Bn
7 HWM Howmet Aerospace Inc. 88.16 Bn 60.80 11.05 3.19 Bn
8 TDG TransDigm Group INC 80.97 Bn 43.39 9.17 30.02 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.90 3.58
EV to Cash from Ops. EV/CFO 123.56 58.38
EV to Debt EV to Debt 4.92 98.04
EV to EBIT EV/EBIT 26.97 19.42
EV to EBITDA EV/EBITDA 18.26 33.60
EV to Free Cash Flow [EV/FCF] EV/FCF 1,765.88 91.66
EV to Market Cap EV to Market Cap 1.24 1.13
EV to Revenue EV/Rev 2.15 11.27
Price to Book Value [P/B] P/B 3.93 4.81
Price to Earnings [P/E] P/E 54.96 31.79
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.75
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 22.95
Dividend per Basic Share Div per Share (Qtr) 0.00 0.70
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 14.15
Interest Coverage Int. cover (Qtr) 2.61 -18.00
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -5.91 -50.32
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 90.19 1,609.43
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.75
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 146.93 -30.98
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 19.14 10.65
EBIT Growth (1y) % EBIT 1y % (Qtr) 23.51 -26.90
EBT Growth (1y) % EBT 1y % (Qtr) 351.42 -27.25
EPS Growth (1y) % EPS 1y % (Qtr) 700.00 -99.21
FCF Growth (1y) % FCF 1y % (Qtr) -83.05 6.61
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 23.75 -5.55
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.88 0.51
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.07 1.76
Current Ratio Curr Ratio (Qtr) 2.18 3.72
Debt to Equity Ratio Debt/Equity (Qtr) 0.99 0.07
Interest Cover Ratio Int Coverage (Qtr) 2.61 -18.00
Times Interest Earned Times Interest Earned (Qtr) 2.61 -18.00
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.30 -345.84
EBIT Margin % EBIT Margin % (Qtr) 7.96 -382.63
EBT Margin % EBT Margin % (Qtr) 4.91 -387.93
Gross Margin % Gross Margin % (Qtr) 15.00 -33.31
Net Profit Margin % Net Margin % (Qtr) 3.10 -389.13