Applied Aerospace & Defense, Inc. (AADX)

Price$12.55Cached quoteAs of 2026-09-04 16:23 UTC

AI: Fair-priced

Price checkThe stock has reset sharply, but the valuation still assumes durable growth and better cash conversion.

Applied Aerospace & Defense (NYSE: AADX) now carries an equity value of roughly $2.1 billion using the latest outstanding-share count. Adding June debt and subtracting cash gives an enterprise value near $2.5 billion. Against management’s 2026 guidance midpoint, that is about 3.7 times revenue and 16.3 times adjusted EBITDA. The stock is roughly 39% below its IPO offer level, so expectations have reset, but the EBITDA multiple still assumes solid execution rather than distress-level pricing.

Big pictureDefense and space demand support growth, while leverage and working-capital needs keep the risk profile elevated.

First-half revenue rose to $301.7 million and adjusted EBITDA to $63.0 million, but operating cash flow was negative $82.1 million as working capital and transaction costs absorbed cash. Management expects 2026 capital spending near $50 million. June cash was only $18.1 million, yet the company had $125 million of revolver availability and said those resources plus operating cash should cover at least 12 months. Cash durability therefore depends on second-half collections, lower interest, and less acquisition-related spending.

Business strengthBacklog is substantial and revenue growth is strong, though margins and cash generation remain uneven.

Backlog reached $1.13 billion, but about $178.5 million of the first-half increase came from the CBI acquisition, so not all growth was organic. Second-quarter revenue grew 47.4%, or 19.8% excluding 2026 acquisitions, across space, aviation, and precision-strike work. These markets benefit from defense budgets and launch activity, but program delays and government funding cycles can shift deliveries. Adjusted EBITDA margin slipped to 20.9% for the first half from 23.0%, showing scale has not yet translated into margin expansion.

What could change the storyExecution on guidance and cash conversion could unlock upside; weaker margins or renewed dilution could erase it.

Capital allocation is the swing factor. The IPO raised $635.6 million net and most proceeds went to debt repayment, cutting total debt materially, but outstanding shares jumped after the offering and first-half share-based compensation was unusually large. A bull case needs guidance delivery, backlog conversion, positive operating cash flow, and further debt reduction without major new equity issuance. A bear case is slower organic growth, margins staying near or below 20%, persistent working-capital cash use, or another acquisition funded with debt or shares; then today’s valuation would look demanding.

AI: News

Business development leadership addedA senior defense-industry hire strengthens program capture efforts across space, aviation, and precision-strike markets.

On September 1, Applied appointed Elizabeth Robertson executive vice president of business development. She is tasked with enterprise growth, new-program capture, and strategic customer relationships across the company’s three end markets. Robertson joined from Leidos, where she led business development for a Huntsville defense-sector portfolio, and earlier managed a U.S. Army air and missile defense program into production. The hire signals continued investment in winning new programs after the IPO and recent acquisition expansion.

Strong second-quarter growthSecond-quarter revenue and adjusted EBITDA hit records, while IPO-related compensation drove a large reported loss.

On August 12, Applied reported second-quarter revenue of $167.3 million, up 47.4% year over year, and adjusted EBITDA of $36.4 million, up 38.5%. The reported net loss was $154.0 million, mainly reflecting share-based compensation and IPO-related transaction costs rather than an operating collapse. Management also issued full-year guidance for $670-$690 million of revenue and $150-$155 million of adjusted EBITDA, while backlog stood at $1.13 billion.

IPO resets balance sheetThe June IPO raised fresh equity and most proceeds were directed to paying down substantial borrowings.

On June 4, the company completed its IPO after selling 32.5 million primary shares, with underwriters later buying another 1.65 million. Gross proceeds reached $683.0 million and net proceeds were about $635.6 million. Roughly $626.2 million of IPO proceeds was used to repay revolving and term-loan borrowings. The transaction sharply improved leverage, but it also increased the share count and left the Greenbriar-affiliated holder with roughly 80% ownership, so minority investors still face controlled-company governance.

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Revenue

2024

2025

Net income

2024

2025

Free cash flow

2024

2025

Total cash / debt

CashTotal debt

2024

2025

Financial statements

	2025	2024
Revenue	$498.8M	$399.8M
Gross profit	$139.4M	$98.1M
Gross margin	27.94%	24.53%
Operating expenses	$107.6M	$65.2M
Operating income	$57.0M	$32.9M
Operating margin	11.42%	8.22%
EBITDA	$99.3M	$68.1M
EBITDA margin	19.91%	17.03%
Net income	−$17.0M	−$34.8M
Net profit margin	−3.41%	−8.70%
Basic EPSper basic share	-$0.29	-$0.20
Diluted EPSper diluted share	-$170.24	-$347.66

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

≈80.19%of listed shares

AA&D Holdings, LP138.24M shares · Jun 3, 2026

View holders

Top 20 reported holders of AADX
Holder	% owned
AA&D Holdings, LP	≈80.19%138.24M shares
ALLIANCEBERNSTEIN L.P.	1.93%3.33M shares
Temasek Holdings (Private) Ltd	1.89%3.25M shares
MASSACHUSETTS FINANCIAL SERVICES CO /MA/	1.36%2.34M shares
BAMCO INC /NY/	1.26%2.17M shares
T. Rowe Price Investment Management, Inc.	1.19%2.05M shares
BlackRock, Inc.	1.12%1.92M shares
AMERICAN CENTURY COMPANIES INC	1.01%1.74M shares
Jupiter Topco LLC	0.77%1.33M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	0.74%1.27M shares
NORGES BANK	0.73%1.25M shares
Driehaus Capital Management LLC	0.71%1.23M shares
Ophir Asset Management Pty Ltd	0.69%1.2M shares
VANGUARD CAPITAL MANAGEMENT LLC	0.69%1.19M shares
FEDERATED HERMES, INC.	0.58%1M shares
Capital World Investors	0.58%1M shares
LORD, ABBETT & CO. LLC	0.52%897.24K shares
CITADEL ADVISORS LLC	0.52%889.5K shares
FMR LLC	0.51%874.31K shares
WCM INVESTMENT MANAGEMENT, LLC	0.46%800K shares

Percentages use 172.39M shares of this listed class outstanding on Jun 30, 2026. ≈ compares the latest reported holding with a share total from a different date; it is not a confirmed current stake.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 3 ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys4$1.17M disclosed value

Sells (SEC code S)0$0.00 disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 4, 2026Form 4	Lynch Susan DDirector	BuyCommon Stock	8.0K	$20.00	$160.0K	8.0K
Jun 4, 2026Form 4	McRae Jeffrey L.Chief Financial Officer	BuyCommon Stock	25.0K	$20.00	$500.0K	25.0K
Jun 4, 2026Form 4	Goldstein Scott (NMN)Director	BuyCommon Stock	500	$20.00	$10.0K	4.8K
Jun 4, 2026Form 4	Katzman James CDirector	BuyCommon Stock	25.0K	$20.00	$500.0K	29.3K

Review ownership filings at SEC.gov ↗

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Applied Aerospace & Defense, Inc. (AADX)

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