StandardAero, Inc. (SARO)

Price$24.70Cached quoteAs of 2026-09-08 18:01 UTC

AI: Fair-priced

Price checkThe shares look fairly priced, with growth offset by thin cash yield and debt.

At roughly $8.3 billion of equity value, the stock trades near 26 times trailing reported earnings of about $0.97 per share. Against management’s 2026 adjusted earnings guide of $1.50-$1.57, it is about 16 times earnings. The guided $270-$300 million of adjusted free cash flow—cash left after running and investing in the business, with some license spending excluded—implies only about a 3.4% cash yield. Enterprise value, which adds debt minus cash to stock-market value, is about 11.6 times guided adjusted EBITDA, a profit measure before interest, taxes, depreciation and amortization. The price needs guidance delivery and better cash conversion.

Big pictureProfit growth is real, but cash generation remains lumpy and heavily back-end weighted.

Revenue rose 15.8% in 2025 to $6.06 billion, while operating income climbed 36.7% to $551 million and net income improved to $277 million from $11 million. Operating cash flow reached $317 million, leaving about $234 million after capital spending. The supplied quarterly history shows fourth-quarter operating cash flow alone was $323 million, highlighting back-end concentration. In the first half of 2026, revenue rose 8.8% and net income 35.6%, yet operating cash flow was negative $47 million because working capital absorbed $327 million. Cash durability is therefore less proven than earnings growth.

Business strengthRequired engine maintenance and improving margins support durable earnings, despite customer and travel-cycle dependence.

Maintenance demand is supported by safety rules and scheduled engine servicing, making it less discretionary than aircraft manufacturing. Commercial aerospace supplied about 60% of 2025 revenue, with military and helicopter about 18% and business aviation about 19%, spreading demand across different cycles. Engine Services margin improved to 14.5% in the second quarter of 2026 from 13.2% a year earlier, while the higher-margin Component Repair business slipped to 26.3% from 29.0% on mix. One customer still represented 10.2% of quarterly revenue, and manufacturer licenses remain important dependencies.

What could change the storyFaster cash conversion could unlock upside; rising debt, leadership change, or weak controls could hurt.

At June 2026, StandardAero held $179 million of cash against $2.33 billion of debt, leaving about $2.15 billion after subtracting cash from debt, although $793 million of total liquidity and a 2031 term-loan maturity reduce near-term refinancing pressure. The company repurchased $100 million of stock in the first half and shares outstanding fell about 1%, but debt rose and a $180 million manufacturer license fee was incurred but not yet paid. Upside needs stronger cash conversion and falling leverage; downside grows if cash stays weak, controls remain materially deficient, or the chief-executive transition disrupts execution.

AI: News

Raised 2026 outlookSecond-quarter profits beat expectations and management raised full-year guidance, but the shares still sold off.

On August 6, StandardAero reported $1.60 billion of quarterly revenue, up 4.6%, and adjusted earnings of $0.40 per share. Adjusted EBITDA, a profit measure before interest, taxes, depreciation and amortization, rose 12.3% to $229.9 million. Management lifted 2026 revenue guidance to $6.375-$6.50 billion, adjusted EBITDA to $885-$910 million, and adjusted earnings to $1.50-$1.57 per share. After-hours data showed a drop of roughly 7% despite the beat. The timing suggests expectations were demanding, but it does not prove the release alone caused the decline.

CEO succession announcedLongtime chief Russell Ford will retire, bringing a planned leadership handoff to Paul McElhinney.

On June 2, StandardAero said Russell Ford would retire as chief executive on October 1 after 13 years leading the company. Paul McElhinney, then lead independent director and a 35-year aerospace veteran, will take over. Ford is scheduled to remain executive chairman through year-end and then stay on the board. The planned overlap lowers transition risk, but investors must judge whether new leadership can preserve customer relationships, margin gains and capital discipline. Reported same-day price strength cannot establish that succession news caused the move.

Credit rating upgradedA major credit rater upgraded StandardAero, strengthening the case that its debt is becoming more manageable.

On June 17, S&P Global Ratings raised StandardAero’s issuer rating to BB from BB- and gave the same upgrade to its senior secured debt. This remains below investment grade, but it signals lower perceived credit risk than before. For a company carrying more than $2 billion of debt, a stronger rating can improve refinancing flexibility and eventually borrowing costs. The upgrade followed a Moody’s improvement in May, adding evidence that creditors see better earnings and cash prospects, though it does not remove leverage risk.

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Revenue

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2023

2024

2025

Net income

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2023

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2025

Free cash flow

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2025

Total cash / debt

CashTotal debt

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2025

Financial statements

	2025	2024	2023	2022
Revenue	$6.06B	$5.24B	$4.56B	$4.15B
Gross profit	$897.5M	$754.1M	$635.3M	$545.7M
Gross margin	14.80%	14.40%	13.92%	13.15%
Operating expenses	$346.4M	$350.9M	$298.0M	$283.1M
Operating income	$551.1M	$403.2M	$337.4M	$262.6M
Operating margin	9.09%	7.70%	7.39%	6.33%
EBITDA	$744.7M	$590.3M	$534.5M	$457.9M
EBITDA margin	12.28%	11.27%	11.71%	11.03%
Net income	$277.4M	$11.0M	−$35.1M	−$21.0M
Net profit margin	4.58%	0.21%	−0.77%	−0.51%
Basic EPSper basic share	$0.84	$0.04	-$0.13	-$0.08
Diluted EPSper diluted share	$0.83	$0.04	-$0.13	-$0.08

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

25.56%of listed shares

Carlyle Group Inc.84.59M shares · Jun 30, 2026

View holders

Top 20 reported holders of SARO
Holder	% owned
Carlyle Group Inc.	25.56%84.59M shares
PRICE T ROWE ASSOCIATES INC /MD/	13.69%45.32M shares
GIC Special Investments Pte Ltd / GIC Private Ltd / Hux Investment Pte. Ltd.	≈7.12%23.57M shares
BlackRock, Inc.	6.53%21.6M shares
Allspring Global Investments Holdings, LLC	4.60%15.23M shares
STATE STREET CORP	3.94%13.03M shares
Jupiter Topco LLC	3.71%12.27M shares
VANGUARD CAPITAL MANAGEMENT LLC	3.18%10.53M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	3.01%9.97M shares
VICTORY CAPITAL MANAGEMENT INC	2.97%9.84M shares
NORGES BANK	2.22%7.34M shares
River Road Asset Management, LLC	1.99%6.58M shares
T. Rowe Price Investment Management, Inc.	1.97%6.52M shares
UBS Group AG	1.88%6.24M shares
BESSEMER GROUP INC	1.81%6M shares
BANK OF AMERICA CORP /DE/	1.81%5.98M shares
EARNEST PARTNERS LLC	1.53%5.06M shares
Findlay Park Partners LLP	1.52%5.03M shares
SEI INVESTMENTS CO	1.34%4.44M shares
WELLINGTON MANAGEMENT GROUP LLP	1.27%4.21M shares

Percentages use 330.91M 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 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys2$3.48M disclosed value

Sells (SEC code S)37$4.75B disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Apr 16, 2026Form 4	Chambliss MalisaChief Human Resources Officer	SellCommon Stock	764	$27.36	$20.9K	2.1K
Apr 16, 2026Form 4	Brancato AnthonySee Remarks	SellCommon Stock	1.1K	$27.36	$30.3K	3.0K
Apr 16, 2026Form 4	Krekeler Gregory ClemensSee Remarks	SellCommon Stock	390	$27.36	$10.7K	741
Apr 16, 2026Form 4	Trapp AlexChief Strategy Officer	SellCommon Stock	475	$27.36	$13.0K	1.3K
Apr 16, 2026Form 4	Prebble LewisSee Remarks	SellCommon Stock	1.1K	$27.36	$31.2K	3.0K

Review ownership filings at SEC.gov ↗

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StandardAero, Inc. (SARO)

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