Is AAR Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for AAR Corp. has moved from attractive to very expensive, indicating a shift towards overvaluation. The company appears overvalued based on its P/E ratio of 720, significantly higher than peers like ATI, Inc. at 24.85 and Moog, Inc. at 40.73. Additionally, AAR Corp. has an EV to EBITDA ratio of 24.56, which is also elevated compared to the industry averages.
In comparison to its peers, AAR Corp.'s valuation metrics suggest it is trading at a premium, particularly when juxtaposed with AeroVironment, Inc. and Hexcel Corp., which are both classified as very expensive but have lower P/E ratios of 180.12 and 45.63, respectively. Despite this overvaluation, AAR Corp. has delivered impressive returns, outperforming the S&P 500 over multiple periods, including a 35.46% YTD return compared to the S&P 500's 13.30%.