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 to be overvalued based on its P/E ratio of 720, which is significantly higher than peers like ATI, Inc. at 24.85 and Moog, Inc. at 40.73. Additionally, AAR Corp.'s EV to EBITDA stands at 18.20, while its EV to Sales ratio is 1.49, both of which suggest a premium valuation compared to industry norms.
In comparison to its peers, AAR Corp.'s valuation metrics are starkly elevated, with its P/E ratio far exceeding that of AeroVironment, Inc. at 180.12 and Hexcel Corp. at 45.63. This suggests that investors may be overestimating the company's future growth potential. Notably, AAR Corp. has outperformed the S&P 500 over multiple periods, with a year-to-date return of 35.46% compared to the S&P 500's 13.30%, reinforcing the narrative of strong market performance despite its high valuation.