Could Recurring Revenue Define the Next Chapter for AAR (AIR) After Cebu Pacific Deal Renewal?

• On September 16, 2025, Airinmar, a subsidiary of AAR Corp., announced it has signed a multi-year extension of its support services agreement with Philippines-based low-cost carrier Cebu Pacific, continuing component repair cycle management and aircraft warranty management services.
• This renewal highlights the importance of AAR's tailored maintenance solutions in supporting Cebu Pacific’s fleet growth and cost management efforts.
• We’ll explore how extending this long-term service partnership with Cebu Pacific could reinforce AAR’s recurring revenue focus within its investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

AAR Investment Narrative Recap

To own AAR shares, you have to believe in sustained demand for its aftermarket maintenance and parts solutions as global air travel recovers, and that AAR’s recurring service contracts, like the Cebu Pacific renewal, will help offset aviation sector cycles and margin risk. While the Airinmar deal reaffirms AAR’s focus on recurring revenues, it does not move the needle on the company’s most immediate catalyst: scaling new MRO capacity and outpacing commercial peers in distribution, nor does it fundamentally shift the key risk of exposure to airline cost-cutting during downturns.

Of the latest company events, AAR’s upcoming Q1 2026 earnings result set to be released September 23 stands out, as it offers investors direct visibility into whether new contracts and organic growth in Distribution and MRO are translating into higher profitability, a central catalyst for the story’s momentum this year.

But in contrast, investors should be aware that AAR’s core revenue streams are still highly sensitive to broad commercial airline spending cycles, which means ...

Read the full narrative on AAR (it's free!)

AAR's narrative projects $3.2 billion revenue and $293.3 million earnings by 2028. This requires 4.8% yearly revenue growth and an increase in earnings of $280.8 million from the current $12.5 million.

Uncover how AAR's forecasts yield a $87.00 fair value, a 16% upside to its current price.

Exploring Other Perspectives

Retail investors in the Simply Wall St Community assigned fair values between US$87 and US$126.37, drawing from just two perspectives. Some see potential in AAR’s focus on recurring revenues, yet the business’s reliance on airline customers remains a factor you should consider when evaluating upside and downside.

Explore 2 other fair value estimates on AAR - why the stock might be worth as much as 68% more than the current price!

Build Your Own AAR Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your AAR research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.
• Our free AAR research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate AAR's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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