Is LOAR a good stock to buy? We came across a bullish thesis on Loar Holdings Inc. on Horizons Investing’s Substack by Cade. In this article, we will summarize the bulls’ thesis on LOAR. Loar Holdings Inc.’s share was trading at $68.57 as of April 20th. LOAR’s trailing and forward P/E were 91.43 and 87.72 respectively according to Yahoo Finance.
Loar Holdings Inc., through its subsidiaries, designs, manufactures, and sells aerospace and defense components for aircraft, and aerospace and defense systems in the United States and internationally. LOAR is positioned as a specialist serial acquirer in the niche aerospace and defense components market, built by founder and CEO Dirkson Charles through a disciplined strategy of acquiring proprietary, mission-critical parts manufacturers.
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Since its founding in 2012 and IPO in 2024, the company has scaled to roughly $500 million in revenue by supplying highly diversified products—none exceeding 3% of sales—across commercial aerospace, business jets, defense, and smaller industrial markets, with key customers including Boeing, Airbus, Lockheed Martin, and Northrop Grumman.
A defining feature of Loar’s model is its heavy exposure to higher-margin aftermarket revenue from repairs and replacements, which provides recurring cash flow over long aircraft lifecycles and strengthens pricing power due to regulatory requirements and lack of substitutes.
The company’s acquisition strategy focuses on niche monopolistic products with strong OEM relationships, allowing decentralized operations while leveraging industry expertise to drive organic growth and selective synergies. This approach, combined with favorable industry dynamics such as improving aircraft production and potential defense spending tailwinds, supports a long-term compounding thesis. However, risks include execution dependency on management, cyclicality tied to major customers, and the capital-intensive nature of manufacturing.
Financially, Loar generates strong profitability with ~35% EBITDA margins and is gradually deleveraging its balance sheet. While valuation appears elevated at 28x forward EBITDA, the business could deliver ~20% annual revenue growth through a mix of organic expansion and acquisitions, potentially driving EBITDA beyond $400 million within five years. This creates a compelling long-term setup where sustained execution and capital allocation could result in significant equity upside despite current premium multiples.
Previously, we covered a bullish thesis on HEICO Corporation (HEI) by Bulls On Parade in April 2025, which highlighted its niche dominance, disciplined acquisition strategy, and long-term compounding through high-margin aerospace components. HEI’s stock price has appreciated by approximately 20.39% since our coverage. Cade shares a similar view but emphasizes on Loar’s earlier-stage growth and acquisition-led expansion.
Loar Holdings Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held LOAR at the end of the fourth quarter which was 29 in the previous quarter. While we acknowledge the risk and potential of LOAR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LOAR and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
