Is SARO a good stock to buy? We came across a bullish thesis on StandardAero, Inc. on Valueinvestorsclub.com by Astor. In this article, we will summarize the bulls’ thesis on SARO. StandardAero, Inc.’s share was trading at $30.11 as of July 2nd. SARO’s trailing and forward P/E were 34.09 and 21.14 respectively according to Yahoo Finance.
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StandardAero, Inc. (SARO) is a pure-play aerospace engine aftermarket services provider whose investment case is built on durable secular growth in global air travel, a leading competitive position, and meaningful free cash flow expansion over the coming years. The company generates all of its revenue from aftermarket services, with its Engine Services segment contributing the vast majority of earnings through maintenance, repair, and overhaul work across commercial, military, and business aviation.
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Despite recent share price weakness driven by higher jet fuel prices, geopolitical uncertainty, and concerns over airline capacity reductions, the long-term demand outlook for aircraft maintenance remains intact as global passenger traffic is still expected to exceed pre-pandemic levels over the decade.
StandardAero holds leading positions across key engine platforms, supported by long-standing partnerships with major OEMs, regulatory approvals, extensive testing capabilities, and sticky customer relationships that create high switching costs and strong demand visibility through multi-year contracts.
The company is particularly well positioned to benefit from the accelerating LEAP engine maintenance cycle, with shop visits expected to increase rapidly as the installed engine base matures. While the LEAP program is currently near breakeven, management expects profitability to improve significantly as technician productivity rises and volumes scale, driving higher margins and additional capacity without substantial capital investment.
Combined with lower capital expenditures, working capital improvements, and continued debt reduction, these factors are expected to support more than 20% annual free cash flow per share growth through the end of the decade. Trading at roughly 11x 2026 EV/EBITDA, below comparable aerospace aftermarket peers, the shares appear undervalued.
Assuming no valuation multiple expansion, the thesis derives a year-end 2028 price target of approximately $44 per share, representing a 24% annualized internal rate of return over three years, with further upside possible through multiple expansion, disciplined acquisitions, share repurchases, and continued operational execution.
Previously, we covered a bullish thesis on HEICO Corporation (HEI) by Bulls On Parade in April 2025, which highlighted its niche aerospace and defense dominance, disciplined acquisition strategy, and long-term compounding model driven by strong capital allocation and high-margin aftermarket and electronics segments. HEI’s stock price has appreciated by approximately 49.19% since our coverage. Astor shares a similar view but emphasizes StandardAero’s LEAP-driven margin expansion and deleveraging-led free cash flow acceleration within aerospace aftermarket services.
StandardAero, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held SARO at the end of the first quarter which was 41 in the previous quarter. While we acknowledge the risk and potential of SARO 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 SARO and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
