Analyzing AAR (NYSE:AIR) and Archer Aviation (NYSE:ACHR)

AAR (NYSE:AIR) and Archer Aviation (NYSE:ACHR) are both mid-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for AAR and Archer Aviation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AAR	0	4	4	0	2.50
Archer Aviation	1	3	5	0	2.44

AAR presently has a consensus target price of $140.60, suggesting a potential upside of 35.21%. Archer Aviation has a consensus target price of $11.50, suggesting a potential upside of 146.83%. Given Archer Aviation’s higher probable upside, analysts clearly believe Archer Aviation is more favorable than AAR.

Insider & Institutional Ownership

90.7% of AAR shares are owned by institutional investors. Comparatively, 59.3% of Archer Aviation shares are owned by institutional investors. 3.1% of AAR shares are owned by company insiders. Comparatively, 5.6% of Archer Aviation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares AAR and Archer Aviation”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AAR	$3.31 billion	1.26	$187.70 million	$4.88	21.31
Archer Aviation	$300,000.00	11,958.41	-$618.20 million	($1.08)	-4.31

AAR has higher revenue and earnings than Archer Aviation. Archer Aviation is trading at a lower price-to-earnings ratio than AAR, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

AAR has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Archer Aviation has a beta of 3.27, meaning that its stock price is 227% more volatile than the S&P 500.

Profitability

This table compares AAR and Archer Aviation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AAR	5.55%	12.99%	6.47%
Archer Aviation	N/A	-40.74%	-35.93%

Summary

AAR beats Archer Aviation on 9 of the 14 factors compared between the two stocks.

About AAR

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Parts Supply segment leases and sells aircraft components and replacement parts. The Repair & Engineering segment provides airframe maintenance services, such as airframe inspection, painting, line maintenance, airframe modification, structural repair, avionics service and installation, exterior and interior refurbishment, and engineering and support services; component repair services comprising maintenance, repair, and overhaul (MRO) services, engine and airframe accessories, and interior refurbishment; and landing gear overhaul services, including repair services on wheels and brakes. This segment also develops specific aircraft components and parts; and designs proprietary designated engineering representative repairs. The Integrated Solutions segment engages in the fleet management and operation of customer-owned aircraft; provision of supply chain logistics services, such as material planning, sourcing, logistics, information and program management, and parts and component repair and overhaul services; and flight hour component inventory and repair services. In addition, the segment provides integrated software solutions comprising Trax, a cloud-based electronic enterprise resource platform, as well as a suite of paperless mobility apps for automating MRO workflows. The Expeditionary Services segment designs, manufactures, and repairs transportation pallets; and containers and shelters for military and humanitarian tactical deployment activities, including armories, supply and parts storage, refrigeration systems, tactical operation centers, briefing rooms, laundry and kitchen facilities, water treatment, and sleeping quarters, as well as engages in provision of engineering, design, and system integration services for specialized command and control systems. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois.

About Archer Aviation

Archer Aviation Inc., together with its subsidiaries, engages in designs, develops, and operates electric vertical takeoff and landing aircraft for use in urban air mobility. The company was formerly known as Atlas Crest Investment Corp. and changed its name to Archer Aviation Inc. The company is headquartered in San Jose, California.