AARFRA:ARZ +3.99%83 Gross Margin % is 18.31% as of Feb. 2026, which is 9% above its 10-year median of 16.76. GuruFocus rates FRA:ARZ with a GF Score™ of 83/100 and a GF Value™ of €74.65 (Significantly Overvalued). The stock has 7 warning signs investors should review. Among 342 Aerospace & Defense companies, AAR ranks worse than 68.42% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. AAR's Gross Profit for the
three
months ended in Feb. 2026 was €131 Mil. AAR's Revenue for the
three
months ended in Feb. 2026 was €715 Mil. Therefore, AAR's Gross Margin % for the quarter that ended in Feb. 2026 was 18.31%.
The historical rank and industry rank for AAR's Gross Margin % or its related term are showing as below:
FRA:ARZ'
s Gross Margin % Range Over the Past 10 Years
Min: 12.99 Med: 16.76 Max: 19.07
Current: 19
During the past 13 years, the highestGross Margin % of AAR was 19.07%. The lowest was 12.99%. And the median was 16.76%.
FRA:ARZ's Gross Margin % is ranked worse than 68.42% of 342
companies
in the Aerospace & Defense industry
Industry Median: 26.65
vs FRA:ARZ: 19.00
AAR had a gross margin of 18.31% for the quarter that ended in Feb. 2026 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for AAR was 7.00% per year.
AAR (FRA:ARZ) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
AAR had a gross margin of 18.31% for the quarter that ended in Feb. 2026 => No sustainable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
AAR Gross Margin % Related Terms
AAR Gross Margin % Historical Data
* Premium members only.
The historical data trend for AAR's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FRA:ARZ vs KRMN, VSEC, MRCY: Gross Margin % Comparison
For the Aerospace & Defense subindustry, AAR's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
AAR Gross Margin % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, AAR's Gross Margin % distribution charts can be found below:
* The bar in red indicates where AAR's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
AAR (FRA:ARZ) has a Gross Margin % of 18.31% as of Feb. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on AAR and its competitors. This is near median its historical median of 16.76. Over the past decade, AAR's Gross Margin % has ranged from 12.99 to 19.07. According to the industry distribution chart, AAR ranks #234 out of 342 companies in the Aerospace & Defense industry, placing it in the top 68.4%.
Is AAR's Gross Margin % too high?
AAR's current Gross Margin % of 18.31% is near median its 10-year median of 16.76. Over the past 10 years, this metric has ranged from a low of 12.99 to a high of 19.07. The Aerospace & Defense industry median Gross Margin % is 26.65. AAR's value of 18.31% is 31.3% below this industry median. Based on the distribution chart, AAR ranks #234 out of 342 companies in the Aerospace & Defense industry, which is below the industry midpoint. Overall, AAR has a GF Score™ of 83/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does AAR's Gross Margin % compare to KRMN and VSEC?
According to the Aerospace & Defense industry distribution chart, AAR ranks #234 out of 342 companies for Gross Margin %. This places AAR in the lower half of its industry. The industry median Gross Margin % is 26.65. AAR's value of 18.31% is 31.3% below this benchmark. Historically, AAR's own Gross Margin % has ranged from 12.99 to 19.07 over the past decade. While the company's 10-year median is 16.76 vs. the industry median of 26.65, AAR has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for an Aerospace & Defense company?
The median Gross Margin % among Aerospace & Defense companies is 26.65, based on 342 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. AAR's current Gross Margin % of 18.31% is 31.3% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on AAR and its competitors. For the Aerospace & Defense industry, the median Gross Margin % is 26.65 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. AAR's current Gross Margin % is 18.31%, which is near median its own 10-year median of 16.76. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is AAR stock overvalued right now?
Based on GuruFocus' analysis, AAR (FRA:ARZ) is currently considered Significantly Overvalued. The stock's GF Value™ is €74.65, compared to a current price of €125.00 — trading 67.4% above its estimated fair value. The current Gross Margin % is 18.31%, which is near median its 10-year median of 16.76 and 31.3% below the Aerospace & Defense industry median of 26.65. AAR's overall GF Score™ is 83/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For AAR (FRA:ARZ), the current Gross Margin % is 18.31% as of Feb. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is AAR (FRA:ARZ) Overvalued in 2026?
Based on GuruFocus' analysis, AAR stock appears to be overvalued.
The current stock price of €125.00 is trading 67.4% above its estimated GF Value™ of €74.65.
GuruFocus considers AAR to be Significantly Overvalued.
Key valuation signals for FRA:ARZ:
Gross Margin %: 18.31% (near median its 10-year median of 16.76)
GF Value™: €74.65 vs. price of €125.00 (67.4% above fair value)
Industry Position: 31.3% below the Aerospace & Defense median (#234 of 342)
No single metric tells the full story. See the FRA:ARZ stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
AAR Corp is engaged in providing products and services to aviation, government and defense market. It operates in segments namely: The parts supply segment majorly consists of sales and leasing of USM and aftermarket distribution of new, OEM-supplied replacement parts; Repair & Engineering segment provides airframe maintenance, component repair, and landing gear overhaul services; Integrated Solutions segment consists of its fleet management and operations of customer-owned aircraft, customized performance-based supply chain logistics programs in support of the U.S. Department of Defense, flight hour component inventory; and The Expeditionary Services segment consists of products and services supporting the movement of equipment and personnel by the U.S. and foreign governments and NGOs.
83GF Score
Get the complete analysis for FRA:ARZ
Gross Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
FRA:ARZ has been successfully added to your 
