StandardAero (SARO) is back in focus after its 6 August earnings release, which showed higher quarterly and six month sales and net income, and was followed by increased full year revenue guidance for 2026.

StandardAero’s recent earnings beat and guidance raise come against a backdrop of mixed price action. A 10.5% 90 day share price return contrasts with a decline of 5.87% year to date, while the 1 year total shareholder return of 5.08% points to gradually improving momentum.

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StandardAero looks like a solid aerospace services business based on recent results and contract wins, yet the share price has only moved modestly after the earnings beat. Is the stock quietly offering value at today’s levels?

Preferred P/E Multiple of 28.5x: Is It Justified For StandardAero?

Based on recent data, StandardAero trades on a P/E of 28.5x, which sits below peer and industry averages and aligns closely with an estimated fair P/E of 28.6x. At a last close of $27.90, that points to the market pricing the stock at a discount to some valuation estimates while still assigning a full earnings multiple for an aerospace services business.

The P/E multiple compares StandardAero's share price to its earnings per share and is one of the cleaner ways to think about what investors are currently willing to pay for each dollar of profit. For a company providing aerospace engine aftermarket services across commercial, military and business aviation, earnings based measures tend to be watched closely because cash generation is linked to long term service contracts and ongoing maintenance activity. The combination of high quality earnings and profit growth over recent years suggests the market is paying attention to the profit line rather than just top line expansion.

Several valuation checks point in the same direction. StandardAero is flagged as trading at good value versus peers and the wider US Aerospace & Defense industry, with its 28.5x P/E sitting well below the industry average of 39.9x and the peer average of 36.4x. At the same time, the P/E is almost identical to an estimated fair P/E of 28.6x, which suggests a level that the market could reasonably migrate towards if earnings forecasts and quality hold up.

Result: Price-to-earnings of 28.5x (UNDERVALUED).

However, you should also weigh risks such as subdued year to date returns and any future shifts in aerospace service demand that could pressure StandardAero’s earnings power.

Another View On StandardAero’s Value

While the earnings based P/E work suggests StandardAero looks inexpensive versus peers, the SWS DCF model paints an even stronger value picture. It estimates fair value at $38.08 a share versus the recent $27.90 price, which implies a sizeable valuation gap that investors cannot ignore.

Our DCF model uses projected future cash flows rather than current earnings multiples, so it can flag situations where near term profitability does not fully capture the long term cash profile. If both the multiple and cash flow views lean toward undervaluation, how long might this difference between price and value persist? Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out StandardAero for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals across StandardAero’s valuation and recent share price performance, it makes sense to review the full picture now and decide where you stand. To weigh both the concerns and the bright spots before making your own call, start with the 5 key rewards and 2 important warning signs

Looking For More Investment Ideas Beyond StandardAero?

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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.