The 13.5% YoY jump in SARO’s Q2‑2025 revenue (to $1.53 bn) is being paired with a dramatic swing in profitability – net‑income margin leapt from 0.4% to 4.4% and adjusted EBITDA margin rose to 13.4%. Because earnings are accelerating faster than top‑line growth, the market can expect a moderate multiple expansion rather than a full‑tilt price‑to‑sales premium.
Fundamentals: The 20.1% rise in adjusted EBITDA to $204.6 mm lifts the EV/EBITDA ratio (EV ≈ market cap + net debt) from roughly 9× to about 10–11×, still below the 12–13× range of comparable aerospace‑services peers. The P/E will move from a deep‑value 8× (based on the prior‑year loss) to roughly 12–14× on the new $67.7 m net income, a modest but meaningful expansion that signals the market is beginning to price‑in the higher margin mix.
Technical & market dynamics: SARO’s stock has been trading near its 200‑day moving average, with the recent earnings beat providing a catalyst that could push the price above that trend line. In a risk‑on environment for aerospace services—where demand for aircraft maintenance and component repair is still robust—the upside potential is reinforced by the company’s improving cost structure.
Actionable insight: With the earnings margin upgrade already justifying a higher EV/EBITDA and P/E, the stock is positioned for a 2–4% short‑term rally if it breaks above the 200‑day average on volume. Traders can consider a buy‑on‑dip around the current level with a stop just below the 200‑day line, targeting a 10–12% upside over the next 4–6 weeks. If the price begins to test the upper end of the peer‑group EV/EBITDA range (≈13×), a partial profit‑taking or tightening of the stop would be prudent, as further multiple expansion would start to price in the risk of margin compression if growth slows.