What Happened?

Shares of aviation and fleet aftermarket services provider VSE Corporation (NASDAQ: VSEC) jumped 4.7% in the afternoon session after the company agreed to acquire Precision Aviation Group (PAG) for approximately $2.025 billion and released strong preliminary financial results. 

The deal consisted of $1.75 billion in cash and $275 million in equity. This move was expected to be transformational, with projections showing a 50% increase in revenue, expanded global reach, and improved profit margins. The company also anticipated achieving over $15 million in annualized cost savings from the combination. Alongside the acquisition news, VSE Corporation shared its preliminary results for the fourth quarter and fiscal 2025. It forecasted fourth-quarter revenue between $290 million and $304 million and full-year revenue from $1.1 billion to $1.15 billion.

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What Is The Market Telling Us

VSE Corporation’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock gained 11% on the news that the company announced strong second-quarter 2025 financial results, posting record revenue and beating analyst expectations on adjusted earnings. The company's focus on its aviation business fueled this growth, with the Aviation segment's revenue jumping 41.1% compared to the prior year to a record $272.1 million. While the company's GAAP earnings per share missed estimates, its adjusted earnings per share of $0.97 significantly beat analyst forecasts. VSE also reaffirmed its full-year revenue growth projection of 35% to 40% and raised the full-year profitability guidance for its key Aviation segment, which signaled confidence to investors.

VSE Corporation is up 19.6% since the beginning of the year, and at $216.78 per share, has set a new 52-week high. Investors who bought $1,000 worth of VSE Corporation’s shares 5 years ago would now be looking at an investment worth $6,265.

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