VSEC VSE Corporation

VSE Corporation (NASDAQ: VSEC) has successfully acquired Aero 3, a diversified global MRO service provider and distributor specializing in the commercial wheel and brake aftermarket, for $350 million in cash. This strategic acquisition enhances VSE's aviation aftermarket distribution and repair capabilities, strengthening its position in the wheel and brake aftermarket services. The deal was funded through proceeds from VSE's October 2025 public offering of common stock.

VSE Corporation has finalized its $350 million acquisition of Aero 3, a maintenance, repair, and overhaul service provider for commercial wheel and brake aftermarket. This all-cash transaction, funded by VSE's October 2025 stock offering, enhances VSE's aviation aftermarket capabilities and OEM partnerships. The acquisition follows a period of strong performance for VSE, including an 89% stock surge year-to-date and positive Q3 2025 earnings.

Citigroup recently initiated research coverage on VSE Corporation (NASDAQ: VSEC) with a Strong Buy rating, providing a detailed and bullish outlook. This new analyst attention transforms VSE's investment narrative, particularly regarding its pivot to an aviation aftermarket platform, despite risks related to increased leverage and acquisition integration. Investors should consider VSE's projected $1.8 billion revenue and $142.7 million earnings by 2028, which imply a $207.51 fair value, but also explore other perspectives on the company's valuation due to acquisition-driven growth.

Shares of VSE Corporation (NASDAQ:VSEC) rose over 3% after Citigroup initiated coverage with a 'Strong Buy' rating and a $215.00 price target. This positive analyst coverage bolstered investor confidence, building on recent stock momentum. The company's stock has seen significant volatility but has gained 87.8% since the start of the year, trading near its 52-week high.

Shares of VSE Corporation (NASDAQ:VSEC) gained 4.1% on December 19, 2025, after Citigroup initiated coverage with a Strong Buy rating and a price target of $215.00, suggesting a potential upside of nearly 27%. This move reflects positive momentum for the stock, building on recent gains, and indicates bolstered investor confidence in the company's future following the prominent analyst coverage.

VSE (VSEC) has experienced a strong multi-year performance, with a 276.91% shareholder return over three years, and its recent stock pullback is drawing investor attention. Despite trading below analyst targets, the company's valuation faces scrutiny, with a price-to-earnings ratio of 67x, significantly higher than the aerospace and defense average. The narrative suggests VSE is 18.9% undervalued with a fair value of $207.51 due to successful acquisition integration and margin expansion, but this relies on smooth deal integration and robust aviation demand.