Aviation parts and services provider VSE is Monday's pick for IBD 50 Growth Stocks To Watch. VSE stock reached a new high Monday morning and is in a buy zone.
The company reported robust first-quarter earnings results and gave a sales outlook that was above views last Tuesday.
VSE provides parts distribution and maintenance, repair and overhaul services for aircraft components and engine accessories. It serves commercial, cargo and military customers.
On May 1, it acquired Turbine Weld Industries for approximately $50 million in cash. Turbine Weld specializes in high-value engine component repairs. In April, VSE signed a five-year agreement with Eaton to provide repair and overhaul on hydraulic components for commercial transport and regional aircraft.
The IBD 50 stock ranks No. 2 of 31 stocks in the Commercial Services-Consulting industry group, which holds the 100th spot out of the 197 industry groups that Investor's Business Daily tracks.
Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks
VSE Stock In A Buy Zone
VSE stock reached a record high to start the session Monday, but trimmed larger gains to around 3%.
The stock broke out of a newly formed cuplike base with a 128.72 buy point Thursday in heavy volume, following an earnings gap up of 7.8% Wednesday.
Shares are in the 5% buy zone up to 135.16, according to MarketSurge pattern recognition.
Its relative strength line reached a 52-week high. The aviation parts stock has climbed around 39% so far this year.
Aviation Parts Maker Greatly Improves Bottom Line
VSE beat first-quarter earnings and sales estimates. Its first-quarter profit grew 73% following 6% in the previous quarter and three declining quarters before that.
Its first-quarter sales growth accelerated to 58% from 18% and 27% in the prior two quarters.
"We proudly delivered record revenue and profitability in the first quarter and completed a critical chapter in our multiyear strategic transformation into a pure-play aviation aftermarket parts and services provider," VSE Chief Executive John Cuomo said in the earnings release.
VSE also reaffirmed its full-year 2025 revenue forecast of 35% to 40% growth, which topped views. Analysts call for full-year 2025 profit to increase 23% then 30% in 2026. This follows a 17% drop in 2024.
Moderate Institutional Buying
Its IBD Accumulation/Distribution Rating of B indicates moderate institutional buying over the last 13 weeks.
Mutual funds have increased their positions in VSE stock for eight straight quarters, according to IBD Stock Checkup. Mutual funds own 83% of shares, while management has a 13% stake in the company.
Lastly, it holds a 96 Relative Strength Rating and a 96 Composite Rating.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
