Breaking Down Park Aerospace Corp. (PKE) Financial Health: Key Insights for Investors

You're looking at Park Aerospace Corp. (PKE) and seeing a classic aerospace materials story: solid revenue growth but a messy bottom line, and you need to know if the dip is a temporary blip or a systemic issue. Honestly, the headline numbers from the fiscal year 2025, which ended in March, tell a mixed story that demands a closer look. PKE posted net sales of $62,026,000, a healthy 10.75% jump from the prior year, which shows their specialized composite materials are defintely in demand, especially with new defense-related opportunities. But here's the quick math: Net Earnings fell sharply by over 21% to just $5,882,000, translating to basic EPS of $0.29. What this estimate hides is that a significant portion of that drop-about $1.1 million in pre-tax charges-was due to storm damage at their Kansas facility, a one-time event that skewed the final net income figure. The real opportunity, then, lies in separating that non-recurring charge from the core operating performance, especially since they still maintain a strong liquidity position, with $65.6 million in cash and marketable securities as of June 2025.

Revenue Analysis

You need a clear picture of where Park Aerospace Corp. (PKE)'s money is coming from to assess its true momentum. The direct takeaway is that Park Aerospace Corp. posted net sales of $62,026,000 for the fiscal year ended March 2, 2025, a solid increase driven by a strategic pivot toward defense-related programs.

This revenue figure represents a year-over-year growth rate of approximately 10.7% compared to the $56,004,000 reported in fiscal year 2024. That's a defintely healthy acceleration, especially when you look back at the more modest growth rates in prior years. The company is primarily an aerospace materials specialist, so its revenue is tied to the production cycles of both commercial and military aerospace platforms.

Breaking Down the Primary Revenue Streams

Park Aerospace Corp.'s revenue streams essentially flow from the sale of advanced composite materials, and for fiscal year 2025, the story is all about the military segment. The business operates across three main geographical segments: North America, Asia, and Europe. But the real financial action is in the end-market split, which shows a significant shift in focus.

Here's the quick math on segment contribution for the fiscal year 2025:

• Military Aerospace: Contributed approximately $26.1 million to total revenue.
• Commercial Aerospace: Accounts for the remainder of the revenue, showing a recovery but no longer dominating the mix.

The military business is not a single product line; it's a diverse portfolio. For example, within that $26.1 million military segment revenue, the breakdown highlights key product lines, providing multiple growth avenues in the defense sector.

Analyzing the Strategic Revenue Shift

The most important change you need to track is the increasing reliance on the defense sector. The military aerospace programs are growing in importance, which is a strategic shift from fiscal year 2021 when commercial aircraft sales made up 51% of the company's revenue. This pivot makes sense: defense spending is less cyclical than commercial aviation. Plus, a specific product line, the C2B fabric under the ArianeGroup Business Partner Agreement, generated $4.4 million in sales in Q4 of fiscal year 2025 alone, demonstrating a successful diversification into specialized materials distribution.

This focus on defense and specialized products, as detailed in the company's Mission Statement, Vision, & Core Values of Park Aerospace Corp. (PKE)., suggests a more stable, albeit slower, growth trajectory. What this estimate hides is the potential for large, lumpy defense contracts to skew quarterly results, but the overall trend is clear: military is the new core. Your next step should be to track the backlog for these key military programs to gauge future revenue stability.

Profitability Metrics

You want to know how well Park Aerospace Corp. (PKE) is converting its revenue into profit, and my analysis of the fiscal year 2025 (FY 2025) data shows a company with solid gross profitability but a net margin that is being compressed by operational costs and one-time items. The good news is that the core business is more profitable than many peers.

For the fiscal year ending March 2, 2025, Park Aerospace Corp. reported net sales of $62.03 million, an increase of 10.1% year-over-year. This top-line growth is strong, but the actual margins tell a more nuanced story about cost management.

Here's the quick math on the key margins for FY 2025:

• Gross Profit Margin: 28.44% ($17.64 million Gross Profit / $62.03 million Revenue)
• Operating Profit Margin: 15.20% ($9.43 million Operating Income / $62.03 million Revenue)
• Net Profit Margin: 9.48% ($5.88 million Net Income / $62.03 million Revenue)

The gap between the Gross Profit Margin and the Operating Profit Margin is where you see the impact of operational efficiency. A drop from 28.44% to 15.20% shows that Selling, General, and Administrative (SG&A) expenses are significant relative to revenue. This is defintely a point to watch, especially as the company brings its new production facility fully online, which has been associated with ongoing underutilization costs impacting gross margins.

Profitability Trends and Industry Comparison

Looking at trends, Park Aerospace Corp.'s profitability has been relatively stable, yet slightly declining on a headline basis. The overall profit margin was reported at 11.6% in the latest period, a slight slip from 11.8% in the prior year. Still, the company managed a 5.5% earnings growth for the latest year, a notable acceleration over its five-year average of 0.7% annually.

When we compare this to the broader Aerospace & Defense (A&D) components sector, Park Aerospace Corp. holds its own, especially on the gross level. For context, a smaller peer like Air Industries Group reported a Gross Profit Margin of 22.3% in Q3 2025, and their Operating Income Margin was much lower at approximately 3.1%.

The company's Gross Margin of 28.44% suggests a strong pricing strategy or efficient direct cost management in its core business of advanced composite materials, especially compared to the 22.3% seen at Air Industries Group. The Operating Margin of 15.20% is also quite healthy, surpassing the ~11% operating margin reported by a major defense contractor like Northrop Grumman. This operational strength supports the company's long-term strategy, which you can read more about here: Mission Statement, Vision, & Core Values of Park Aerospace Corp. (PKE).

What this estimate hides is the impact of special items. While the reported Net Profit Margin was 9.48%, the Net Earnings before special items were $7.867 million, which translates to a much healthier 12.68% margin. This 3.20 percentage point difference is important. It shows the underlying earnings power is stronger than the GAAP net income suggests, and that management is effectively controlling costs in its mature operations, even with sector-wide challenges like supply chain issues.

Debt vs. Equity Structure

You're looking at Park Aerospace Corp. (PKE) and the first thing that jumps out is the balance sheet-it's defintely a rare sight in the capital-intensive aerospace world. The company's financing strategy is simple: almost no debt. This is a deliberate, conservative approach that prioritizes financial stability over aggressive, debt-fueled growth.

As of the most recent quarter, Park Aerospace Corp. (PKE) carries an extremely low level of total debt, reported at approximately $338.00K. When you look closer, much of this is likely short-term liabilities (like leases or minor operational obligations) rather than formal long-term debt. This means the company is essentially self-funding its operations and growth, relying heavily on its retained earnings and shareholder equity.

Here's the quick math on how that translates to their leverage:

• Total Shareholder Equity stands at roughly $105.8 million.
• The Total Debt-to-Equity (D/E) ratio for the most recent quarter is a minuscule 0.32%.

That 0.32% is a powerful number. It tells you that for every dollar of shareholder equity, the company has less than a penny of debt. It's a fortress balance sheet, plain and simple.

To be fair, this low leverage is not the norm in the sector. The average Debt-to-Equity ratio for the broader Aerospace & Defense industry, as of November 2025, is around 0.38 (or 38%). Park Aerospace Corp. (PKE) operates at a fraction of that, which gives them immense flexibility, but also suggests they are not using debt to magnify returns (financial leverage) like many of their peers. You can see more about the company's long-term strategy here: Mission Statement, Vision, & Core Values of Park Aerospace Corp. (PKE).

The company's preference for equity funding is clear, and it's a long-standing trend. There have been no significant debt issuances, credit rating changes, or major refinancing activities reported in 2024 or 2025, precisely because they don't have a debt structure to manage. This balance between debt and equity is heavily skewed toward the latter, which is a major risk mitigator in an industry prone to economic cycles and long, expensive development programs.

What this financial position hides is the opportunity cost: a low D/E ratio can sometimes mean a company is being overly cautious or is missing out on tax-deductible interest payments that could boost earnings per share. Still, in a volatile market, having zero significant debt is a major competitive advantage, allowing management to focus on execution, not on servicing creditors.

For a quick comparison of Park Aerospace Corp. (PKE)'s financing structure against the industry standard:

Your action here is to recognize that this low-leverage profile means PKE is a low-risk investment from a solvency perspective, but its growth won't be amplified by the kind of financial engineering you see at heavily indebted competitors.

Liquidity and Solvency

You need to know if Park Aerospace Corp. (PKE) can cover its short-term bills, and the answer is a resounding yes. The company's liquidity position is exceptionally strong, almost to a fault, suggesting a massive cash stockpile relative to its near-term obligations. This is a fortress balance sheet.

Looking at the latest trailing twelve months (TTM) data ending August 2025, the company's liquidity ratios are staggering. The Current Ratio, which measures current assets against current liabilities, sits at an astounding 17.57. This means Park Aerospace Corp. has over $17 in current assets for every $1 in current liabilities. Even the Quick Ratio (Acid-Test Ratio), which is a stricter measure excluding inventory, is nearly as high at 15.65. That's an incredible buffer.

Here's the quick math on their liquidity position and working capital:

• Current Ratio: 17.57 (TTM as of Nov 2025)
• Quick Ratio: 15.65 (TTM as of Nov 2025)
• Cash Balance: Approximately $61.55 million
• Total Debt: Minimal at $338,000

This massive liquidity means working capital is not a concern; the company has a huge surplus. The Current Ratio is up 61.59% compared to the average of the last four quarters, which shows this high liquidity trend is accelerating, not just a one-off event. This is defintely a strength, but it also raises the question of capital efficiency-is too much cash sitting idle? That's a strategic decision for management.

The cash flow statement for the TTM period ending August 2025 gives us a clear picture of where the cash is moving:

The biggest insight here is the cash from investing, which is a significant $31.43 million inflow. This is not from selling off core assets, but likely from liquidating marketable securities, which helps explain the huge cash balance. Operating Cash Flow (CFO) is positive at $3.17 million, which is good, but it's the smallest component. The financing cash flow is a net outflow, mainly due to the company's commitment to its dividend, which totaled $9.98 million in payments over the TTM period.

The clear action here is that Park Aerospace Corp. has no near-term liquidity concerns. The strength is in its massive cash position and virtually non-existent debt. The opportunity is for management to deploy this capital more aggressively, either through the planned $40-45 million expansion of manufacturing facilities (a future CFI outflow) or through strategic acquisitions, which you can read more about in the full analysis: Breaking Down Park Aerospace Corp. (PKE) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at Park Aerospace Corp. (PKE) and asking the core question: Is this stock a buy, a hold, or a sell? Based on the latest metrics in late 2025, the stock appears expensive on traditional valuation multiples, but analysts still lean toward a 'Buy' consensus, which is a classic disconnect you need to understand.

The quick math shows that Park Aerospace Corp. (PKE) is trading at a premium compared to both the broader market and its sector peers. Your traditional valuation ratios are signaling caution. For instance, the trailing twelve-month (TTM) Price-to-Earnings (P/E) ratio sits around 50.79, which is significantly higher than the market average P/E of about 38.36. This means you are paying a lot for each dollar of Park Aerospace Corp.'s (PKE) earnings.

Also, the Enterprise Value-to-EBITDA (EV/EBITDA) ratio, which is great for comparing companies with different debt loads, is high at approximately 30.5x as of November 2025. This is well above the industry median of 14.1x, suggesting the company is richly valued relative to its operating cash flow before capital structure adjustments. The Price-to-Book (P/B) ratio is around 3.52, which is also elevated, indicating investors are paying over three times the company's net asset value.

• P/E Ratio (TTM): 50.79 (Signals expensive)
• P/B Ratio: 3.52 (Signals premium)
• EV/EBITDA (TTM): 30.5x (Signals richly valued)

Still, the market is pricing in future growth, which is why the stock has performed well. Over the last 12 months, the stock price has climbed by nearly 28.88%, and over the last six months, it's up a strong 39.81%. This upward trend, despite the high multiples, is likely fueled by optimism around their advanced composite materials for the aerospace and defense sectors. You can dig deeper into who is driving this price action by Exploring Park Aerospace Corp. (PKE) Investor Profile: Who's Buying and Why?

When it comes to income, Park Aerospace Corp. (PKE) offers an indicated dividend yield of about 2.70%. That's a decent yield, but here's the limit: the dividend payout ratio is high, sitting at roughly 138.89%. A payout ratio over 100% means the company is paying out more in dividends than it earns in net income, which is defintely not sustainable long-term without tapping into cash reserves or taking on debt. You need to watch that closely.

The analyst consensus, despite the valuation warning signs, is a 'Buy'. This suggests that the Street believes the company's future earnings growth will justify the current high price, or that the intrinsic value is higher than the current trading price. The average analyst price target for 2025, however, is around $18.17, which is slightly below the recent trading price of approximately $19.12, creating a near-term risk. The opportunity here is for Park Aerospace Corp. (PKE) to deliver on its growth promises, validating the premium valuation.

Your action is clear: treat this as a growth stock with a high barrier for performance. Finance: Model a scenario where PKE's EPS growth rate needs to be 20% for the next three years to justify the 50x P/E by Friday.

Risk Factors

You're looking at Park Aerospace Corp. (PKE) because its niche in advanced composite materials for aerospace and defense is compelling, but you need to know where the cracks are. The direct takeaway is this: Park Aerospace Corp. has a rock-solid balance sheet, but its operational and customer concentration risks are real and near-term, plus the dividend payout is a concern.

The company's fiscal year 2025 results show the tension. While adjusted EBITDA hit $11.649 million, storm damage at the Newton, Kansas facilities resulted in a pre-tax charge of $1.098 million, a tangible hit to the bottom line that year. Here's the quick math: a single weather event cost them nearly 10% of their annual adjusted EBITDA, which shows how concentrated their operational risk is in that one location.

• Operational Execution Risk: The planned $35 million manufacturing expansion is a huge opportunity, but it's also a significant execution risk. Hiring and integrating new employees for this expansion will be a challenge, and any delay could stall the anticipated long-term growth in defense and aerospace markets.
• C2B Requalification: The requalification of the C2B fabric, a key material, remains unresolved and is currently awaiting final customer-led testing. This uncertainty limits the company's ability to fully capitalize on higher-margin material sales until the customer gives the final sign-off.
• Underutilized Capacity: A new production facility is defintely underutilized, which means the company is incurring costs, like a portion of the $1.260 million in annual depreciation expense, without the corresponding revenue to offset it. You're paying for capacity you aren't fully using yet.

External and Financial Pressures

The external market conditions and financial structure present their own set of risks. The aerospace industry still grapples with persistent supply chain constraints, especially for jet engines, which can delay customer programs and impact Park Aerospace Corp.'s sales forecasts. Also, the deterioration in the broader aerospace market could reduce demand and pricing for advanced composite materials, a risk the company flags in its filings.

A major strategic risk is customer concentration. Sales to affiliate and non-affiliate subtier suppliers of GE Aerospace accounted for 37.7% of total worldwide net sales in fiscal year 2024. Losing a customer of that magnitude would have a material adverse effect on the business.

From a financial perspective, the stock's valuation is a sticking point. Park Aerospace Corp. trades at a P/E ratio of 56.9x, which is significantly higher than the peer average of 31.6x. This premium valuation means investors are pricing in a lot of future upside, leaving little room for error if any of the operational risks materialize. Plus, the company's annual dividend of $0.50 per share represents a payout of 138.9% of its earnings, indicating the dividend's sustainability is a genuine risk that income investors need to monitor closely. For a deeper dive into who is buying and why, you can check out Exploring Park Aerospace Corp. (PKE) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for where the next wave of growth will come from for Park Aerospace Corp. (PKE), and the answer is clear: the company is strategically positioned to capitalize on a significant ramp-up in both defense and commercial aerospace, backed by a massive capital investment. The key takeaway is that PKE's future revenue is anchored by long-term, sole-source defense contracts and a major jet engine program that is just starting its ascent.

Park Aerospace Corp.'s full-year fiscal year 2025 sales reached $62.0 million, marking a solid 10.7% increase from the prior year. Looking ahead, management anticipates that total revenue for fiscal year 2026 will exceed $70 million, driven by these specific growth levers. The company's balance sheet is defintely a fortress, with over $72 million in cash and no long-term debt, which gives them the flexibility to execute on their expansion plans.

Key Growth Drivers and Revenue Projections

The company's growth is not speculative; it's tied to multi-year programs where PKE is a critical, often sole-source, materials provider. This is a powerful competitive advantage (economic moat), especially in the defense sector, where requalification is a long, expensive process for competitors. Here's the quick math on their core drivers:

• Defense Sector Acceleration: Surging global defense spending is a major tailwind. PKE is the sole-source qualified supplier of ablative composite materials for major missile systems like the Patriot PAC-3. Ablative materials are the high-margin products PKE is pivoting toward.
• GE Aerospace Programs: The conceptual annual revenue outlook for their GE Aerospace jet engine programs is approximately $61.4 million once production reaches full capacity. To put that in perspective, this is nearly the size of their entire FY 2025 revenue, and it compares to the $21.1 million in sales PKE generated from these programs in FY 2024.
• Product Innovation: PKE is the exclusive North American distributor for ArianeGroup's RAYCARB C2®B NG fabric until 2030, a material essential for ablative composites in rocketry and missile systems. This partnership secures a key input for their highest-growth product line.

Strategic Initiatives and Earnings Outlook

You can't meet that kind of demand without capacity, so PKE is making a significant investment. Their primary strategic initiative is a major manufacturing expansion with a capital budget of $40 million to $45 million. This isn't about filling current orders; it's about preparing for the long-term, high-volume production required by the defense and commercial aerospace programs they are locked into. This is a clear signal of management's confidence in future demand.

For the near-term, the company's Q3 fiscal year 2026 sales are forecasted to be between $16.5 million and $17.5 million, with adjusted EBITDA projected to range from $3.7 million to $4.1 million. What this estimate hides, however, is the potential for margin expansion as they transition from selling lower-margin C2B fabric to higher-margin finished ablative materials. The strategic pivot is already showing results, with Q2 FY 2026 adjusted EBITDA hitting $3.401 million (a 20.8% margin).

Here is a snapshot of their recent financial performance and forward outlook:

Their competitive edge rests on their specialized focus and proprietary materials, which are critical for extreme-environment applications. You can review the foundational principles driving their decisions here: Mission Statement, Vision, & Core Values of Park Aerospace Corp. (PKE).