VSE (VSEC) delivered another strong quarter in Q2 as organic growth and margin expansion exceeded expectations, supporting a higher full-year outlook, RBC Capital Markets said in a note Friday.
Q2 revenue was $449 million, with organic growth of about 14%, while adjusted earnings before interest, taxes, depreciation, and amortization margin reached 19.2%, driven largely by the company's core maintenance, repair and overhaul, or MRO, and distribution businesses, with additional benefit from recent acquisitions, the investment firm said.
VSE raised its 2026 revenue growth outlook to about 63% and increased its adjusted EBITDA margin guidance to about 18.9%. Further margin expansion is expected over time, potentially above 21%, helped by growth in the parts business and acquisition mix, according to the note.
RBC Capital Markets maintained an outperform rating on VSE and raised the price target to $265 from $240.
Shares of VSE were down over 3% in Friday trading.
Price: $217.70, Change: $-7.75, Percent Change: -3.44%