Our latest analysis of Moog Inc. (Class B) (MOG.B), updated on November 4, 2025, provides a comprehensive evaluation across five critical angles, including its business moat, financial health, and future growth. This report benchmarks MOG.B against key competitors such as Parker-Hannifin Corporation (PH), Woodward, Inc. (WWD), and Curtiss-Wright Corporation (CW) to determine its fair value through the investment framework of Warren Buffett and Charlie Munger.
The overall outlook for Moog Inc. is mixed. The company is a key supplier of critical control systems for aerospace and defense. It is delivering solid revenue growth, backed by stable long-term contracts. However, this is challenged by very weak cash flow and rising debt. Moog's profitability also lags behind top competitors, and its growth prospects are modest. Currently, the stock's valuation appears high, suggesting limited near-term upside. Investors may want to wait for improved cash generation before considering a position.
US: NYSE
Moog Inc.'s business model revolves around designing and manufacturing highly complex motion and fluid control systems for applications where performance and reliability are paramount. The company operates in three main segments: Aircraft Controls, which provides flight control systems for commercial and military aircraft; Space and Defense Controls, which supplies systems for missiles, satellites, and naval vessels; and Industrial Systems, which serves markets like medical, energy, and factory automation. Revenue is generated through long-term contracts for original equipment manufacturing (OEM) on new platforms and, crucially, through higher-margin aftermarket services, including spare parts and repairs for its large installed base.
At its core, Moog makes money by becoming an indispensable, sole-source supplier for the life of a program, which can often span 30 years or more. Once its components are designed into an aircraft like the Airbus A350 or a defense platform like a Virginia-class submarine, they cannot be easily replaced due to enormous re-certification costs and technical barriers. This creates a sticky customer base and a long tail of profitable aftermarket revenue. Moog's main cost drivers are its highly skilled engineering workforce, research and development (R&D) to maintain a technological edge, and the procurement of specialized raw materials. It sits in the value chain as a critical Tier-1 or Tier-2 supplier to aerospace and defense prime contractors.
Moog's competitive moat is narrow but deep, built almost entirely on high switching costs and its reputation for engineering excellence. The regulatory hurdles from agencies like the FAA mean that once Moog's part is certified, it is effectively locked in. The company does not possess significant economies of scale compared to giants like Parker-Hannifin, nor does it benefit from network effects. Its strength lies in its specialized intellectual property and the trust it has built with customers over decades on mission-critical applications. This makes its position on existing programs very secure.
However, this focused model also creates vulnerabilities. Moog's profitability is consistently lower than that of its more financially-driven or larger-scale peers. Its operating margins of around 10% are less than half of what competitors like HEICO or TransDigm generate. This limits its financial flexibility for large acquisitions or shareholder returns. The business is also subject to the cyclicality of commercial air travel and the unpredictability of government defense budgets. In conclusion, Moog has a resilient business model with a defensible niche, but its competitive edge does not translate into the superior financial returns seen elsewhere in the sector.
A detailed look at Moog's financial statements reveals a company successfully growing its revenue but struggling with efficiency and balance sheet management. On the income statement, Moog posted strong revenue of $971.36 million in its most recent quarter, a 7.36% increase year-over-year, building on annual revenue of $3.61 billion. Margins have been remarkably stable, with operating margin holding steady in the 10-11% range, suggesting good cost control and pricing power. This consistency is a positive sign in a complex industry.
The balance sheet, however, presents some red flags. Total debt has climbed from $1.05 billion at the end of the last fiscal year to $1.28 billion in the latest quarter. This has increased the company's leverage, with the debt-to-EBITDA ratio rising from 2.09x to a more concerning 2.5x. While the current ratio of 2.43 indicates sufficient short-term liquidity to cover immediate obligations, the trend of rising debt warrants close monitoring as it can reduce financial flexibility in the future.
The most significant area of concern is cash flow generation. For the full fiscal year 2024, Moog generated only $46.33 million in free cash flow from over $3.6 billion in sales, an extremely low conversion rate. While the most recent quarter showed a strong rebound with $92.67 million in free cash flow, the preceding quarter produced just $1.82 million. This inconsistency and the poor annual performance suggest challenges in managing working capital, particularly inventory and receivables. In summary, Moog's financial foundation appears stable enough to support operations, but the combination of weak cash conversion and increasing leverage introduces considerable risk for investors.
This analysis covers Moog's performance over the last five fiscal years, from FY2020 through FY2024. During this period, Moog demonstrated its resilience and ability to grow its top line, but a deeper look reveals persistent challenges in translating that growth into higher margins and stable cash flow. The company's record shows a business with solid engineering and program execution, but one that struggles with the operational efficiency and financial discipline seen at best-in-class aerospace and defense suppliers.
From a growth perspective, Moog's record is solid. Revenue expanded from $2.885 billion in FY2020 to $3.609 billion in FY2024, a compound annual growth rate (CAGR) of about 5.7%. Earnings per share (EPS) recovered dramatically from a pandemic-era low of $0.28 in FY2020 to $6.48 in FY2024. This consistent top-line and bottom-line growth is a key strength. However, the quality of these earnings is questionable when looking at profitability. Operating margins have been stuck in a narrow band, moving from 8.14% in FY2020 to 10.43% in FY2024. While the recent improvement is positive, these figures are substantially lower than competitors like Curtiss-Wright (~16%) or Parker-Hannifin (~21%), indicating a structural disadvantage in pricing power or cost control.
The most significant weakness in Moog's historical performance is its cash flow generation. Free cash flow (FCF) has been highly erratic over the last five years: $190.9M, $164.5M, $107.4M, -$37.4M, and $46.3M. The negative FCF in FY2023, driven by a large increase in inventory, highlights significant working capital management issues. This unreliability constrains the company's ability to deleverage, invest for growth, or meaningfully increase shareholder returns beyond its modest, slowly growing dividend. While the company has engaged in share buybacks, they have been inconsistent and have only managed to keep the share count from rising significantly. Total shareholder returns have consequently trailed those of more efficient peers.
In conclusion, Moog's historical record does not inspire complete confidence. The company has proven it can grow, which is a fundamental positive. However, its failure to meaningfully expand margins or generate predictable free cash flow over a five-year period is a major concern. This track record suggests that while Moog is a stable and important supplier in its niche, it has not demonstrated the operational excellence or financial resilience of the industry's top performers.
This analysis assesses Moog's growth potential through fiscal year 2028, using analyst consensus and independent models for projections. All forward-looking figures are based on this timeframe unless otherwise stated. According to analyst consensus, Moog is expected to achieve Revenue CAGR FY2025–FY2028 of +4.5% and EPS CAGR FY2025–FY2028 of +8.0%. These projections assume a stable macroeconomic environment and are aligned with Moog's fiscal year ending in September. For comparison, peers like Woodward are projected to see slightly higher growth due to their concentrated exposure to ramping commercial aircraft programs.
The primary growth drivers for Moog are tied to broad aerospace and defense trends. In its commercial aircraft segment, growth is directly linked to production rate increases by Boeing and Airbus, particularly for narrow-body jets where Moog supplies critical flight control systems. The defense segment's growth is driven by government budgets and funding for key platforms like the F-35 fighter jet and various missile and helicopter programs. The space and defense segment benefits from increased global investment in satellite constellations and launch vehicles. Finally, high-margin aftermarket sales, which involve providing spare parts and services for the lifetime of an aircraft, represent a crucial and growing source of recurring revenue across its business.
Compared to its peers, Moog is a solid but not standout performer. Parker-Hannifin possesses immense scale and diversification that Moog cannot match, while Curtiss-Wright has achieved superior profitability and a stronger foothold in sole-source defense contracts. Woodward is considered a more direct beneficiary of the commercial aerospace recovery. Moog's primary risk is its dependency on the execution of its OEM customers and the unpredictability of government contract timing, which can lead to lumpy revenue. The opportunity lies in winning significant content on next-generation aircraft and defense platforms, though it faces intense competition for these spots.
Over the near term, Moog's trajectory appears steady. For the next year (FY2026), Revenue growth is projected at +5.0% (consensus), driven by rising OEM build rates. The three-year outlook (through FY2029) anticipates EPS CAGR of +8.5% (model) as aftermarket sales increase. The most sensitive variable is commercial aircraft production; a 10% slowdown in planned build rates by Boeing and Airbus could reduce Moog's near-term revenue growth to ~3%. Our normal case assumes build rates rise as planned, defense spending remains stable, and supply chains operate smoothly. A bull case, with faster-than-expected production ramps, could push 1-year revenue growth to +7%. A bear case, involving major production delays or a defense budget cut, could see growth fall to +2-3%.
Looking out over the long term, Moog's growth prospects are moderate. Over the next five years (through FY2030), Revenue CAGR is modeled at +4.0%, reflecting a mature market. The ten-year outlook (through FY2035) projects an EPS CAGR of +6.5% (model), as the business mix shifts further towards higher-margin services. The key long-term sensitivity is Moog's ability to win content on future aircraft and defense systems. Failure to secure a position on a major next-generation platform could reduce its long-term revenue CAGR to ~2-3%. Our assumptions for the normal case include continued global air traffic growth, steady defense modernization, and Moog maintaining its current market share. A bull case would involve Moog leveraging its R&D to win a larger share of next-gen platforms, pushing revenue CAGR towards +6%. A bear case would see it lose share to more aggressive or larger competitors, resulting in stagnant growth.
As of November 4, 2025, Moog Inc. (Class B) presents a mixed but generally full valuation picture at its price of $205.00. A comprehensive analysis using several valuation methods suggests that while the company is a strong operator in the aerospace and defense sector, its current stock price reflects much of its positive outlook.
A triangulation of valuation methods points to a fair value range that the current price is at the upper end of, or slightly exceeding. The company's multiples are high compared to its own history, with an EV/EBITDA of 16.23x versus a 5-year average of 11.5x, and its trailing P/E ratio is over 30. Applying a reasonable multiple range to its EBITDA suggests a per-share value between $197 and $230, indicating the current price is within a fair range, but on the higher side. This multiples-based approach seems the most reliable given the stability of earnings in the defense sector.
The most concerning area for Moog's valuation is its cash flow. The trailing twelve months free cash flow (FCF) yield is an exceptionally low 0.59%, resulting in a Price-to-FCF ratio of over 168. This is more typical of a high-growth tech company than a mature industrial firm and suggests the stock is significantly overvalued on a cash-flow basis unless FCF grows dramatically and consistently. The dividend yield of 0.58% is also too low to provide significant valuation support.
In conclusion, a triangulation of these methods suggests a fair value range of approximately $180 - $215. The stock is currently trading near the upper bound of this estimated range, primarily supported by its earnings and sales multiples while being heavily challenged by its weak free cash flow metrics. Based on this, the company appears to be fairly valued with a slight tilt towards being overvalued, offering limited upside from the current price.
Warren Buffett would view Moog Inc. as a durable, understandable business with a legitimate competitive moat, a characteristic he prizes in the aerospace and defense industry. The company's critical components are designed into long-life platforms, creating high switching costs and a predictable, albeit slow-growing, stream of aftermarket revenue. However, Buffett would be immediately concerned by the company's mediocre profitability; its operating margin of around 10% and Return on Invested Capital (ROIC) of approximately 8% are significantly below those of higher-quality peers like Parker-Hannifin (21% margin, 14% ROIC). This low ROIC indicates that for every dollar reinvested back into the business, Moog generates only 8 cents of profit, which is not the mark of the wonderful, high-return compounding machine Buffett seeks. Management's use of cash is primarily focused on reinvesting in the business, which is less effective given these low returns, alongside modest dividends and buybacks. While the stock's valuation at a 15-18x forward P/E ratio is reasonable, the lack of exceptional economic characteristics would lead him to pass. For retail investors, the takeaway is that Moog is a solid company, but not a great one, and Buffett would likely prefer to own a superior business at a fair price. If forced to choose the best in the sector, Buffett would likely favor Curtiss-Wright (CW) for its fortress balance sheet and defense focus, and Parker-Hannifin (PH) for its scale and superior returns, viewing HEICO (HEI) as a wonderful business but at too high a price. Buffett would likely only become interested in Moog if its price fell significantly, creating a much larger margin of safety, or if management demonstrated a clear path to sustainably higher returns on capital.
Charlie Munger would view Moog as a respectable but ultimately second-tier business, characterized by a strong, durable moat but underwhelming financial returns. He would appreciate its critical role in long-term aerospace and defense programs, which creates high switching costs and predictable revenue streams. However, Moog's modest operating margins of around 10% and a return on invested capital (ROIC) of approximately 8%, which barely exceeds its cost of capital, would be a major concern, as it signals a company that is not a superior compounder of value. While its valuation, with a forward P/E ratio of 15-18x, is fairer than its higher-quality peers, Munger's philosophy prioritizes buying wonderful businesses at fair prices over fair businesses at wonderful prices. Therefore, he would likely avoid Moog, preferring to invest in competitors with superior profitability. Munger would likely suggest investors look at Curtiss-Wright (CW), HEICO (HEI), or Parker-Hannifin (PH), as their higher margins (all >16%) and ROIC (all >11%) demonstrate fundamentally better business models. A sustained improvement in Moog's ROIC into the low-to-mid teens would be required for him to reconsider his position.
Bill Ackman would likely view Moog Inc. as a company with a solid moat in a favorable industry but would be deterred by its subpar financial performance compared to peers. He would note that its operating margins of around 10% and return on invested capital near 8% fall significantly short of what he would consider a high-quality business, especially when competitors like Parker-Hannifin and Curtiss-Wright achieve much higher returns. While the large performance gap could suggest a potential activist thesis to unlock value, Ackman would likely pass on the investment without a clear, simple catalyst for a turnaround. The key takeaway for retail investors is that from Ackman's perspective, Moog is a classic case of a 'good but not great' business, and he would prefer to pay a fair price for a truly excellent company in the same sector.
Moog Inc. carves out its competitive space in the aerospace and defense industry as a premier designer and manufacturer of high-precision motion and fluid control systems. The company's reputation is built on decades of engineering excellence, making it a critical supplier for mission-critical applications like aircraft flight controls, missile steering systems, and satellite positioning. This technical specialization is Moog's primary advantage, creating sticky relationships with prime contractors like Boeing, Airbus, and Lockheed Martin. Once Moog's components are designed into a platform, they are incredibly difficult to replace due to stringent certification requirements and performance specifications, leading to a long and profitable aftermarket revenue stream that can last for decades.
However, when compared to the broader competitive landscape, Moog's position is that of a focused specialist rather than a dominant force. It faces competition from much larger, diversified industrial giants like Parker-Hannifin, which possess far greater scale, broader product portfolios, and superior financial resources. These larger players can often leverage their size to achieve better cost efficiencies and exert more significant influence over the supply chain. Moog's relatively smaller size can limit its ability to invest in R&D at the same scale as its larger peers or to pursue large-scale acquisitions that could accelerate growth.
Furthermore, Moog's business model contrasts with those of other successful component suppliers. For example, companies like TransDigm Group and HEICO have demonstrated a superior ability to generate exceptionally high margins and shareholder returns through different strategies. TransDigm focuses on acquiring proprietary, sole-source businesses and aggressively managing them for cash flow, while HEICO excels in the high-margin FAA-approved aftermarket parts business. Moog, by contrast, operates a more traditional, engineering-driven model that, while stable, has historically produced lower margins and returns on capital than these more financially-focused competitors.
Ultimately, Moog's competitive standing is a mixed bag. It is a highly respected and technologically proficient company with a solid moat in its specific niches. Its performance is reliable and closely tied to the long cycles of aircraft production and defense spending. However, it is neither the largest, the most profitable, nor the fastest-growing player in its field. For investors, this makes Moog a solid but potentially unexciting holding, best suited for those seeking stable exposure to the aerospace and defense sector rather than explosive growth.
Parker-Hannifin Corporation is a diversified industrial behemoth and a direct, formidable competitor to Moog in the motion and control technology space. With a market capitalization and revenue base that dwarf Moog's, Parker-Hannifin operates at a completely different scale, offering a much broader portfolio of products across aerospace, industrial, and mobile markets. While Moog is a specialist in high-performance, often bespoke systems, Parker-Hannifin is a market leader across a vast range of complementary technologies, including filtration, hydraulics, and pneumatics. This scale and diversification make it a more resilient and financially powerful entity compared to the more focused Moog.
Winner: Parker-Hannifin over Moog. In the Business & Moat comparison, Parker-Hannifin's sheer scale is its most significant advantage. Its brand is synonymous with industrial motion control globally (Ranked on Fortune 500), providing a broader reach than Moog's more specialized reputation. Both companies benefit from high switching costs, as their components are deeply integrated into certified aerospace platforms, but Parker-Hannifin's vast product catalog creates stickier, more extensive customer relationships. Parker's economies of scale ($19.1B TTM revenue vs. Moog's $3.3B) allow for superior purchasing power and manufacturing efficiency. Both face high regulatory barriers (FAA/EASA), but Parker's global footprint and resources provide an edge in navigating them. Parker-Hannifin is the clear winner due to its overwhelming advantages in scale and product breadth.
Winner: Parker-Hannifin over Moog. A financial statement analysis reveals Parker-Hannifin's superior profitability and efficiency. Parker consistently posts stronger margins, with a TTM operating margin around 21% compared to Moog's 10%. This is a critical difference, showing Parker's ability to convert revenue into profit more effectively. In terms of profitability, Parker's Return on Invested Capital (ROIC) of approximately 14% is significantly better than Moog's, which hovers around 8%, indicating more efficient use of capital. While both companies manage their balance sheets prudently, Parker's leverage is comparable (Net Debt/EBITDA of ~2.3x vs. Moog's ~2.5x) despite its aggressive acquisition history, including the major purchase of Meggitt. Parker's stronger free cash flow generation (over $2B TTM) also provides greater financial flexibility. Parker-Hannifin wins on nearly every financial metric, especially profitability.
Winner: Parker-Hannifin over Moog. Examining past performance, Parker-Hannifin has delivered more consistent and robust returns to shareholders. Over the past five years, Parker's total shareholder return (TSR) has significantly outpaced Moog's, driven by both stock appreciation and a steadily growing dividend. Parker's 5-year revenue CAGR has been around 5-6% (boosted by acquisitions), while Moog's has been closer to 2-3%. More importantly, Parker has successfully expanded its operating margins by several hundred basis points over the last five years through its 'Win Strategy', whereas Moog's margin improvement has been less pronounced. From a risk perspective, both stocks are subject to industrial cycles, but Parker's diversification has historically provided a slightly smoother earnings stream. For its superior growth, margin expansion, and shareholder returns, Parker-Hannifin is the winner.
Winner: Parker-Hannifin over Moog. Looking ahead, Parker-Hannifin appears better positioned for future growth. The company's growth drivers are more numerous, spanning secular trends like electrification, clean energy, and digitalization across a wide array of end markets. This diversification provides more avenues for growth compared to Moog's heavy reliance on the aerospace and defense sectors. Parker's management has a proven track record of successfully integrating large acquisitions (like Meggitt and LORD), which remains a key part of its growth strategy. Moog's growth is more program-dependent, tied to specific platforms like the F-35 or new commercial aircraft. While solid, this path offers less upside potential than Parker's multi-faceted growth strategy. Parker's broader exposure to high-growth secular trends gives it the edge.
Winner: Moog over Parker-Hannifin. In terms of fair value, Moog currently presents a more compelling case. Moog typically trades at a lower valuation multiple, with a forward P/E ratio around 15-18x, compared to Parker-Hannifin's 20-25x. Similarly, on an EV/EBITDA basis, Moog trades at a discount to Parker. While some of Parker's premium is justified by its higher margins, superior growth, and greater scale, the valuation gap appears wide enough to suggest Moog is the better value. An investor is paying significantly less for each dollar of Moog's earnings than for Parker's. For investors focused on valuation and seeking a lower entry point, Moog is the better value today.
Winner: Parker-Hannifin over Moog. While Moog offers better value, Parker-Hannifin is the superior company overall. Parker's key strengths are its immense scale, market leadership across numerous product lines, and exceptional profitability with operating margins (~21%) that are double those of Moog (~10%). Its robust free cash flow and disciplined acquisition strategy have created significant shareholder value. Moog's primary weakness is its lack of scale and lower profitability, which limits its financial flexibility. The main risk for Parker is the successful integration of large acquisitions, while Moog's risk is its concentration in cyclical aerospace and defense markets. Parker-Hannifin's financial strength and operational excellence make it the clear winner, despite its higher valuation.
Woodward, Inc. is one of Moog's closest competitors, as both companies are specialists in designing and manufacturing complex control systems for the aerospace and industrial markets. They are similar in revenue size and often compete directly for contracts on aircraft engines and airframes. Woodward's business is primarily focused on energy conversion and control solutions, with a strong position in fuel systems and engine controls, while Moog is a leader in flight control actuation and motion control. This makes them direct peers with slightly different areas of technical expertise, leading to a very relevant head-to-head comparison.
Winner: Woodward over Moog. In the Business & Moat comparison, both companies have strong, defensible positions. Their brands are highly respected within their engineering niches. Switching costs are extremely high for both, as their products are certified and designed for the life of a platform (often 30+ years). Their scale is comparable (both have TTM revenues around $3B), so neither has a major scale advantage. Both face significant regulatory barriers from bodies like the FAA. However, Woodward has a slightly stronger moat in the commercial engine control market through its joint venture with GE and its sole-source positions on leading engine platforms like the GE9X and LEAP. This incumbency on the industry's highest-volume platforms gives it a slight edge. Woodward wins by a narrow margin due to its powerful position in core commercial engine programs.
Winner: Moog over Woodward. The financial statement analysis presents a mixed picture, but Moog currently has a slight edge in stability. In terms of growth, Woodward has recently shown stronger revenue recovery post-pandemic, with TTM growth exceeding 15% versus Moog's more modest 5-7%. However, Woodward's operating margins (~12%) are only slightly better than Moog's (~10%) and have been more volatile in recent years. Moog has demonstrated more consistent profitability. On the balance sheet, Moog is more conservatively leveraged, with a Net Debt/EBITDA ratio of ~2.5x compared to Woodward's ~1.5x, giving Woodward an advantage here. However, Moog's historical consistency in generating free cash flow gives it a slight edge in overall financial health. Moog wins due to its greater financial stability and consistency.
Winner: Woodward over Moog. Reviewing past performance, Woodward has demonstrated superior growth, albeit with more volatility. Over the last three years, Woodward's revenue and earnings recovery has been much stronger as the commercial aerospace market rebounded. Its 3-year revenue CAGR is in the high single digits, while Moog's is in the low single digits. However, over a five-year period that includes the 737 MAX crisis and the pandemic (which hit Woodward hard), Moog has shown more resilience. In terms of shareholder returns, Woodward's stock has performed better over the last 1-3 years, reflecting its stronger recovery. Margin trends have favored Woodward recently as it restores profitability. Given its stronger recent growth trajectory and shareholder returns, Woodward is the winner for past performance.
Winner: Woodward over Moog. For future growth, Woodward appears to have a clearer and more powerful catalyst. Its strong position on the highest-volume narrow-body aircraft platforms (Airbus A320neo and Boeing 737 MAX) provides a direct path to growth as aircraft production rates increase. This creates a highly visible and durable growth runway for both original equipment sales and high-margin aftermarket services. Moog's growth is also tied to these trends but is spread across a more diverse set of platforms, some of which are older or have lower production rates. Analyst consensus generally projects slightly higher medium-term earnings growth for Woodward than for Moog. Woodward's concentrated exposure to the commercial aerospace recovery gives it the edge in growth outlook.
Winner: Moog over Woodward. From a fair value perspective, Moog is more attractively priced. Woodward's stronger growth prospects have earned it a premium valuation, with a forward P/E ratio often in the 25-30x range. Moog, with its more modest growth profile, trades at a more reasonable 15-18x forward P/E. This represents a significant valuation discount. While Woodward's growth is arguably higher quality, the premium an investor has to pay is substantial. For investors looking for a more reasonable entry point into the aerospace controls market, Moog offers a better risk/reward profile based on current multiples. Moog wins on valuation.
Winner: Woodward over Moog. In a very close matchup between two similar companies, Woodward emerges as the winner due to its superior growth profile. Woodward's key strength is its entrenched, often sole-source, position on the best-selling commercial aircraft engine programs, which provides a clear path to long-term growth. Its primary weakness has been its historical earnings volatility and sensitivity to commercial aerospace cycles. Moog's strength is its stability and diversification across defense, space, and industrial markets, but its weakness is a lower-growth profile. The key risk for Woodward is a slowdown in aircraft production, while for Moog it is pressure on defense budgets. Woodward's stronger growth outlook ultimately justifies its position as the slightly better investment, despite its higher valuation.
Curtiss-Wright Corporation is another strong competitor for Moog, operating with a similar revenue scale but a distinct focus on a 'strategic acquirer' model within the high-end aerospace, defense, and power generation markets. While Moog is known for its motion control and fluid systems, Curtiss-Wright specializes in a broader array of highly engineered products and services, including flight test instrumentation, tactical communications, and critical components for nuclear submarines. This strategic focus on acquiring niche technology leaders makes its business model different from Moog's more organic, engineering-led approach, leading to a compelling comparison in strategy and financial performance.
Winner: Curtiss-Wright over Moog. In the Business & Moat assessment, Curtiss-Wright has a slight edge due to its strategic positioning in defense markets. Both companies have strong brands and benefit from very high switching costs due to their products' integration into long-life defense platforms. Their scale is comparable, with both generating around $3B in annual revenue. However, Curtiss-Wright has intentionally positioned itself to be the sole-source provider on a wide range of critical U.S. defense programs, particularly in naval applications (e.g., Ford-class carriers, Virginia-class submarines). This creates an exceptionally strong and durable moat, arguably more insulated from cyclicality than Moog's commercial aerospace exposure. Curtiss-Wright wins due to its superior entrenchment in high-priority, long-term defense programs.
Winner: Curtiss-Wright over Moog. The financial statement analysis clearly favors Curtiss-Wright. The company consistently achieves higher profitability, with operating margins in the 16-17% range, significantly above Moog's ~10%. This demonstrates a more effective operational model and better cost control. Curtiss-Wright also maintains a stronger balance sheet, with a very low Net Debt/EBITDA ratio often below 1.0x, compared to Moog's ~2.5x. This conservative leverage provides immense financial flexibility for acquisitions and R&D investment. Furthermore, Curtiss-Wright's Return on Invested Capital (ROIC) of ~11-12% is superior to Moog's ~8%, indicating better capital allocation. For its higher margins, lower leverage, and superior returns on capital, Curtiss-Wright is the decisive winner.
Winner: Curtiss-Wright over Moog. Curtiss-Wright's past performance has also been more impressive. The company has a long track record of delivering consistent, high-single-digit revenue growth, driven by a combination of organic growth and disciplined acquisitions. Its 5-year revenue CAGR of ~4-5% has been more robust than Moog's. More importantly, Curtiss-Wright has successfully expanded its margins over the past five years, while Moog's have been relatively flat. This operational excellence has translated into superior shareholder returns; Curtiss-Wright's TSR has consistently outperformed Moog's over 3, 5, and 10-year periods. Its focus on defense has also resulted in lower earnings volatility compared to Moog. Curtiss-Wright wins on growth, margin expansion, and shareholder returns.
Winner: Curtiss-Wright over Moog. Looking to the future, Curtiss-Wright's growth prospects appear more reliable and less cyclical. The company's growth is underpinned by strong, bipartisan support for U.S. defense spending and the long-term nature of the naval and aerospace programs it supports. Management has provided clear guidance for continued margin expansion and revenue growth, supported by a healthy backlog (over $2.5B). Its strategy of acquiring small, technologically advanced companies in adjacent markets provides an additional, reliable avenue for growth. Moog's future is more tied to the commercial aerospace cycle and specific program wins, which can be less predictable. Curtiss-Wright's strong positioning in secularly growing defense markets gives it a clearer path forward.
Winner: Even. In the fair value comparison, both companies trade at similar, reasonable valuations. Curtiss-Wright's forward P/E ratio is typically in the 20-24x range, while Moog's is slightly lower at 15-18x. However, Curtiss-Wright's premium is fully justified by its superior margins, stronger balance sheet, and more consistent growth. On a quality-adjusted basis, its valuation seems fair. An investor in Curtiss-Wright is paying a small premium for a much higher-quality business. Conversely, an investor in Moog gets a lower multiple but also accepts lower profitability and growth. Given this trade-off, neither stock appears to be a clear bargain relative to the other, making this comparison a draw.
Winner: Curtiss-Wright over Moog. Curtiss-Wright is the clear winner in this comparison, representing a higher-quality business across nearly every dimension. Its primary strengths are its superior operating margins (~16% vs. Moog's ~10%), a fortress balance sheet with very low debt (Net Debt/EBITDA < 1.0x), and a strategic focus on sole-source defense contracts that provide a durable competitive moat. Moog's main weakness in comparison is its lower profitability and higher financial leverage. The key risk for Curtiss-Wright is a significant downturn in U.S. defense spending, while Moog's risks are more balanced between defense and the cyclical commercial aerospace market. Curtiss-Wright's consistent operational execution and stronger financial profile make it the superior choice.
HEICO Corporation operates a unique and highly successful business model within the aerospace industry, making it a fascinating, if indirect, competitor to Moog. HEICO focuses primarily on designing and manufacturing FAA-approved aftermarket replacement parts (PMA) and on providing niche electronic technologies. This contrasts sharply with Moog's model, which is centered on being the original equipment manufacturer (OEM) for proprietary control systems. While they don't often compete for the same initial contracts, HEICO's success in the high-margin aftermarket directly challenges the long-term revenue streams that OEM-focused companies like Moog rely on.
Winner: HEICO over Moog. When analyzing Business & Moat, HEICO's model is arguably stronger. HEICO's brand among airlines is built on cost savings and reliability, a powerful value proposition. Its primary moat is regulatory; it has mastered the complex FAA approval process to produce PMA parts, creating a significant barrier to entry for others. It also has a moat built on its vast library of approved parts (over 10,000 PMAs). While Moog has a strong moat through its OEM incumbency and intellectual property, HEICO's business is less capital-intensive and has proven to be more resilient. HEICO's decentralized, entrepreneurial culture also allows it to move faster than more traditional companies. For its unique regulatory moat and capital-light model, HEICO is the winner.
Winner: HEICO over Moog. A review of the financial statements reveals HEICO's overwhelming superiority. HEICO consistently generates industry-leading operating margins, often in the 22-24% range, more than double Moog's ~10%. This is the direct result of its focus on the high-margin aftermarket. HEICO's growth has also been spectacular, with a 10-year revenue CAGR of over 15%, driven by a blend of organic growth and a highly successful acquisition strategy. In terms of profitability, HEICO's ROIC is consistently above 15%, far superior to Moog's ~8%. HEICO also maintains a conservative balance sheet, with a Net Debt/EBITDA ratio typically around 2.0x, even with its active M&A. HEICO is the decisive winner on every important financial metric.
Winner: HEICO over Moog. HEICO's past performance has been exceptional and has created tremendous value for shareholders. Over the last 10 years, HEICO's total shareholder return has been one of the best in the entire industrial sector, vastly exceeding that of Moog and the broader market. This performance is a direct result of its consistent double-digit growth in revenue and earnings. Its margin profile has also been remarkably stable and high. While Moog has been a steady performer, it simply cannot match the growth algorithm that HEICO has perfected over decades. In terms of risk, HEICO's business has proven to be less cyclical than OEM-focused businesses during downturns, as maintenance and repairs are non-discretionary for airlines. HEICO wins by a landslide.
Winner: HEICO over Moog. HEICO's future growth prospects also appear brighter. The company's core driver is the continued growth of the global aircraft fleet, which expands the addressable market for its aftermarket parts each year. HEICO's strategy of making numerous small, strategic acquisitions of niche technology companies has a long runway for continued success. The company's management team has a stellar track record of capital allocation. Moog's growth, in contrast, is more dependent on securing wins on new, large-scale platforms, which is a lumpier and less predictable path. HEICO's decentralized model and proven M&A engine give it a more reliable and potentially faster path to future growth.
Winner: Moog over HEICO. The only category where Moog holds an advantage is fair value. HEICO's phenomenal success and growth prospects command a very high valuation premium. The stock frequently trades at a forward P/E ratio of 45-55x or even higher. In contrast, Moog's P/E is a much more modest 15-18x. An investor in HEICO is paying a steep price for quality and growth, which introduces valuation risk if its growth ever slows. Moog, while a lower-growth company, offers a much more attractive entry point and a higher margin of safety from a valuation perspective. For the value-conscious investor, Moog is the clear winner.
Winner: HEICO over Moog. Despite its high valuation, HEICO is unequivocally the superior business and a better long-term investment. HEICO's key strengths are its brilliant, capital-light business model focused on the high-margin aftermarket, its exceptional track record of profitable growth, and its industry-leading margins (~23% vs Moog's ~10%). Its primary risk is its lofty valuation, which leaves little room for error. Moog's strength is its solid engineering and stable OEM business, but its weakness is its mediocre growth and profitability in comparison. HEICO's model has proven to be a more effective engine for value creation, making it the clear winner.
TransDigm Group is a unique and powerful force in the aerospace components industry, representing a significant competitor to Moog, albeit with a radically different business model. TransDigm's strategy is to acquire and own proprietary, sole-source aerospace products with significant aftermarket content, and then manage these businesses with an intense focus on value creation, cost control, and cash generation. This private-equity-like approach contrasts with Moog's traditional, engineering-focused operational model. While both supply critical components, their philosophies on capital allocation and profitability could not be more different.
Winner: TransDigm over Moog. In evaluating their Business & Moat, TransDigm has engineered a nearly impenetrable fortress. Its entire strategy is built on acquiring companies that are the sole provider of a specific part (over 80% of sales from proprietary products). This creates a near-monopoly position for those components, giving it immense pricing power. Switching costs for its customers are astronomical. While Moog also has strong moats due to its OEM status, TransDigm's portfolio is explicitly curated for these characteristics. TransDigm's scale is also larger, with TTM revenue over $6.5B. Its brand among investors is legendary for value creation, though its reputation among customers (like the Department of Defense) is sometimes controversial due to its pricing strategies. TransDigm wins due to its unparalleled pricing power and sole-source positioning.
Winner: TransDigm over Moog. The financial statement comparison is a blowout victory for TransDigm. The company's profitability is in a league of its own, with TTM EBITDA margins consistently in the 45-50% range, a figure that is unheard of in manufacturing and dwarfs Moog's ~10% operating margin. This is a direct result of its business model. However, this performance comes with very high leverage; TransDigm's Net Debt/EBITDA ratio is often 5.0x or higher, compared to Moog's conservative ~2.5x. This is a core part of its strategy, using debt to finance acquisitions and amplify returns. Despite the high debt, its massive cash generation provides comfortable interest coverage. For its truly extraordinary profitability, TransDigm is the clear winner, though investors must accept its high-risk, high-leverage balance sheet.
Winner: TransDigm over Moog. TransDigm's past performance has created staggering wealth for its shareholders. Over any meaningful long-term period (5, 10, or 15 years), TransDigm's total shareholder return has been one of the best in the entire stock market, dramatically outpacing Moog's. This has been driven by a powerful combination of M&A-fueled growth and relentless margin expansion. The company's 10-year revenue CAGR has been in the double digits. Moog's performance, while respectable, looks pedestrian by comparison. TransDigm's business model has also proven resilient through various cycles, although its high leverage makes its stock volatile during market panics. For its phenomenal, long-term shareholder value creation, TransDigm is the undisputed winner.
Winner: TransDigm over Moog. TransDigm's future growth strategy remains robust. The company has a well-defined and repeatable process for acquiring businesses and integrating them into its value-creation machine. The aerospace components market remains fragmented, providing a long runway for future acquisitions. As the global aircraft fleet grows, so does the high-margin aftermarket revenue from its massive installed base of parts. Moog's future growth is more organic and tied to the pace of new aircraft programs. TransDigm's ability to manufacture its own growth through acquisitions gives it a significant edge and more control over its own destiny.
Winner: Moog over TransDigm. As with other high-quality competitors, the one area where Moog has an advantage is fair value and risk profile. TransDigm's incredible success has earned it a premium valuation, with a forward P/E ratio often in the 40-50x range. More importantly, its high leverage (Net Debt > $19B) represents a significant risk. If the aerospace market were to enter a deep and prolonged downturn, servicing that debt could become a serious issue. Moog, with its lower valuation (15-18x P/E) and much more conservative balance sheet, offers a significantly higher margin of safety. For a risk-averse investor, Moog is the more prudent choice.
Winner: TransDigm over Moog. Despite its high leverage and valuation, TransDigm's business model has proven to be one of the most effective value-creation engines in modern capitalism, making it the winner. TransDigm's key strengths are its portfolio of sole-source, proprietary products, its unmatched EBITDA margins (~50%), and a management team with a masterful track record of capital allocation. Its notable weakness and primary risk is its enormous debt load. Moog is a solid, well-run engineering company, but its financial performance and shareholder returns pale in comparison. TransDigm has fundamentally redefined what is possible in the aerospace components industry, and its performance speaks for itself.
Safran S.A. is a French multinational aerospace giant and a major global player, making it a formidable international competitor to Moog. Safran operates across three core segments: Aircraft Propulsion, Aircraft Equipment, Defense and Space, and Aircraft Interiors. While it is best known for its CFM International joint venture with GE, which produces the world's best-selling LEAP jet engines, its Aircraft Equipment segment competes directly with Moog in areas like landing gear, wiring, and power systems. Safran's massive scale, technological breadth, and global reach place it in a different league than the more specialized Moog.
Winner: Safran over Moog. In the Business & Moat comparison, Safran's advantages are clear. Its brand is a global aerospace benchmark, particularly in propulsion. Safran's most powerful moat is its 50% stake in the CFM LEAP engine program, the exclusive engine for the Boeing 737 MAX and an option on the Airbus A320neo. This position guarantees decades of high-margin aftermarket revenue from a fleet of thousands of aircraft (over 10,000 engine orders). While Moog has strong moats on individual platforms, nothing in its portfolio compares to the scale and dominance of Safran's engine business. Safran's revenue scale (over €22B TTM) also provides significant advantages. For its dominant position in the crucial aircraft propulsion market, Safran is the clear winner.
Winner: Safran over Moog. A financial statement analysis shows Safran to be a stronger financial performer. The company's operating margins, typically in the 13-15% range, are consistently higher than Moog's ~10%. Safran's revenue base is nearly seven times larger, providing greater stability and resources for investment. In terms of balance sheet, Safran maintains a very strong position, often holding a net cash position or very low leverage, which is far superior to Moog's Net Debt/EBITDA ratio of ~2.5x. Safran's profitability, as measured by ROIC, is also typically higher than Moog's. Its massive scale and leading market positions translate directly into superior financial results. Safran wins on profitability, scale, and balance sheet strength.
Winner: Safran over Moog. Looking at past performance, Safran has a strong track record of growth and shareholder returns, particularly driven by the success of the LEAP engine program. Its revenue growth has outpaced Moog's, and its stock performance over the last five years has been stronger, reflecting the powerful tailwind of the commercial aerospace upcycle. Safran's management has also done an excellent job of expanding margins and integrating large acquisitions, such as Zodiac Aerospace. Moog's performance has been steady but has lacked the dynamic growth catalyst that Safran possesses in its propulsion business. Safran is the winner based on its superior growth and returns.
Winner: Safran over Moog. Safran's future growth prospects are exceptionally bright and visible. The primary driver is the massive backlog for CFM LEAP engines, which provides a clear production roadmap for years to come. The real value, however, is in the long-term service agreements and spare parts sales that will follow as this massive fleet of engines matures. This creates a multi-decade annuity stream of high-margin revenue. The company is also a leader in developing more sustainable aviation technologies, positioning it well for the future. Moog's growth path is solid but lacks a single, powerful driver of this magnitude. Safran's outlook is simply more compelling.
Winner: Moog over Safran. In the fair value assessment, Moog may offer a better entry point for U.S.-based investors. Safran, as a premier European industrial company, often trades at a higher P/E multiple than Moog, typically in the 20-25x range. Moog's P/E of 15-18x is more modest. Furthermore, investing in Safran involves currency risk (Euro vs. Dollar) and potentially different accounting standards and tax implications for a U.S. investor. Moog offers a 'purer' and more simply valued play on the U.S. aerospace and defense industry. For its lower valuation and simplicity for domestic investors, Moog wins on value.
Winner: Safran S.A. over Moog Inc. Safran is the superior company and a better investment choice, representing a global leader in the most attractive segments of the aerospace industry. Its key strengths are its dominant position in the commercial jet engine market, its massive scale, its strong balance sheet, and its highly visible, long-term growth profile. Its primary risk is its heavy exposure to the cyclical commercial aviation market. Moog is a high-quality niche player, but it cannot compete with Safran's scale or the power of its engine franchise. Safran's strategic positioning makes it one of the most attractive long-term investments in the entire aerospace sector.
Based on industry classification and performance score:
Moog Inc. operates a solid business by designing critical, high-performance control systems for major aerospace and defense platforms. Its primary strength is its entrenched position on long-life programs like the F-35 and Boeing 787, creating high switching costs and a stable revenue stream. However, Moog's key weakness is its lack of scale and significantly lower profitability compared to top-tier competitors such as Parker-Hannifin or Curtiss-Wright. For investors, the takeaway is mixed: Moog is a durable, high-quality engineering firm, but its financial performance and growth prospects are modest compared to the industry's best operators.
Moog maintains a healthy backlog that provides solid near-term revenue visibility, reflecting stable demand for its core programs.
In the aerospace and defense industry, the order backlog is a key indicator of future health. Moog recently reported a total backlog of approximately $2.3 billion. With annual revenue around $3.3 billion, this gives the company a backlog-to-revenue ratio of 0.7x, which translates to roughly eight to nine months of guaranteed future sales. This level of visibility is a clear strength, providing a buffer against short-term economic fluctuations. A book-to-bill ratio (new orders divided by sales) above 1.0 indicates that the backlog is growing, which is a positive sign of demand. While Moog's backlog coverage is solid and fundamentally sound, it is not as robust as some peers who may carry well over a year's worth of revenue in their backlog. Nonetheless, the size of the backlog confirms Moog's entrenched position on key, ongoing programs and provides good predictability for investors.
Moog's gross margins are commendably stable but are structurally lower than elite competitors, indicating only average pricing power and cost control.
Moog has demonstrated an ability to maintain stable gross margins, which have consistently remained in the 25% to 27% range. This stability is positive, as it suggests the company has effective long-term contracts that allow it to pass on some, but not all, inflationary pressures on labor and raw materials. However, the absolute level of this margin is a significant weakness when compared to peers in the advanced components space. For instance, a high-quality competitor like Curtiss-Wright achieves gross margins above 35%, while Parker-Hannifin's are closer to 30%. The ~10 percentage point gap between Moog and a company like Curtiss-Wright is substantial and points to a structural disadvantage in pricing power or operational efficiency. While stable, Moog's profitability is simply not in the same league as the industry's best.
Moog's strength lies in its diversified, sole-source positions on critical, long-duration military and commercial platforms, which is the foundation of its business moat.
This factor is Moog's strongest attribute. The company is a critical supplier to some of the most important aerospace and defense programs in the world. In defense, it provides the flight control actuation systems for the F-35 fighter jet, a program expected to run for decades. In commercial aviation, it has significant content on premier widebody aircraft like the Boeing 787 and the Airbus A350. Its diversification is key; it is not reliant on a single aircraft program. By providing high-value, flight-critical systems, Moog's 'content per airframe' is significant. Being designed-in as the original equipment manufacturer ensures a long and predictable revenue stream from both initial production and decades of aftermarket support. This deep entrenchment across a portfolio of vital programs creates a durable competitive advantage that is difficult for any competitor to challenge.
Moog has a stable aftermarket business from its installed base, but its overall profitability suggests it lacks the dominant pricing power of aftermarket-focused peers.
Moog's business model relies on aftermarket sales (spares, services, and repairs) for long-term profitability, as these sales carry higher margins than selling original equipment. While the company doesn't explicitly disclose its aftermarket revenue percentage, its overall margin profile provides clues to its pricing power. Moog's operating margin consistently hovers around 10%, which is significantly below the sub-industry's top performers. For example, competitors like HEICO and TransDigm, who are masters of the aftermarket, generate operating margins of 22-24% and EBITDA margins near 50%, respectively. This massive gap indicates that while Moog benefits from being a sole-source supplier, it does not leverage this position into the kind of elite pricing power that defines a truly wide-moat business in this sector. Its aftermarket stream provides stability, but not the exceptional profitability seen in best-in-class competitors.
While Moog is diversified across different end-markets, it has a high concentration of revenue from a few key government and prime contractor customers, creating dependence risk.
Moog's revenue is split across Aircraft Controls (~43%), Space and Defense Controls (~37%), and Industrial Systems (~20%), providing a good balance between cyclical commercial markets and more stable government-funded programs. However, within these segments, customer concentration is high. The U.S. Government is its single largest end customer, and a substantial portion of sales is made to a handful of prime contractors like Boeing, Airbus, and Lockheed Martin. This is typical for the industry but represents a risk; a delay or cancellation of a major program by one of these key customers could materially impact Moog's financial results. In contrast, a highly diversified competitor like Parker-Hannifin serves thousands of customers across dozens of end-markets, making it far less vulnerable to any single customer. Moog's reliance on a few powerful buyers limits its bargaining power and creates a meaningful risk for investors.
Moog Inc. shows a mixed financial picture. The company is delivering solid revenue growth, with sales up 7.36% in the most recent quarter, and maintains stable operating margins around 10.6%. However, significant weaknesses exist in its cash generation, which was very weak for the last fiscal year and the second quarter, raising concerns about its ability to convert profits into cash. Additionally, total debt has increased to $1.28B, pushing leverage higher. For investors, the takeaway is mixed; while top-line growth is positive, the underlying financial health shows signs of stress, particularly regarding cash flow and a weakening balance sheet.
Leverage is increasing to moderately high levels as debt grows, which could constrain financial flexibility even though the company can still comfortably cover its interest payments.
Moog's balance sheet is becoming more leveraged. Total debt has risen steadily from $1.05 billion at the end of fiscal 2024 to $1.28 billion in the latest quarter. Consequently, the company's debt-to-EBITDA ratio (a key measure of leverage) has increased from 2.09x to 2.5x in the same period. While a 2.5x ratio is not uncommon in the industry, the upward trend is a negative signal. The debt-to-equity ratio has also crept up from 0.56 to 0.66.
On a positive note, Moog appears to have no issue servicing its debt. In the most recent quarter, its operating income ($103.16 million) covered its interest expense ($17.79 million) by a healthy 5.8 times. The company's current ratio of 2.43 also suggests it has more than enough short-term assets to cover its short-term liabilities. However, the consistent rise in total debt is a significant concern that outweighs the adequate coverage ratios, as it reduces the company's ability to handle unexpected industry downturns or fund future growth without further borrowing.
The company's ability to turn profit into cash is inconsistent and has been very weak over the last year, despite a strong rebound in the most recent quarter.
Moog's cash flow performance is a significant concern. For the full fiscal year 2024, the company generated just $46.33 million in free cash flow (FCF) on over $3.6 billion in revenue, resulting in a very low FCF margin of 1.28%. This poor performance continued into the second quarter of 2025, where FCF was a mere $1.82 million. While the most recent quarter saw a significant improvement with FCF of $92.67 million, this volatility makes it difficult to rely on consistent cash generation.
The weakness stems from poor working capital management. The cash flow statement shows that changes in inventory (-$127 million) and receivables were major drains on cash in the last fiscal year. High inventory levels ($924.7 million) and receivables ($1.27 billion) on the balance sheet tie up significant cash, which is a common challenge in the long-cycle aerospace industry but appears particularly acute here. This inconsistent and often poor cash conversion is a critical weakness.
Moog's returns on its investments are mediocre and are not keeping pace with its capital spending, suggesting that new investments are not generating sufficient value.
The company's returns on investment are underwhelming. Its Return on Equity (ROE) is currently 12.64%, while its Return on Capital (a measure of how efficiently it uses all its capital) is lower at 8.05%. These returns are modest and generally below what investors would expect from a company in a high-tech, specialized industry. For context, a return on capital below 10% is often seen as weak, potentially not even covering the company's cost of capital.
This is further evidenced by a low Asset Turnover ratio of 0.89, which means Moog generates only $0.89 in sales for every dollar of assets it holds. The company continues to invest heavily in its business, with capital expenditures (capex) totaling $156 million in the last fiscal year. Given the low returns, it is questionable whether this capital is being deployed into high-value projects. This indicates a weakness in capital discipline and an inability to generate strong profits from its large asset base.
The company is posting solid and accelerating revenue growth, which is a key strength, although a lack of disclosure about its revenue sources makes it difficult to assess the quality of this growth.
Moog's top-line performance is a bright spot. Revenue growth accelerated to 7.36% in the most recent quarter, a significant improvement from the flat 0.49% growth in the prior quarter. For the full fiscal year 2024, the company grew revenue by a strong 8.74%. This demonstrates healthy demand for its products. Further supporting this outlook is a substantial order backlog of $2.65 billion, which provides some visibility into future sales.
However, the company does not provide a breakdown of its revenue mix between original equipment and higher-margin aftermarket sales, nor between the more cyclical commercial aerospace market and the stable defense market. This information is critical for investors to understand the sustainability and profitability of the revenue stream. While the headline growth number is strong, the absence of this detail is a notable transparency issue. Nevertheless, the robust growth itself is a clear positive for the company's financial profile.
The company demonstrates strong discipline in maintaining stable and predictable margins, although it has not yet shown an ability to expand them as revenue grows.
Moog's profitability margins are a point of stability. The company's gross margin has been remarkably consistent, hovering around 27.4% in the last two quarters and 27.6% for the last fiscal year. This indicates effective management of production costs. Similarly, the operating margin has been steady, registering 10.62% in the most recent quarter, 10.32% in the prior quarter, and 10.43% for the full year. This level of margin is generally considered average for the advanced components and materials sub-industry.
However, despite revenue growing by 7.36% in the latest quarter, operating margins have not expanded, suggesting that operating expenses are growing at the same pace as sales. This lack of operating leverage means that the benefits of higher sales are not flowing down to improve the profit margin. While the stability is a clear strength, the inability to improve profitability on higher volumes prevents a stronger assessment. Overall, maintaining steady margins in a complex supply chain environment is a solid achievement.
Moog's past performance shows a mixed record defined by steady growth but held back by inconsistent profitability and volatile cash flow. Over the last five fiscal years, revenue grew from $2.9 billion to $3.6 billion, and EPS recovered strongly. However, operating margins have struggled to break past 10%, and free cash flow has been unpredictable, even turning negative in FY2023. Compared to peers like Parker-Hannifin and Curtiss-Wright, Moog's inability to expand margins and generate reliable cash is a significant weakness. For investors, this creates a mixed takeaway: the company is growing, but its financial efficiency and shareholder returns have historically lagged behind top-tier competitors.
Moog's total shareholder return has been underwhelming and has generally lagged stronger competitors, reflecting the company's operational weaknesses.
An investment in Moog has produced lackluster returns compared to its peers. Competitor analysis consistently shows that companies like Parker-Hannifin, Curtiss-Wright, and HEICO have delivered significantly higher total shareholder returns (TSR) over 3- and 5-year periods. Moog's stock performance reflects its fundamental challenges: investors have not been willing to pay a premium for a company with stagnant margins and volatile cash flow, despite its revenue growth. The stock's beta of 1.08 indicates it has slightly higher-than-average market risk, without the superior returns to compensate for it. Ultimately, the stock's historical performance has not adequately rewarded investors relative to other opportunities in the sector.
The company's free cash flow generation is a significant weakness, characterized by extreme volatility and a negative result in fiscal 2023.
Moog's track record in generating free cash flow (FCF) over the last five years is poor. The annual FCF figures have been highly unpredictable, reading $190.9M, $164.5M, $107.4M, -$37.4M, and $46.3M from FY2020 to FY2024. The negative result in FY2023 is a major red flag, caused primarily by a $130 million increase in inventory, which points to challenges in managing working capital. The company's FCF margin, which measures how much cash is generated for every dollar of sales, is also very weak, coming in at just 1.28% in FY2024. This inconsistency and low conversion of profit into cash limits financial flexibility and is a key reason the company's performance has lagged more efficient peers.
Moog's operating margins have been stagnant for years, remaining in a low range that is significantly below key aerospace and defense competitors.
Despite growing revenues, Moog has failed to achieve meaningful margin expansion over the last five years. Its operating margin has hovered in a tight range, moving from 8.14% in FY2020 to 10.43% in FY2024. While the upward trend is a minor positive, the absolute level of profitability is a major weakness. Direct competitors like Curtiss-Wright consistently post operating margins in the 16-17% range, while industrial giants like Parker-Hannifin achieve margins above 20%. This persistent gap suggests Moog either lacks pricing power, has a less favorable mix of aftermarket business, or suffers from operational inefficiencies. This inability to improve profitability, even as revenue grows, is a critical flaw in its historical performance.
The company has achieved consistent revenue growth and a strong recovery in earnings per share since FY2020, demonstrating resilient demand for its products.
A clear strength in Moog's past performance is its ability to grow. Revenue has increased steadily from $2.885 billion in FY2020 to $3.609 billion in FY2024, a compound annual growth rate (CAGR) of approximately 5.7%. This shows healthy and durable demand across its end markets. Earnings per share (EPS) have also shown a very strong recovery, growing from an unusually low $0.28 in FY2020 to a solid $6.48 in FY2024. Even measuring from the more normal FY2021 EPS of $4.90, the earnings growth has been healthy. This track record of steady top-line expansion and bottom-line recovery indicates solid program execution and market positioning.
Moog prioritizes a safe, modestly growing dividend, but its inconsistent free cash flow has limited more impactful capital returns like significant share buybacks.
Over the past five years, Moog's capital allocation has been conservative and predictable. The company has reliably paid and grown its dividend, increasing the annual per-share payout from $0.75 in FY2020 to $1.11 in FY2024. With a low payout ratio of just 17% of earnings, this dividend is very secure. However, its approach to share buybacks has been less consistent. While it spent $239 million on repurchases in FY2020, subsequent annual amounts have been much smaller, generally between $40 million and $60 million. This level of spending has been insufficient to meaningfully reduce the share count, largely just offsetting dilution from employee stock plans. This strategy contrasts with peers who use M&A or aggressive buybacks to drive per-share value growth. Moog's volatile cash flow is the primary constraint, preventing a more ambitious capital allocation policy.
Moog's future growth outlook appears modest and steady, but it lacks the powerful catalysts of its top competitors. The company is well-positioned to benefit from the ongoing recovery in commercial aerospace and consistent defense spending. However, its growth is tied to the pace of existing programs rather than game-changing new wins or superior market positioning. Compared to peers like Woodward, which has more direct exposure to the high-volume aircraft ramp-up, or Curtiss-Wright, with its stronger margin profile, Moog's path appears less dynamic. The investor takeaway is mixed; Moog is a stable company but is unlikely to deliver market-leading growth in the coming years.
The company's capital expenditures are focused on maintenance and incremental improvements rather than significant capacity expansion or automation, limiting its potential for margin expansion and volume growth.
Moog's investment in its manufacturing capabilities appears conservative. Its capital expenditures (Capex) as a percentage of sales typically range from 2.5% to 3.5%. This level is sufficient for maintaining existing facilities and making necessary upgrades but is not indicative of a major strategic push to expand capacity or aggressively automate production. In contrast, larger competitors like Parker-Hannifin invest significantly more in absolute terms and have company-wide initiatives to drive productivity through automation. While Moog focuses on lean manufacturing principles, its moderate Capex level suggests it is not positioning itself to handle a dramatic surge in volume or to achieve a step-change in efficiency. This conservative approach limits operational leverage and could become a bottleneck if demand from key programs accelerates faster than expected. Without significant investment in future capacity, its growth is inherently capped.
While Moog benefits from rising aircraft production rates, its diversified business model means it has less concentrated exposure to this key growth driver than more specialized peers.
The post-pandemic recovery in air travel is driving aircraft manufacturers like Boeing and Airbus to ramp up production, a significant tailwind for their suppliers. Moog, which provides flight control systems for platforms like the 787 and A350, is a clear beneficiary of this trend. However, its growth is diluted because its revenue is spread across commercial, defense, and industrial segments. Competitors like Woodward have a much higher concentration of their business tied directly to the highest-volume narrow-body programs (737 MAX and A320neo), making them a more direct play on this specific growth story. Moog's diversification reduces risk but also mutes the potential upside from the commercial aerospace boom. Because its exposure is not superior to its key competitors, it fails to distinguish itself as a top growth candidate from this trend.
Moog secures a steady stream of business on existing and upgraded platforms but lacks the transformative, large-scale program wins that would significantly accelerate its long-term growth trajectory.
Moog's business model relies on winning content on long-life aerospace and defense platforms. The company regularly announces contract awards, but these are often for sustaining its position on existing programs or securing roles on smaller, niche platforms. For example, it provides critical components for the F-35 fighter jet and V-22 Osprey. However, it faces intense competition for spots on the next generation of aircraft and defense systems from larger, better-capitalized peers. Competitors like Safran and Woodward have secured powerhouse positions on the best-selling commercial engines (CFM LEAP), guaranteeing decades of revenue. Moog lacks a win of this magnitude in its recent portfolio. Without securing a critical, sole-source role on a future high-volume platform, Moog's growth will remain incremental rather than exponential, justifying a failing grade in this category.
Moog maintains a healthy and growing backlog, with a solid book-to-bill ratio that suggests stable near-term revenue visibility.
Moog's backlog, which represents future orders to be fulfilled, provides a good indicator of its revenue pipeline. As of its latest reporting, the company's total backlog stood at approximately $2.4 billion, an increase from the prior year. This growth signals sustained demand for its products. The book-to-bill ratio, which compares orders received to units shipped and billed, has been consistently around or slightly above 1.0x. A ratio above 1.0x means a company is receiving more orders than it is filling, causing the backlog to grow and indicating future revenue growth. Moog's backlog-to-revenue ratio of around 0.7x is reasonable, though competitors like Curtiss-Wright sometimes exhibit stronger backlog coverage. While Moog's metrics are solid and don't indicate any weakness, they don't show the explosive growth needed to significantly outperform. Still, the stability and visibility provided by the growing backlog are a clear positive.
Moog's R&D spending is adequate to maintain its technological edge in niche areas, but it is outspent by larger rivals, putting it at a long-term disadvantage in developing breakthrough technologies.
As an engineering-focused company, Moog consistently invests in research and development (R&D) to stay relevant. Its R&D spending as a percentage of sales is typically in the 5-6% range, which is respectable for its size. This investment is crucial for developing next-generation motion control systems and competing for new programs. However, Moog's absolute R&D budget is a fraction of that of giants like Parker-Hannifin and Safran. This scale difference is a significant disadvantage. Larger competitors can fund more ambitious, higher-risk projects in areas like electrification and sustainable aviation, which are likely to define the future of the industry. Moog's R&D is sufficient to defend its current position, but it lacks the firepower to consistently out-innovate its larger rivals and capture a leading share of future technology platforms.
As of November 4, 2025, with Moog Inc. (Class B) trading at $205.00 per share, the stock appears to be fairly valued to slightly overvalued. This assessment is based on its earnings multiples, which are elevated compared to historical averages, and very weak free cash flow yields, suggesting the market has priced in significant future growth. While forward earnings estimates suggest improvement, the stock's low free cash flow yield raises concerns about its current price justification. The stock is trading near the top of its 52-week range, indicating potentially limited near-term upside. The overall investor takeaway is neutral, leaning towards caution, as the current valuation seems to leave little room for error.
A dividend yield of only 0.58% and a modest buyback yield offer a minimal income return to investors, providing little support to the overall valuation.
Moog offers a very low income return to its shareholders. The dividend yield is a mere 0.58%, which is insufficient to attract income-focused investors or provide a significant cushion against price declines. The dividend payout ratio is a healthy and sustainable 17.51%, meaning the company has plenty of room to increase its dividend, but has chosen not to. The buyback yield is also modest at 0.44%. The combined shareholder yield (dividend + buyback) is just over 1%. In a mature industry, a higher return of capital to shareholders is often expected unless the company is reinvesting capital at very high rates of return, which is not clearly evident from its recent performance.
The company's extremely high EV/FCF ratio and correspondingly low free cash flow yield indicate a significant valuation concern, suggesting the stock price is not supported by near-term cash generation.
Moog's valuation based on cash flow is weak. Its enterprise value to free cash flow (EV/FCF) ratio stands at a very high 199.72, and its Price to FCF (P/FCF) ratio is 168.37. This is reflected in a TTM free cash flow yield of just 0.59%. For an industrial company in the aerospace and defense sector, this yield is exceptionally low and signals that the market price is far outpacing the actual cash being generated for shareholders. While the EV/EBITDA multiple of 16.23 is closer to industry norms, the disconnect with FCF is a red flag. A healthy FCF yield provides a cushion for investors and indicates a company can fund operations, dividends, and buybacks without stress. Moog’s low figure fails to provide this assurance.
Current valuation multiples like EV/EBITDA are trading at the peak of their 5-year range and above the historical industry median, indicating the stock is expensive relative to its own past and peer benchmarks.
When compared to its own history, Moog's valuation appears stretched. The current EV/EBITDA multiple of 16.23 is at the peak of its five-year range, which saw a low of 9.3x and averaged 11.5x. This indicates the stock is trading at a significant premium to its typical valuation. Compared to peers, the picture is similar. The aerospace and defense sector has seen median M&A transaction multiples around 13.4x EBITDA in recent years, with public companies trading in a similar range. Moog’s current multiple is clearly on the high side of this industry benchmark. This suggests that from a relative valuation perspective, Moog is currently expensive.
The stock's trailing P/E ratio of over 30 is high for its industry and historical levels, suggesting the market has already priced in future earnings growth.
Moog Inc. currently trades at a trailing twelve months (TTM) P/E ratio of 30.88, which is elevated for the aerospace and defense components sub-industry. While the forward P/E ratio of 22.43 indicates that analysts expect earnings to grow, this multiple is still not decisively cheap. A P/E ratio this high suggests that investors are paying a premium for each dollar of current earnings, implying high expectations for future performance. The broader Aerospace & Defense industry has a wide range of P/E ratios, but mature component suppliers typically trade at lower multiples. Given that Moog's valuation is significantly above its historical averages, this factor points to the stock being fully valued to overvalued on an earnings basis.
The company's Price-to-Sales and Price-to-Book ratios are within reasonable limits for its industry, providing a degree of valuation support based on assets and revenue.
Moog's valuation on the basis of sales and book value appears more reasonable. The Price/Book (P/B) ratio is 3.36, which is not excessively high for a company with valuable intangible assets and a solid market position. The industry median P/B ratio is around 2.7, making Moog slightly premium but not an outlier. More importantly, the EV/Sales ratio is 2.08, which aligns well with the broader U.S. Aerospace & Defense industry average Price-to-Sales ratio which has been around 2.2x to 2.7x. With recent revenue growth of 7.36% and an operating margin of 10.62%, these multiples seem justified and provide a floor for the valuation.
Moog faces significant risks from its two primary markets, which are often influenced by forces outside its control. A large portion of its revenue depends on government defense budgets, especially from the U.S. While current geopolitical tensions support robust spending, this funding is not guaranteed and can be subject to political shifts, budget stalemates, or program cancellations, creating revenue uncertainty. On the commercial side, the business is directly linked to the health of the global economy. A future recession could quickly curb consumer and business travel, leading airlines to delay or cancel new aircraft orders from giants like Boeing and Airbus, who are Moog's key customers. Persistent supply chain disruptions also remain a threat, potentially delaying production and increasing costs.
The advanced components industry is highly competitive, forcing Moog to constantly innovate to maintain its position. The company's success hinges on winning long-term contracts for major aircraft and defense platforms. Losing a bid on a next-generation fighter jet or commercial airliner could mean missing out on decades of predictable revenue. Furthermore, many of its government contracts are fixed-price, which shifts the risk of cost overruns onto Moog. In an environment of stubborn inflation and volatile material costs, unexpected expenses in labor or raw materials can severely squeeze or eliminate profit margins on these crucial projects, posing a direct threat to profitability.
A key company-specific vulnerability is Moog's balance sheet. The company carries a significant amount of debt, which is common for capital-intensive manufacturers but presents a risk in the current macroeconomic climate. With interest rates higher than they have been in over a decade, the cost of servicing and refinancing this debt increases, consuming cash that could otherwise be used for research and development, capital expenditures, or strategic acquisitions. This financial leverage could constrain Moog's flexibility, making it more difficult to navigate an economic downturn or invest aggressively to outpace competitors, potentially limiting long-term growth prospects.
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