This November 4, 2025, report provides a comprehensive evaluation of Moog Inc. (Class A) (MOG.A), examining its Business & Moat, Financial Statements, Past Performance, Future Growth, and Fair Value. The analysis benchmarks MOG.A against key industry competitors like Parker-Hannifin Corporation (PH), TransDigm Group Incorporated (TDG), and Woodward, Inc. (WWD), framing all takeaways through the investment principles of Warren Buffett and Charlie Munger.
Moog Inc. presents a mixed investment outlook. The company is a critical supplier of advanced motion control systems for the aerospace and defense industry. It demonstrates solid revenue growth and maintains stable profitability margins. However, this is challenged by a significant debt load and highly inconsistent cash flow. Compared to its peers, Moog consistently underperforms on key profitability metrics. Still, its locked-in positions on long-term programs like the F-35 fighter jet provide a durable advantage. Given its fair valuation, the stock is best suited for long-term investors seeking stability rather than high growth.
US: NYSE
Moog Inc. operates as a designer, manufacturer, and integrator of precision motion and fluid control systems for aerospace, defense, and industrial applications. The company's business model is built on providing highly engineered, mission-critical components that are essential to the performance of its customers' products. Revenue is generated across three primary segments: Aircraft Controls (commercial and military), Space and Defense Controls (satellites, vehicles, missiles), and Industrial Systems (factory automation, medical equipment). Its customers are among the largest and most stable in the world, including OEMs like Boeing and Airbus, defense prime contractors such as Lockheed Martin, and various government agencies.
Moog generates revenue through two main streams: original equipment manufacturing (OEM) and aftermarket services. OEM revenue comes from long-term contracts to supply components for new aircraft, satellites, or machinery, which provides a baseline of predictable income. Aftermarket revenue, which includes spare parts and repair services, offers higher margins and greater stability over the life of a platform. Key cost drivers include significant investment in research and development (R&D) to maintain a technological edge, the high cost of skilled engineering talent, and the procurement of specialized raw materials. Moog functions as a critical Tier-1 supplier, deeply embedded in its customers' supply chains, making its products integral from the design phase through decades of service life.
The company's competitive moat is strong and primarily derived from immense switching costs and intangible assets. Once a Moog control system is designed into an aircraft or missile, it is nearly impossible to replace due to the prohibitive costs of redesign, testing, and recertification by bodies like the FAA. This creates a sticky customer base and a long tail of aftermarket revenue. This is reinforced by Moog's reputation for engineering excellence and its status as a sole-source supplier for critical systems, such as the flight control system on the F-35 platform. These long-cycle, technology-driven relationships form a formidable barrier to entry for potential competitors.
Despite these strengths, Moog's primary vulnerability is its financial performance relative to the industry's best. While its business model ensures stability and resilience, it has not generated the high margins or rapid growth of peers like Parker-Hannifin, TransDigm, or HEICO. The company's reliance on OEM programs, which are typically lower-margin than aftermarket-focused businesses, caps its overall profitability. Moog's competitive edge is durable and its business is built to last, but investors should recognize that it is engineered for stability rather than for the dynamic financial returns achieved by more aggressive or larger-scale competitors in the sector.
Moog's recent financial performance reveals a company with a healthy income statement but some notable risks on its balance sheet and cash flow statement. Revenue growth has been strong, accelerating to 7.36% in the most recent quarter, which is a positive sign of demand for its advanced components. Profitability has remained commendably stable, with operating margins consistently holding above 10%. This suggests good operational discipline and an ability to manage costs effectively, which is crucial in the capital-intensive aerospace and defense industry.
However, the balance sheet presents a more cautious story. The company's total debt stood at $1.28 billion in the latest quarter. While its debt-to-equity ratio of 0.66 is not alarming, the sheer size of the debt requires careful monitoring. This leverage is manageable for now, as profits are sufficient to cover interest payments comfortably. Liquidity also appears adequate, with a current ratio of 2.43, indicating Moog has more than enough short-term assets to cover its immediate liabilities.
The most significant area of concern is cash generation. Free cash flow, which is the cash left over after funding operations and capital expenditures, has been highly volatile. After generating a meager $1.82 million in the second quarter of 2025, it rebounded to a strong $92.67 million in the third quarter. This inconsistency, coupled with a very low free cash flow margin of 1.28% for the last full fiscal year, suggests challenges in managing working capital, such as growing inventory and receivables. For investors, this means the company's reported profits don't always translate into readily available cash.
In conclusion, Moog's financial foundation is stable but not without weaknesses. The steady profits and growing revenue are clear strengths. However, the high leverage and, more importantly, the unpredictable cash flow generation, are risks that investors must consider. The company's financial health depends on its ability to improve its cash conversion efficiency to support its debt and fund future growth.
Analyzing Moog's performance over the last five fiscal years, from FY2020 to FY2024, reveals a company with a resilient top line but challenges in profitability and cash generation. Revenue has grown at a compound annual growth rate (CAGR) of approximately 5.8%, from $2.885 billion to $3.609 billion. This indicates stable demand for its advanced components. Earnings per share (EPS) have also grown, from a depressed $0.28 in FY2020 to $6.48 in FY2024. Excluding the anomalous 2020, the EPS CAGR from FY2021 to FY2024 is a more representative 9.7%. While this growth is positive, it has not been sufficient to outperform key competitors.
A closer look at profitability shows a key weakness. Moog's operating margin has gradually improved from 8.14% in FY2020 to 10.43% in FY2024, but it remains structurally lower than its peers. Competitors like Woodward, Curtiss-Wright, and Parker-Hannifin consistently operate with margins in the mid-to-high teens or even higher. This suggests Moog lacks the pricing power or operational efficiency of its rivals. Similarly, return on equity (ROE) improved to 11.85% in FY2024, which is adequate but not best-in-class for the aerospace and defense sector, where more profitable peers generate superior returns on their capital.
The most significant concern in Moog's historical record is its unreliable cash flow. Free cash flow (FCF) has been extremely volatile, swinging from a strong $191 million in FY2020 to a negative -$37 million in FY2023, before recovering to a weak $46 million in FY2024. This inconsistency, largely driven by poor working capital management and inventory build-ups, hampers the company's ability to fund aggressive shareholder returns. While Moog has a consistent history of paying and slowly growing its dividend, its capital allocation has not created significant per-share value, with share buybacks failing to meaningfully reduce the share count over the period.
In conclusion, Moog's historical record shows a company that executes well enough to maintain its position and grow its revenue but struggles to translate that into superior profitability and consistent cash flow. This operational underperformance relative to peers has been reflected in its stock returns, which have lagged most direct competitors over the past five years. The track record suggests resilience but raises questions about management's ability to drive significant long-term value creation.
The following analysis projects Moog's growth potential through fiscal year 2035 (Moog's fiscal year ends September 30th). Projections are based on a combination of analyst consensus estimates where available, management guidance, and independent modeling based on industry trends. For the period FY2024-FY2026, analyst consensus projects Moog's revenue to grow at a compound annual growth rate (CAGR) of ~4-5%, with an EPS CAGR of ~8-10%. This compares to consensus estimates for a direct peer like Woodward, which is expected to see revenue CAGR of ~6-7% and EPS CAGR of ~12-14% over the same period, highlighting Moog's relatively slower growth profile.
Key growth drivers for Moog are rooted in its core markets. In aerospace and defense, which constitutes the bulk of its revenue, growth is driven by government budgets for military aircraft and missile programs, where Moog provides critical flight control and actuation systems. The F-35 program, missile defense systems, and military helicopters are significant revenue sources. A second major driver is the burgeoning space market, including satellite constellations and launch vehicles like NASA's Space Launch System (SLS). The recovery of commercial aerospace, particularly for long-haul aircraft where Moog has significant content, presents a slower but substantial opportunity. Finally, its industrial segment, particularly in automation and medical applications, offers diversification and growth tied to global economic activity.
Compared to its peers, Moog is positioned as a highly competent but financially conservative operator. Its strength lies in its entrenched, often sole-source positions on critical long-term platforms, providing a deep backlog and revenue visibility. However, this stability comes at the cost of lower margins (~11% operating margin) and slower growth compared to more operationally efficient peers like Curtiss-Wright (~17% margin) or those with greater aftermarket exposure like Parker-Hannifin (~23% margin). The primary risk for Moog is its high dependency on a few large government programs; any significant cuts or delays could materially impact results. An opportunity lies in leveraging its expertise in precision motion control for emerging technologies like urban air mobility and industrial electrification, though its progress here has been gradual.
For the near-term 1-year (FY2025) outlook, a normal scenario assumes revenue growth of ~5% (consensus) and EPS growth of ~9% (consensus), driven by stable defense demand and a modest commercial ramp. A bull case could see revenue growth hit ~7% if commercial build rates accelerate faster than expected, while a bear case could see growth fall to ~3% if defense budgets are constrained. The most sensitive variable is commercial aircraft delivery rates; a 10% increase in widebody deliveries could lift Moog's revenue growth by 100-150 basis points to ~6.0-6.5%. For the 3-year (FY2025-FY2027) outlook, a normal scenario projects a revenue CAGR of ~4.5% and an EPS CAGR of ~8%. A bull case driven by new defense program wins could push EPS CAGR to ~11%, while a bear case involving a prolonged industrial downturn could drop it to ~5%. Key assumptions include continued bipartisan support for defense spending, a gradual but steady recovery in commercial air travel, and stable input costs.
Over the long-term, Moog's prospects are moderate. The 5-year (FY2025-FY2029) outlook in a normal case suggests a revenue CAGR of ~4% and an EPS CAGR of ~7%, as major defense programs mature. A bull case, assuming significant wins in next-generation fighter aircraft and a booming commercial space market, could see revenue CAGR approach ~6%. A bear case, where Moog fails to win content on new platforms, could see growth stagnate at ~2%. The 10-year (FY2025-FY2034) outlook is highly dependent on R&D success. The key sensitivity is winning shipset content on future platforms. Securing a major role on a next-generation commercial aircraft or a new large-scale defense program could shift its long-term EPS CAGR from a base case of ~6% to a bull case of ~8-9%. Assumptions include a stable geopolitical environment supporting defense budgets and continued investment in space exploration. Overall, Moog's growth prospects are solid but unlikely to be spectacular, reflecting its mature and stable market position.
As of November 3, 2025, Moog Inc. (Class A) closed at a price of $204.85. A comprehensive valuation analysis suggests the stock is currently trading within a range that can be considered fair value, though with some conflicting signals from different methodologies. A triangulated fair value range for Moog is estimated to be between $180 and $210. With the current price of $204.85 falling within this range, the stock appears fairly valued with a limited margin of safety, making it a candidate for a watchlist.
Moog's valuation hinges heavily on its earnings multiples. Its trailing P/E ratio of 31.43 is high when compared to the broad market but sits below the US Aerospace & Defense industry average. More importantly, the forward P/E ratio of 22.35 indicates that the market expects significant earnings growth, making the valuation more reasonable on a forward-looking basis. The company's EV/EBITDA multiple of 16.24 is higher than historical M&A multiples in the sector, suggesting a premium valuation on this basis. Applying a forward P/E multiple of 20-22x to its implied forward EPS yields a fair value estimate between $183 and $202.
Other valuation approaches present a weaker case for the stock's value. The cash flow perspective is unattractive, with a very low free cash flow (FCF) yield of 0.59%. This indicates the company struggles to convert profits into cash available for shareholders. The total shareholder yield, combining a modest 0.56% dividend and buybacks, is only 1.00%. From an asset perspective, the Price-to-Book (P/B) ratio of 3.35 and Price-to-Tangible-Book of 6.03 do not suggest the stock is undervalued, as its valuation relies on earnings power rather than its tangible asset base.
In conclusion, the valuation of Moog is most dependent on its forward earnings multiples. The current market price appears to have already factored in the optimistic earnings growth forecasted for the next year. While cash flow and asset-based measures are less favorable, the forward earnings outlook supports a fair value conclusion. This makes the stock's performance highly sensitive to its ability to meet or exceed future earnings expectations.
Warren Buffett would view Moog Inc. in 2025 as a fundamentally sound and understandable business, possessing a durable moat built on high switching costs and critical engineering for aerospace and defense platforms. He would appreciate its conservative balance sheet, with a low Net Debt/EBITDA ratio of around 1.8x, which signals financial prudence. However, Buffett would be deterred by Moog's mediocre profitability, as its operating margin of ~11% and Return on Invested Capital (ROIC) of ~9% are significantly below those of best-in-class peers like Parker-Hannifin (~23% margin) and Curtiss-Wright (~17% margin). Management primarily uses its cash to reinvest in the business, as evidenced by a low dividend, but these investments generate adequate, not exceptional, returns. While the valuation is reasonable with a forward P/E of ~15x, Buffett prefers to buy wonderful businesses at a fair price, and Moog qualifies as only a fair business. The takeaway for retail investors is that while Moog is a stable company, Buffett would likely avoid it, preferring to own a higher-quality competitor like Parker-Hannifin (PH), Curtiss-Wright (CW), or HEICO (HEI), which demonstrate superior profitability and capital allocation despite their higher valuations. Buffett's decision might change if Moog saw a significant and sustained improvement in its operating margins or if its stock price fell to a level that offered a much larger margin of safety.
Charlie Munger would acknowledge Moog's entrenched position as a critical aerospace supplier, protected by a durable moat built on decades of engineering trust and high switching costs. However, he would be decisively unimpressed by the company's mediocre financial engine, particularly its return on invested capital hovering around 9%, which signifies a good, but not great, business that struggles to compound shareholder wealth at an attractive rate. While the balance sheet is prudently managed, the combination of modest profitability and a valuation that is fair but not deeply discounted would lead Munger to pass on the investment. For retail investors, the Munger takeaway is that a strong moat is a necessary but insufficient condition; it must be paired with excellent capital returns, which Moog currently lacks compared to its best-in-class peers.
Bill Ackman would view Moog Inc. in 2025 as a high-quality, simple, predictable, free-cash-flow-generative business with a strong moat, but one that is significantly under-earning its potential. He would be drawn to its critical, sole-source positions on long-lifecycle defense and aerospace platforms, which confer substantial pricing power and durability. However, he would immediately focus on the company's operating margin, which at ~11%, lags well behind best-in-class peers like Parker-Hannifin at ~23% and even direct competitors like Curtiss-Wright at ~17%. This margin gap represents the core of a potential activist thesis for Ackman: an opportunity to unlock significant value through operational improvements and more aggressive capital allocation. Given the lack of a clear, existing catalyst—such as a new management team or a strategic review—Ackman would likely place Moog on a watchlist, avoiding an investment until a clear path to realizing this value emerges. Ackman would likely prefer Parker-Hannifin (PH) for its proven operational excellence, TransDigm (TDG) for its aggressive value creation model, or HEICO (HEI) for its consistent high-margin growth, seeing them as better expressions of quality and shareholder focus. A change in Moog's leadership or the announcement of a plan to address its margin underperformance would be the necessary trigger for Ackman to invest.
Moog Inc. has carved out an essential niche within the vast aerospace and defense supply chain, focusing on high-performance motion control technology. The company's products are not commodities; they are highly engineered systems integral to the functioning of aircraft, missiles, and satellites, creating a significant technological moat. This specialization means that Moog is not just a supplier but a critical partner to prime contractors like Boeing, Airbus, and Lockheed Martin. This deep integration into long-term programs provides a stable, recurring revenue stream and high barriers to entry, as switching suppliers for such critical components is incredibly costly and complex for customers.
However, this specialized focus comes with trade-offs when compared to the broader competitive landscape. Moog faces competition from two primary types of companies: large, diversified industrial giants and agile, aftermarket-focused specialists. Diversified players like Parker-Hannifin or Safran possess immense scale, allowing for greater purchasing power, broader R&D capabilities, and more resilient revenue streams that can weather downturns in any single market. On the other end, companies like TransDigm and HEICO have perfected a business model centered on the high-margin aftermarket, acquiring proprietary parts businesses and leveraging pricing power to generate exceptional profitability and returns on capital that far exceed Moog's.
Moog's strategy appears more conservative and organically focused. While it maintains a healthy balance sheet, it has not pursued the aggressive M&A or the ruthless focus on margin optimization that has created enormous value for shareholders of its more aggressive peers. Its profitability, with operating margins typically in the low double digits, is respectable but pales in comparison to the 40-50% EBITDA margins achieved by a company like TransDigm. This results in a lower valuation multiple for Moog, as the market prices in its slower growth and more modest return profile.
In essence, Moog's competitive position is that of a high-quality, indispensable engineer that has not fully translated its technical excellence into top-tier financial performance. It is a solid company that executes well within its domain but is often outmaneuvered and out-earned by competitors with more aggressive financial strategies or greater scale. For investors, this makes Moog a less compelling story for capital appreciation compared to peers who have demonstrated a superior ability to compound shareholder wealth through strategic acquisitions and a relentless focus on profitability.
Parker-Hannifin (PH) is a diversified industrial behemoth that operates on a much larger scale than the more specialized Moog Inc. (MOG.A). While both are leaders in motion and control technologies, PH's business spans across numerous industrial and aerospace markets, providing it with significant revenue diversification and operational scale. Moog, in contrast, is a pure-play specialist, focused on high-performance applications where its engineering is paramount. This makes Moog a critical supplier in its niches, but PH's size and breadth give it superior financial firepower, market reach, and negotiating leverage with both customers and suppliers.
Paragraph 2 → Business & Moat
Directly comparing their moats, both companies benefit from high switching costs and regulatory barriers. For brand, PH's is a globally recognized industrial mark of quality (decades of industrial leadership), while Moog's is a symbol of precision engineering in mission-critical aerospace (gold standard for flight controls). On switching costs, both excel due to deep integration and certification (FAA/EASA approvals), but Moog's sole-source position on platforms like the F-35 flight control system arguably gives it a stickier customer base. The most significant difference is scale; PH's revenue is over five times Moog's (~$19B vs. ~$3.3B), granting it massive economies of scale in procurement and manufacturing. Network effects are minimal for both, but PH's vast distribution network is a clear advantage. Regulatory barriers are high and equal for both in the aerospace sector. Overall, the winner for Business & Moat is Parker-Hannifin due to its overwhelming scale and diversification, which create a more resilient and defensible enterprise.
Paragraph 3 → Financial Statement Analysis
From a financial standpoint, Parker-Hannifin is demonstrably stronger. On revenue growth, PH has consistently outpaced Moog, aided by strategic acquisitions like Meggitt, whereas Moog's growth is more modest and organic. PH's operating margin is significantly higher, typically around ~23%, compared to Moog's ~11%, showcasing superior operational efficiency. This translates to a better Return on Invested Capital (ROIC) for PH (~14%) versus Moog (~9%), indicating more effective use of capital. In terms of liquidity, both are healthy with current ratios over 1.5x, but PH's absolute cash generation is far greater. While Moog has a more conservative balance sheet with lower leverage (Net Debt/EBITDA of ~1.8x vs. PH's ~2.5x), PH's ability to generate immense free cash flow provides greater financial flexibility. The overall Financials winner is Parker-Hannifin because its superior profitability and capital efficiency more than compensate for its higher, but manageable, leverage.
Paragraph 4 → Past Performance
Historically, Parker-Hannifin has delivered superior results for shareholders. Over the past five years (2019-2024), PH's revenue CAGR of ~7% and EPS CAGR of ~12% both comfortably exceed Moog's figures of ~4% and ~6%, respectively, making PH the winner on growth. In terms of margins, PH has executed brilliantly, expanding its operating margin by over 300 basis points in that period, while Moog's has been largely flat, making PH the clear winner on margin trends. This operational outperformance is reflected in shareholder returns; PH's five-year Total Shareholder Return (TSR) is approximately 150%, dwarfing Moog's ~75%. For risk, Moog's lower beta (~1.1 vs. PH's ~1.3) suggests slightly less volatility, giving it the edge on that single metric. However, the overall Past Performance winner is decisively Parker-Hannifin, driven by its stellar track record of growth and value creation.
Paragraph 5 → Future Growth Looking ahead, Parker-Hannifin appears better positioned for future growth. Both companies will benefit from strong tailwinds in commercial aerospace recovery and elevated defense spending. However, PH has additional growth vectors from its exposure to secular trends like electrification, clean energy, and industrial automation, giving it the edge on market demand. While both have strong backlogs tied to key platforms, PH's diversification provides more shots on goal. PH's well-established 'Win Strategy' is a proven driver of cost efficiency and margin expansion, giving it an edge over Moog's operational improvement efforts. Analyst consensus expects PH to continue growing earnings at a faster rate than Moog over the next few years. The overall Growth outlook winner is Parker-Hannifin, whose diversified end-markets and proven operational excellence provide a clearer path to sustained growth.
Paragraph 6 → Fair Value
The market recognizes Parker-Hannifin's superior quality, awarding it a premium valuation. PH trades at a forward P/E ratio of around ~19x and an EV/EBITDA multiple of ~16x. In comparison, Moog appears cheaper, with a forward P/E of ~15x and an EV/EBITDA of ~12x. Both offer modest dividend yields, but PH is a 'Dividend King' with over 65 consecutive years of increases, signaling a stronger commitment to shareholder returns. The quality vs. price assessment is clear: PH's premium is justified by its higher growth, superior margins, and stronger market position. While Moog is cheaper on paper, Moog is the better value today for an investor specifically seeking a lower-multiple stock, but this comes with the expectation of lower performance.
Paragraph 7 → In this paragraph only declare the winner upfront
Winner: Parker-Hannifin Corporation over Moog Inc. Parker-Hannifin is the stronger company and a more compelling investment choice. Its key strengths lie in its immense scale, operational excellence that drives industry-leading margins (~23% vs. Moog's ~11%), and a diversified business model that provides multiple avenues for growth. Moog's notable weaknesses are its comparatively sluggish growth and lower profitability, which have led to significant underperformance in shareholder returns over the long term. While Moog holds a strong, defensible position in its niche markets and maintains a healthier balance sheet (Net Debt/EBITDA ~1.8x), these positives are insufficient to overcome the advantages of PH's superior financial engine and strategic execution. The verdict is supported by nearly every key metric, from historical growth to future outlook.
TransDigm Group (TDG) represents a starkly different business model and investment philosophy compared to Moog Inc. (MOG.A). While both supply critical, highly engineered components to the aerospace industry, TransDigm operates more like a private equity firm, focusing relentlessly on acquiring proprietary businesses with significant aftermarket content and maximizing their profitability. Moog, by contrast, is a more traditional industrial manufacturer focused on engineering excellence and organic growth. This fundamental difference in strategy results in TransDigm having a much smaller revenue base but vastly superior profit margins and a track record of creating shareholder value that is almost unparalleled in the sector.
Paragraph 2 → Business & Moat
Both companies possess strong moats rooted in intellectual property and high switching costs. For brand, Moog is known for engineering integrity (mission-critical systems), while TransDigm's various operating units are known for being sole-source providers of essential parts (~80% of sales from proprietary products). Switching costs are immense for both due to FAA certification, but TransDigm's focus on proprietary aftermarket parts gives it a powerful pricing moat. In terms of scale, Moog's revenues are larger (~$3.3B vs. TDG's ~$6.6B - Note: TDG has grown significantly), but TransDigm's model is not about scale; it's about margin. Neither relies on network effects. Regulatory barriers are a tailwind for both. The winner for Business & Moat is TransDigm Group, as its strategy of consolidating proprietary, sole-source parts businesses creates a more powerful and profitable economic moat than Moog's reliance on new platform engineering.
Paragraph 3 → Financial Statement Analysis
Financially, TransDigm operates in a different league. Its revenue growth has been explosive over the last decade, driven by a string of successful acquisitions. The most striking difference is in margins; TransDigm consistently reports EBITDA margins in the 45-50% range, an astonishing figure that makes Moog's respectable ~14% EBITDA margin look pedestrian. This translates into phenomenal profitability, with an ROIC that often exceeds 20%, far superior to Moog's ~9%. However, this performance is fueled by leverage; TransDigm's Net Debt/EBITDA ratio is often high, in the ~6.0x-7.0x range, compared to Moog's conservative ~1.8x. Despite the high leverage, its massive cash generation provides strong interest coverage. The overall Financials winner is TransDigm Group, as its astronomical profitability and cash flow, despite the high-risk leverage, represent a superior financial model for equity value creation.
Paragraph 4 → Past Performance
TransDigm's historical performance has been exceptional. Over the past five years (2019-2024), TDG has delivered a revenue CAGR of ~9% and an EPS CAGR well into the double digits, easily outpacing Moog's mid-single-digit growth, making TransDigm the winner on growth. Its margins have remained consistently high, a testament to its pricing power, while Moog's have been stable but low, making TDG the winner on margin trends. This has produced extraordinary shareholder returns, with a five-year TSR of approximately 180%, more than double Moog's ~75%. The primary risk metric where Moog wins is leverage and balance sheet stability. TransDigm's stock is also more volatile, with a higher beta (~1.4 vs ~1.1). Nonetheless, the overall Past Performance winner is unquestionably TransDigm Group, whose results have been simply phenomenal.
Paragraph 5 → Future Growth TransDigm's future growth is primarily driven by three factors: continued recovery in the high-margin commercial aftermarket, disciplined price increases, and value-accretive acquisitions. Its M&A pipeline is the key variable and has historically been its most potent growth driver. Moog's growth is more organically tied to the production schedules of large defense and aerospace programs. While Moog's path is perhaps more predictable, TransDigm has the edge on TAM and pricing power, especially in an inflationary environment. Analyst consensus calls for stronger earnings growth from TransDigm. The overall Growth outlook winner is TransDigm Group, though its growth is lumpier and more dependent on the M&A environment.
Paragraph 6 → Fair Value
TransDigm consistently trades at a very high valuation, reflecting its unique business model and stellar track record. Its forward P/E is typically around ~30x, and its EV/EBITDA is often above ~20x. This is a significant premium to Moog's P/E of ~15x and EV/EBITDA of ~12x. TransDigm does not pay a dividend, instead reinvesting all cash flow into acquisitions or returning capital via special dividends. The quality vs. price argument is that TransDigm's ultra-high margins and growth justify its premium valuation. For an investor seeking value based on conventional metrics, Moog is the clear choice. However, for those willing to pay for unparalleled quality and a proven value creation engine, TransDigm is often seen as being 'worth the price'.
Paragraph 7 → In this paragraph only declare the winner upfront
Winner: TransDigm Group Incorporated over Moog Inc. TransDigm is the superior investment vehicle, despite its high-risk financial structure. Its key strength is a masterful business model focused on acquiring and optimizing high-margin, proprietary aftermarket businesses, leading to unparalleled profitability (EBITDA margin ~50% vs. Moog's ~14%). Moog's primary weakness in this comparison is its traditional, lower-margin operating model that has failed to generate comparable shareholder returns. The main risk for TransDigm is its substantial leverage (Net Debt/EBITDA ~6.5x), which makes it vulnerable to credit market shocks, while Moog's risk is its slower, more cyclical growth profile. The verdict is based on TransDigm's proven, long-term ability to compound capital at an extraordinary rate, making it a far more powerful engine for wealth creation.
Woodward, Inc. (WWD) is a very direct competitor to Moog, as both are independent designers and manufacturers of control system solutions and components for the aerospace and industrial markets. They often compete head-to-head for contracts on aircraft engines, turbines, and other complex industrial equipment. Woodward's business is roughly split between Aerospace and Industrial segments, similar to Moog's diversification. However, Woodward has a stronger concentration in engine and fuel systems, while Moog is better known for flight control actuation systems. This makes them close peers with slightly different areas of specialization.
Paragraph 2 → Business & Moat
Both companies build their moats on deep engineering expertise and long-term customer relationships. For brand, both are highly respected Tier-1 suppliers (engineering-first reputations). Switching costs are extremely high for both, as their products are certified and designed into platforms for decades (~25-year product lifecycles). In terms of scale, the two companies are very comparable in revenue (both in the ~$3.0B range), so neither has a significant scale advantage. Network effects are not applicable. Regulatory barriers are a powerful, shared moat for their aerospace segments (FAA/EASA/ITAR). Given their extreme similarity in business model and market position, this is a very close call. The winner for Business & Moat is a Draw, as both possess durable, engineering-driven moats of similar strength.
Paragraph 3 → Financial Statement Analysis
Financially, Woodward has recently demonstrated stronger performance. On revenue growth, Woodward has shown a more robust recovery post-pandemic, with recent TTM growth in the high teens, compared to Moog's high single-digit growth. Woodward has also achieved superior profitability, with operating margins trending towards the mid-teens (~15%), surpassing Moog's ~11%. This leads to a better ROIC for Woodward (~11%) compared to Moog (~9%). Both companies maintain conservative balance sheets, with Net Debt/EBITDA ratios typically below 2.0x, and both generate healthy free cash flow. Liquidity is also comparable and adequate for both. The overall Financials winner is Woodward, Inc. due to its recent outperformance in both growth and, more importantly, profitability.
Paragraph 4 → Past Performance
Over a longer five-year window (2019-2024), the performance comparison is more mixed, partly due to Woodward's terminated merger with Hexcel and the pandemic's impact. In that period, Moog has shown slightly more stable revenue and earnings, giving it an edge on consistency. However, Woodward's margin trend has been more positive in the last two years as it recovered, while Moog's has been flat. In terms of shareholder returns, Woodward's five-year TSR of ~90% has modestly outpaced Moog's ~75%. Risk profiles are similar, with comparable betas (~1.2) and balance sheet strength. This is a close contest, but based on the better shareholder return and recent momentum, the overall Past Performance winner is Woodward, Inc. by a narrow margin.
Paragraph 5 → Future Growth Both companies are poised to benefit from strong aerospace and defense market fundamentals. Woodward's growth is heavily tied to commercial aerospace recovery, particularly engine build rates for Airbus and Boeing, and increasing demand for fuel-efficient engines. Moog's growth is also linked to commercial aerospace, but with a heavier weighting on defense spending for missiles and military aircraft. Both have strong backlogs. Analysts project slightly higher earnings growth for Woodward over the next few years, driven by margin expansion as its volumes recover. The overall Growth outlook winner is Woodward, Inc., as its leverage to the commercial engine recovery provides a slightly stronger near-term catalyst.
Paragraph 6 → Fair Value
Woodward and Moog are often valued similarly by the market, reflecting their status as close peers. Woodward currently trades at a forward P/E ratio of ~20x and an EV/EBITDA multiple of ~14x. This represents a slight premium to Moog's forward P/E of ~15x and EV/EBITDA of ~12x. Both pay a small dividend. The quality vs. price argument suggests that Woodward's modest premium is warranted given its better recent growth and higher margins. For an investor choosing today, Moog offers better value on a relative basis, as the valuation gap seems slightly wider than the performance gap would suggest.
Paragraph 7 → In this paragraph only declare the winner upfront
Winner: Woodward, Inc. over Moog Inc. Woodward emerges as the narrow winner in this head-to-head matchup of close competitors. Its key strengths are its superior profitability (operating margin ~15% vs. Moog's ~11%) and stronger leverage to the commercial aerospace recovery, which has driven better recent growth and shareholder returns. Moog's primary weakness in this comparison is its less impressive margin profile and slightly more muted growth outlook. Both companies are high-quality, stable operators with strong moats, and their risk profiles are very similar. The verdict is based on Woodward's demonstrated ability to convert its strong market position into better financial results, making it the slightly more attractive investment choice.
HEICO Corporation (HEI) competes with Moog primarily in the aerospace aftermarket, but with a fundamentally different and more aggressive business model. HEICO specializes in producing FAA-approved, non-OEM replacement parts (PMA - Parts Manufacturer Approval) and in repair and overhaul services. This aftermarket focus, combined with a highly effective M&A strategy of acquiring niche electronics and aerospace component businesses, allows HEICO to achieve much higher profit margins and faster growth than Moog, which is more reliant on original equipment manufacturing (OEM) programs.
Paragraph 2 → Business & Moat
HEICO's moat is built on regulatory expertise and a fragmented acquisition strategy, while Moog's is built on deep engineering integration with OEMs. For brand, Moog is an OEM partner, while HEICO is the leading independent alternative (trusted PMA leader). Switching costs are high for Moog's OEM parts, but HEICO lowers switching costs for airlines by offering a cheaper, certified alternative. HEICO's scale comes from its vast portfolio of ~100,000 parts, while Moog's is tied to large platforms. A key HEICO moat is its regulatory prowess in navigating the FAA approval process, a significant barrier for others. The winner for Business & Moat is HEICO Corporation, as its business model, which actively disrupts the high-margin OEM aftermarket, has proven to be incredibly durable and profitable.
Paragraph 3 → Financial Statement Analysis
HEICO is financially superior to Moog in almost every way except for balance sheet conservatism. HEICO has delivered compound annual revenue growth near ~15% for over two decades, a phenomenal track record that dwarfs Moog's low-single-digit average. Its operating margins are consistently above 20%, far better than Moog's ~11%. This drives a much higher ROIC, often in the 15-20% range, compared to Moog's ~9%. HEICO also carries very little debt, with a Net Debt/EBITDA ratio typically below 1.0x, making it even more conservative than Moog (~1.8x). It generates strong and consistent free cash flow, which it uses to fund its steady stream of acquisitions. The overall Financials winner is decisively HEICO Corporation due to its combination of high growth, high margins, and a fortress balance sheet.
Paragraph 4 → Past Performance
HEICO's past performance is in the elite tier of industrial companies. Over the past five years (2019-2024), its revenue and EPS growth have consistently been in the double digits, making it the clear winner on growth versus Moog. Its margins have remained strong and stable, a testament to its pricing power, making it the winner on margin trends. This has translated into spectacular shareholder returns, with a five-year TSR of around 120%, significantly outpacing Moog's ~75%. On risk, HEICO is actually less risky from a balance sheet perspective, though its high valuation could be considered a risk. The overall Past Performance winner is HEICO Corporation by a landslide, reflecting its superior business model and execution.
Paragraph 5 → Future Growth HEICO's future growth drivers remain robust. Its core opportunity is the continued penetration of the PMA market, which still represents a small fraction of the total aerospace parts market, giving it a long runway for organic growth. This is supplemented by a proven, repeatable strategy of small, tuck-in acquisitions. Moog's growth is tied to the slower-moving cycles of OEM production and government budgets. HEICO has the edge on TAM penetration, M&A potential, and pricing power. Analysts expect HEICO to continue its double-digit earnings growth trajectory. The overall Growth outlook winner is HEICO Corporation, which has a more dynamic and controllable growth path.
Paragraph 6 → Fair Value
Excellence comes at a price, and HEICO commands a very high valuation. It typically trades at a forward P/E ratio of 40x-50x and an EV/EBITDA multiple of ~30x. This is a massive premium to Moog's valuation (P/E ~15x, EV/EBITDA ~12x). HEICO pays a negligible dividend, reinvesting for growth. The quality vs. price debate is central to HEICO as an investment; its premium is a reflection of its incredible consistency, high growth, and fortress balance sheet. For a pure value investor, Moog is the only choice. However, history has shown that HEICO has consistently grown into its high multiple, rewarding long-term investors.
Paragraph 7 → In this paragraph only declare the winner upfront
Winner: HEICO Corporation over Moog Inc. HEICO is a fundamentally superior business and a better long-term investment. Its key strength is a brilliant business model focused on the high-margin PMA aftermarket and disciplined M&A, which delivers consistent double-digit growth and 20%+ operating margins. Moog's comparative weakness is its reliance on lower-margin OEM business and a less dynamic growth profile. The primary risk for HEICO is its perpetually high valuation, which requires flawless execution to justify, while Moog's risk is cyclicality and margin pressure. The verdict is based on HEICO's exceptional track record of execution, superior financial metrics across the board, and a clearer path to sustained, high-return growth.
Curtiss-Wright Corporation (CW) is a diversified engineering company with a long history in aerospace, sharing a similar heritage with Moog. Like Moog, Curtiss-Wright provides highly engineered, mission-critical components and subsystems, but its portfolio is broader, spanning across aerospace, defense, commercial power, and general industrial markets. While Moog is a specialist in motion control, CW's expertise includes flight control, actuation, data acquisition, and specialized valves and pumps. This makes them competitors in certain niches but also diversified peers with different areas of focus.
Paragraph 2 → Business & Moat
Both companies derive their moats from deep engineering capabilities and being designed into long-lifecycle platforms. Their brands are both synonymous with reliability in their respective niches (high-spec engineering). Switching costs are prohibitively high for both, cemented by decades-long program life and stringent regulatory approvals. In terms of scale, Curtiss-Wright is slightly larger with revenues around ~$2.8B to Moog's ~$3.3B, making them very comparable. Neither business model relies on network effects. Curtiss-Wright has a strategic focus on being the sole-source provider on 80% of its defense programs, which is a very powerful moat, arguably stronger and more clearly articulated than Moog's. The winner for Business & Moat is Curtiss-Wright Corporation, due to its explicit and successful strategy of securing sole-source, defensible market positions.
Paragraph 3 → Financial Statement Analysis
Curtiss-Wright has demonstrated superior financial discipline and profitability. While revenue growth for both companies has been in the mid-single-digits, CW has consistently delivered higher profit margins, with operating margins in the 16-17% range, significantly better than Moog's ~11%. This focus on profitability leads to a stronger ROIC for CW, typically ~12% versus Moog's ~9%. Both companies run with conservative leverage, with Net Debt/EBITDA ratios comfortably below 2.0x. However, CW's higher margins allow it to generate more free cash flow relative to its revenue. The overall Financials winner is Curtiss-Wright Corporation based on its sustained margin advantage and more efficient use of capital.
Paragraph 4 → Past Performance
Over the last five years (2019-2024), Curtiss-Wright has been a more consistent performer. Winner for growth is a draw, as both have grown revenues and earnings at similar mid-single-digit rates. However, CW is the clear winner on margins, having expanded its operating margin by over 100 basis points during this period, while Moog's has been flat. This operational success has driven better shareholder returns, with CW's five-year TSR of ~100% clearly beating Moog's ~75%. The risk profiles are similar, with low leverage and comparable stock volatility. The overall Past Performance winner is Curtiss-Wright Corporation because its focus on profitable growth has created more value for shareholders.
Paragraph 5 → Future Growth Future growth prospects for both companies are solid, underpinned by strong defense budgets and a recovering commercial aerospace market. Curtiss-Wright's growth strategy is based on aligning its portfolio with top-tier defense programs and leveraging its technology into adjacent markets. Moog's growth is similarly tied to key platforms in space, defense, and aircraft. Curtiss-Wright has been more active in strategic, bolt-on M&A to acquire new technologies, giving it an edge in inorganic growth. Analysts forecast slightly higher EPS growth for CW, driven by ongoing margin expansion initiatives. The overall Growth outlook winner is Curtiss-Wright Corporation, given its proven ability to enhance growth and profitability through strategic acquisitions and operational improvements.
Paragraph 6 → Fair Value
Reflecting its stronger profitability, Curtiss-Wright trades at a modest premium to Moog. CW's forward P/E ratio is around ~18x with an EV/EBITDA multiple of ~13x. This compares to Moog's forward P/E of ~15x and EV/EBITDA of ~12x. Both have similar dividend yields of under 1%, prioritizing reinvestment in the business. The quality vs. price analysis suggests that CW's slight premium is well-deserved given its superior margins and returns on capital. While neither stock looks expensive, Moog is technically the better value on paper due to its lower multiples, but the difference is not large enough to ignore CW's superior operational track record.
Paragraph 7 → In this paragraph only declare the winner upfront
Winner: Curtiss-Wright Corporation over Moog Inc. Curtiss-Wright stands out as the stronger company due to its superior financial discipline and more effective capital allocation. Its key strength is its consistent ability to generate higher profit margins (operating margin ~17% vs. Moog's ~11%) from its portfolio of sole-source, highly engineered products. Moog's weakness in this comparison is its inability to translate its own strong technical positions into a similar level of profitability. Both companies are low-risk, high-quality operators, but CW's focus on margin expansion and shareholder returns has resulted in a better long-term track record. The verdict is based on CW's proven operational excellence, which makes it a more efficient and rewarding investment.
Safran S.A. is a French multinational aerospace and defense powerhouse, operating on a vastly different scale than Moog. As one of the world's top aerospace suppliers, Safran's business is dominated by aircraft propulsion (through its CFM International joint venture with GE), aircraft equipment, and defense. While Moog competes with Safran's equipment division in areas like landing gear and flight controls, Safran's overall size, market power, and deep integration with aircraft manufacturers like Airbus place it in a different strategic category. This comparison is one of a niche specialist versus a global, integrated giant.
Paragraph 2 → Business & Moat
Both have powerful moats, but Safran's is arguably wider. For brand, Safran is a global household name in aviation (CFM engines power over 70% of single-aisle jets), while Moog is a specialist known to engineers. Switching costs for both are immense, but replacing a Safran engine platform is virtually impossible for an airline, giving it a near-permanent moat. Safran's scale is massive, with revenues exceeding €23B compared to Moog's ~$3.3B, providing enormous R&D and manufacturing advantages. Safran also benefits from a powerful network effect in its aftermarket services, with a global network of MRO (Maintenance, Repair, and Overhaul) shops. Regulatory barriers are a shared strength. The winner for Business & Moat is Safran S.A. due to its dominant market share in a critical duopoly (jet engines), its massive scale, and its extensive aftermarket network.
Paragraph 3 → Financial Statement Analysis
Safran's financial profile is that of a market leader. Its revenue base is many times larger than Moog's, and its growth is directly tied to the powerful driver of global air travel growth. Safran's operating margins, typically in the 15-18% range (pre-pandemic), are consistently superior to Moog's ~11%, driven by the highly profitable services and aftermarket business. This results in a much higher ROIC. Safran maintains a strong balance sheet for its size, with leverage ratios managed prudently. Its key strength is its prodigious free cash flow generation from the engine services portfolio, which provides billions in capital for R&D, dividends, and acquisitions. The overall Financials winner is Safran S.A. due to its superior scale, profitability, and cash generation machine.
Paragraph 4 → Past Performance
Over the past five years (2019-2024), a period heavily impacted by the pandemic, Moog's performance in defense markets provided more stability than Safran's, which is heavily exposed to commercial aviation. However, Safran's recovery has been much stronger. Prior to the pandemic and in the recovery since, Safran's growth in both revenue and earnings has been far more dynamic than Moog's. Its five-year TSR of ~40% is lower than Moog's ~75%, but this is skewed by the pandemic's severe impact on aviation stocks. Looking at a ten-year horizon, Safran has been a far superior performer. Given its powerful rebound and stronger fundamental business, the overall Past Performance winner is Safran S.A. when viewed through a full business cycle lens.
Paragraph 5 → Future Growth Safran's future growth prospects are exceptionally strong. Its primary driver is the massive and growing global fleet of aircraft powered by its CFM engines, which creates a multi-decade, high-margin annuity stream of aftermarket revenue. As global air travel continues to grow, so will Safran's services revenue. It is also a key player in the development of next-generation sustainable aviation technologies. Moog's growth is solid but lacks this single, powerful secular tailwind. Safran's pricing power in its aftermarket is also far stronger than Moog's. The overall Growth outlook winner is Safran S.A. by a significant margin.
Paragraph 6 → Fair Value
Safran typically trades at a premium valuation that reflects its market leadership and growth outlook. Its forward P/E ratio is often in the 20-25x range, with an EV/EBITDA multiple around ~15x. This is a clear premium to Moog's valuation (P/E ~15x, EV/EBITDA ~12x). Safran also pays a more substantial dividend. The quality vs. price argument is that Safran's premium is fully justified by its duopolistic market position, massive aftermarket annuity stream, and stronger growth profile. While Moog is cheaper on a relative basis, it is a fundamentally lower-quality business compared to Safran.
Paragraph 7 → In this paragraph only declare the winner upfront
Winner: Safran S.A. over Moog Inc. Safran is unequivocally the stronger company and the superior long-term investment. Its key strength is its dominant, near-duopoly position in the narrow-body jet engine market, which provides a massive, high-margin aftermarket revenue stream for decades (CFM engine franchise). Moog's weakness in this comparison is simply a matter of scale and market power; it is a niche player in a world of giants. The primary risk for Safran is a major global event that cripples air travel (like a pandemic), while Moog's risks are more tied to specific program cancellations or budget cuts. The verdict is based on Safran's vastly superior business model, which is one of the most attractive in the entire industrial sector.
Based on industry classification and performance score:
Moog possesses a solid business model built on mission-critical motion control systems for the aerospace and defense sectors. Its key strength is a durable competitive moat, secured by high switching costs and sole-source positions on vital long-term programs like the F-35 fighter jet. However, the company consistently lags top-tier peers in profitability, with operating margins around 11% versus competitors who often exceed 15-20%. The investor takeaway is mixed; Moog is a resilient and technologically important company, but its business model has not translated into the superior financial returns seen elsewhere in its industry.
The company maintains a strong and growing backlog, which provides excellent multi-quarter revenue visibility and signals healthy demand, particularly from defense and space programs.
A key strength for Moog is its robust order backlog, which recently stood at $2.65 billion. This large backlog is a direct result of its position on long-term aerospace and defense programs and provides investors with a high degree of confidence in near-term revenue. A book-to-bill ratio (new orders divided by revenue) that is consistently near or above 1.0x shows that demand for its products is healthy and the company is successfully replenishing its future work pipeline.
The backlog represents roughly nine months of the company's annual revenue, which is a strong figure that reduces uncertainty and underscores the stability of its business model. This visibility is especially valuable in the aerospace and defense industry, where program timelines can span decades. This strong and predictable demand foundation is a clear positive for the company.
While Moog's gross margins are exceptionally stable, demonstrating good cost control, their absolute level is structurally lower than that of more profitable industry peers.
Moog has a long track record of maintaining highly stable gross profit margins, which have consistently remained in a tight band around 26-27%. This stability is a positive sign, indicating effective operational management and the likely presence of long-term contracts that allow the company to pass through rising material and labor costs to its customers. This protects profitability from the volatility of the economic cycle.
However, the level of this margin is a significant weakness when benchmarked against its sub-industry. Top-tier competitors like Curtiss-Wright (~35%), Parker-Hannifin (~35-40%), and HEICO (~40%) operate with substantially higher gross margins. This wide gap signifies that Moog's business model, while stable, is inherently less profitable at its core than those of its peers. Because the margin level is as important as its stability, this factor is a net negative.
Moog has secured critical, high-value content on the world's most important and long-lasting commercial and defense platforms, ensuring its relevance for decades.
A cornerstone of Moog's moat is its presence on premier, long-duration aerospace and defense programs. In commercial aerospace, it supplies critical systems for the highest-volume platforms, such as the Airbus A320neo and Boeing 787. This locks in decades of production and aftermarket revenue as these planes are built and serviced.
In the defense sector, Moog's position is even stronger. It is the sole-source provider of the primary flight control actuation system for the F-35 Joint Strike Fighter, arguably the most important defense program in the Western world. This program alone provides a clear and predictable revenue stream that will last for generations. This diversified exposure to the industry's most successful and well-funded platforms is arguably Moog's greatest strength, de-risking its future and ensuring its engineering remains critical to its customers.
Moog has a stable aftermarket business that provides recurring revenue, but its smaller scale and lower margins compared to specialist peers indicate limited pricing power.
Moog's aftermarket sales, which include spares and services, are a crucial source of stable, higher-margin revenue. However, this segment is less dominant in Moog's overall business mix compared to industry leaders like TransDigm or HEICO, who focus almost exclusively on this lucrative area. This is reflected in Moog's profitability metrics; its operating margin consistently hovers around 11%. This is substantially below the 20% to 50% margins reported by aftermarket-focused peers, indicating that Moog possesses less pricing power.
While Moog's aftermarket business benefits from its large installed base on long-life platforms, it does not appear to be the primary profit engine for the company. The inability to command premium pricing comparable to the best in the sub-industry suggests its position, while solid, is not as powerful. For investors, this means that while the aftermarket provides stability, it does not provide the exceptional profitability that drives superior shareholder returns elsewhere in the sector.
Moog has a well-diversified customer base across the commercial, military, and industrial sectors, preventing over-reliance on any single customer or market.
Moog's revenue streams are commendably balanced, reducing the risk associated with any single customer or end market. In its most recent fiscal year, its largest customer, Airbus, accounted for just 12% of total sales, a very manageable level of concentration. The company sells to a blue-chip list of clients, including Boeing, Lockheed Martin, and the U.S. government, ensuring it is not beholden to any one entity.
Furthermore, its sales are split effectively across different markets. Commercial aircraft represents a significant portion, but this is balanced by substantial revenue from military aircraft, space, and defense programs. This diversification proved valuable during the commercial aerospace downturn of 2020, as strength in its military business helped cushion the blow. This balanced exposure across markets with different cycles is a fundamental strength of Moog's business strategy.
Moog Inc. shows a mixed financial picture. The company is delivering solid revenue growth, with sales up over 7% in the latest quarter, and maintains stable operating margins around 10.5%. However, its ability to convert these profits into cash is inconsistent, and it carries a significant debt load of over $1.2 billion. While profitability is steady, the combination of high debt and volatile cash flow creates a cautious outlook for investors.
Moog carries a significant debt load, but its current profitability provides a healthy cushion to cover interest payments, and its short-term liquidity is strong.
Moog's balance sheet is characterized by a substantial amount of debt, totaling $1.28 billion as of Q3 2025. This results in a debt-to-equity ratio of 0.66, which indicates a notable but manageable level of leverage. A more critical metric, Net Debt to TTM EBITDA, is approximately 2.59x, which is approaching the higher end for an industrial company and warrants investor attention. Although industry-specific comparison data is not available, this level of leverage could pose risks during an economic downturn.
Despite the high debt, the company's ability to service it appears solid for now. In Q3 2025, Moog generated $103.16 million in operating income (EBIT) against an interest expense of $17.79 million, resulting in an interest coverage ratio of about 5.8x. This is a healthy buffer, suggesting profits are more than sufficient to meet interest obligations. Furthermore, its liquidity is strong, with a current ratio of 2.43, indicating it has ample current assets to cover its short-term liabilities. While the overall debt level is a weakness, the immediate risk is mitigated by strong coverage and liquidity.
The company's ability to turn profit into cash is highly inconsistent, with a strong latest quarter undermined by very weak performance in the prior quarter and the last full year.
Moog's cash flow performance presents a mixed and concerning picture. In the most recent quarter (Q3 2025), the company generated a robust operating cash flow of $125.33 million and free cash flow (FCF) of $92.67 million. This was a dramatic improvement from Q2 2025, where FCF was nearly zero at $1.82 million. This volatility highlights a potential weakness in managing working capital. For the entire fiscal year 2024, Moog generated just $46.33 million in FCF from over $207 million in net income, a poor conversion rate that signals profits are being tied up in the business rather than converted to cash.
The balance sheet confirms this, with inventory levels at $924.68 million and receivables at $1.27 billion in the latest quarter. While large working capital is typical for long-cycle aerospace businesses, Moog's inconsistent cash generation makes it difficult to rely on. An unpredictable cash flow stream can make it harder to pay down debt, invest in growth, or return capital to shareholders. The strong recent quarter is positive, but it is not enough to offset the pattern of weak and volatile cash conversion.
Moog generates modest but positive returns on its invested capital and equity, indicating it is creating value, though not at an exceptionally high rate.
The company's ability to generate returns from its capital base is adequate. For its last fiscal year (FY 2024), Moog reported a Return on Equity (ROE) of 11.85% and a Return on Capital (ROIC) of 8.48%. These returns are decent, suggesting that management is deploying shareholder and debtholder capital to generate profits effectively enough to likely exceed its cost of capital. An ROIC of 8.48% means for every dollar invested in the business, the company generated about 8.5 cents in profit, which is a positive sign of value creation.
Capital expenditures for FY 2024 were $156.02 million, representing 4.3% of sales, a reasonable level of reinvestment for a manufacturing-heavy business. The asset turnover ratio of 0.91 suggests the company uses its assets with fair efficiency to generate revenue. While these return metrics are not high enough to be considered exceptional, they are consistently positive and demonstrate a disciplined approach to capital allocation.
The company is posting solid and accelerating top-line growth, although a lack of segment data prevents a deeper analysis of its revenue sources.
Moog is demonstrating healthy momentum in its revenue growth. For the full fiscal year 2024, sales grew by a respectable 8.74%. This trend has continued, with year-over-year growth accelerating from just 0.49% in Q2 2025 to a much stronger 7.36% in Q3 2025. This acceleration is a positive indicator of demand for its products and its position in the market. The absolute revenue figure of $971.36 million in the latest quarter shows the scale of its operations.
The provided data does not offer a breakdown of revenue mix between key segments such as commercial aviation versus defense, or original equipment versus higher-margin aftermarket sales. This information is critical for assessing the quality and durability of growth in the aerospace and defense industry, as a higher mix of aftermarket and defense revenue is typically more stable. Despite this lack of detail, the overall top-line growth rate is strong on its own merits.
The company consistently maintains healthy and stable profitability margins, which demonstrates effective cost control and operational discipline.
Moog exhibits strong performance in its margin structure. In the most recent quarter (Q3 2025), its gross margin was 27.37% and its operating margin was 10.62%. These figures are remarkably consistent with the prior quarter's 27.39% gross margin and 10.32% operating margin, as well as the fiscal year 2024 results (Gross: 27.62%, Operating: 10.43%). This stability is a key strength, as it shows the company can protect its profitability regardless of minor fluctuations in sales or costs.
While direct industry benchmark data is not provided, an operating margin consistently above 10% is generally considered healthy for an advanced components supplier in the aerospace and defense sector. This level of profitability indicates that Moog has a degree of pricing power and manages its manufacturing and overhead costs effectively. For investors, this margin stability provides a degree of predictability to the company's earnings power.
Over the past five years, Moog Inc. has demonstrated steady but unspectacular revenue growth, with sales increasing from $2.89B in fiscal 2020 to $3.61B in 2024. However, its performance is weighed down by key weaknesses, including operating margins that remain below 11% and highly volatile free cash flow, which was negative in fiscal 2023. While the company is a critical supplier in its niche, it has failed to match the profitability and shareholder returns of competitors like Parker-Hannifin and Curtiss-Wright. The overall investor takeaway on its past performance is mixed-to-negative, reflecting a stable business that has struggled with financial execution and has underperformed its peers.
The stock's total shareholder return has lagged significantly behind its peer group over the last five years, indicating the market has penalized its weaker profitability and cash flow.
Past performance is the ultimate measure for an investor, and on this metric, Moog has disappointed. Its five-year total shareholder return (TSR) of approximately 75% has been materially outpaced by nearly every major competitor, including Parker-Hannifin (~150%), TransDigm (~180%), HEICO (~120%), and Curtiss-Wright (~100%). This consistent underperformance is a strong signal that the market recognizes the company's operational shortcomings relative to its peers. From a risk perspective, its stock beta is 1.08, suggesting it moves in line with the broader market and offers little in terms of defensive characteristics. The combination of market-level risk and below-average returns makes for a poor historical risk/reward profile.
The company's free cash flow (FCF) has been highly volatile and unreliable, including a negative result in fiscal 2023, pointing to significant challenges with working capital management.
Moog's track record in generating free cash flow is a major weakness. After strong performances in FY2020 ($190.9M) and FY2021 ($164.5M), FCF deteriorated significantly to $107.4M in FY2022, then turned negative to -$37.4M in FY2023. The recovery in FY2024 was weak, at just $46.3M on over $3.6B in revenue, resulting in a thin FCF margin of 1.3%. This volatility stems primarily from large investments in working capital, particularly inventory, which consumed over $125M of cash in both FY2023 and FY2024. This unreliability makes it difficult to predict the company's ability to fund its operations and shareholder returns without relying on debt, and it stands in stark contrast to the more consistent cash generation of its higher-quality peers.
While Moog's operating margins have gradually improved, they remain stuck in the low double-digits and are consistently and significantly below those of key competitors.
Moog has demonstrated some resilience by slowly expanding its operating margin from 8.14% in FY2020 to 10.43% in FY2024. This indicates some level of cost control and operational improvement. However, the company's profitability profile is structurally weak compared to nearly all its main competitors. Peers like Curtiss-Wright (~17%), Woodward (~15%), and Parker-Hannifin (~23%) operate at much higher levels of profitability. Moog's inability to break out of its historical margin range suggests it may lack the pricing power or scale benefits enjoyed by its rivals. This persistent margin gap is a core reason for its historical underperformance and indicates a competitive disadvantage.
Moog has delivered consistent mid-single-digit revenue growth over the past five years, and while EPS has been more volatile, the underlying trend is positive.
The company has a solid track record of top-line growth. Revenue grew from $2.885B in FY2020 to $3.609B in FY2024, representing a compound annual growth rate (CAGR) of 5.8%. This demonstrates durable demand for its highly engineered products across aerospace and defense cycles. The earnings per share (EPS) trend is positive but looks artificially high when starting from the pandemic-affected low of $0.28 in FY2020. Using the more normalized FY2021 EPS of $4.90 as a base, the CAGR through FY2024 ($6.48) is a healthy 9.7%. This performance shows an ability to grow earnings faster than sales, which is a positive sign of operational leverage, even if overall profitability remains low.
Moog consistently returns capital through dividends and buybacks, but the overall impact is modest due to a low dividend yield and minimal share count reduction in recent years.
Over the past five years, Moog's management has maintained a balanced but uninspiring capital allocation policy. The company reliably pays and grows its dividend, with annual increases in the low-to-mid single digits, such as 3.74% in FY2024. However, with a yield of around 0.56% and a conservative payout ratio of 17%, the dividend is not a compelling reason to own the stock. Share repurchases have been inconsistent; after a significant $239 million buyback in FY2020, subsequent amounts have been smaller, like the $59.6 million spent in FY2024. This has not led to a significant reduction in shares outstanding, which only decreased from 33 million in FY2020 to 32 million in FY2024. This approach contrasts with more aggressive capital return programs at peers and suggests that capital allocation is not a primary driver of shareholder value for Moog.
Moog's future growth outlook is stable but modest, heavily reliant on its strong position in long-cycle defense and space programs. The company benefits from tailwinds like increased defense spending and space exploration, but faces headwinds from a slower commercial aerospace recovery and margin pressure. Compared to peers like Woodward and Curtiss-Wright, Moog exhibits lower profitability, and it lacks the scale of Parker-Hannifin or the high-margin aftermarket focus of TransDigm and HEICO. The investor takeaway is mixed; Moog offers steady, defensible revenue streams but is unlikely to deliver the high growth or margin expansion seen elsewhere in the sector.
Moog's capital expenditures are disciplined but appear less aggressive than some peers, reflecting its lower margins and potentially limiting its ability to capture upside from production ramps or drive significant margin expansion through automation.
Moog's capital expenditures as a percentage of sales typically range from 2.5% to 3.5%. This level of investment is adequate for maintaining existing capabilities and supporting gradual growth. However, it appears conservative when compared to the broader industry's push to automate and expand capacity ahead of major production ramps by OEMs like Airbus and Boeing. Competitors like Parker-Hannifin leverage their superior scale and cash flow to invest more heavily in productivity initiatives. Moog's lower operating margins (~11%) inherently constrain its ability to self-fund major capacity upgrades without taking on more debt. While the company is actively investing in areas like additive manufacturing, the scale of these investments does not suggest a transformative impact on margins or output in the near term. This conservative stance is a risk, as it could lead to production bottlenecks or leave Moog less cost-competitive if peers achieve greater efficiency gains.
While Moog benefits from the overall aerospace recovery, its growth is less sensitive to the narrowbody aircraft ramp than peers, and potential disruptions at key customers like Boeing present a near-term headwind.
Moog has significant content on both Boeing and Airbus platforms, particularly on widebody aircraft like the 787 and A350. The recovery in long-haul travel and subsequent ramp-up in widebody production is a positive long-term driver. However, this recovery is proceeding more slowly than the narrowbody market, where peers like Safran (via its CFM engine venture) and Woodward have greater exposure. Furthermore, ongoing production issues and delivery slowdowns at Boeing pose a direct risk to Moog's near-term revenue targets in its commercial aircraft segment. While Moog's diversification in defense, space, and industrial markets mitigates this risk, its leverage to the most powerful driver in aerospace today—the narrowbody production ramp—is less direct than that of its top-performing peers. This exposure profile suggests solid but not spectacular growth from this driver.
The company has a strong track record of securing critical, sole-source positions on next-generation defense and space programs, which is the primary driver of its long-term growth.
Moog's core competency is winning content on high-priority, long-lifecycle platforms. It is a critical supplier for the F-35 fighter jet (actuation systems), the V-22 Osprey, and numerous missile programs. Crucially for future growth, Moog is also a key supplier for NASA's Space Launch System (SLS) and is involved in various other space and satellite programs. These wins are significant because they are often sole-source contracts that provide decades of recurring revenue through production and aftermarket support. Compared to competitors, who may have broader but less specialized portfolios, Moog's strength is its deep integration into these franchise programs. The risk is that this concentrates its future on a handful of large platforms, but its historical success in this area is undeniable and forms the bedrock of its future revenue stream.
Moog maintains a strong backlog, providing excellent revenue visibility, although its book-to-bill ratio can fluctuate and has recently been near or slightly below 1.0, suggesting a plateau in near-term growth.
Moog's backlog is a key strength, typically standing at over $4 billion, which represents more than a year of revenue. This provides significant stability and predictability for investors. For example, at the end of Q2 FY2024, the company reported a total backlog of $4.2 billion. This is a crucial metric for an aerospace and defense supplier, as it represents future contracted revenue from long-cycle programs. However, its book-to-bill ratio, which measures orders received versus revenue billed, has recently hovered around 1.0. A ratio consistently above 1.0 indicates growing future demand. While a ratio near 1.0 is healthy and indicates demand is keeping pace with shipments, it does not signal an acceleration in growth, unlike some peers who have seen ratios climb higher during the aerospace recovery. The stability of the backlog, particularly in its defense and space segments, is a significant positive, but the lack of a strong book-to-bill tailwind limits the upside potential.
Moog consistently invests in R&D to maintain its technological edge in precision motion control, but its spending as a percentage of sales is modest and has not translated into industry-leading margins or growth.
Moog's R&D spending is consistently around 5-6% of sales, a respectable figure that reflects its engineering-driven culture. This investment is crucial for developing the next-generation actuation and control systems needed for future aircraft, missiles, and space vehicles. The company is actively working on technologies related to electrification and more efficient hydraulic systems. However, when compared to the R&D budgets of larger competitors like Parker-Hannifin or Safran, Moog's absolute spending is much lower, limiting the scope of its research. Furthermore, while the R&D is essential for winning new programs, it hasn't resulted in a significant expansion of the company's historically stable but modest profit margins. The return on this R&D investment, measured by revenue growth and profitability, lags behind more financially successful peers like HEICO or TransDigm, which achieve high returns through different business models. The investment is necessary to defend its position but does not appear to be a catalyst for outperformance.
Based on an analysis of its current valuation metrics, Moog Inc. (Class A) appears to be fairly valued. As of November 3, 2025, with the stock price at $204.85, its forward-looking earnings multiple suggests a reasonable price for its expected growth, while its trailing multiples appear elevated. Key indicators supporting this view include a high trailing P/E ratio of 31.43 which moderates to a more attractive 22.35 on a forward basis, and an EV/EBITDA multiple of 16.24. The investor takeaway is neutral; the current price seems to adequately reflect near-term earnings expectations, suggesting limited immediate upside without significant earnings outperformance.
The combined dividend and buyback yield is very low, offering minimal direct return to shareholders and making total return highly dependent on stock price appreciation.
Moog offers a very modest dividend yield of 0.56%, which is unlikely to attract income-focused investors. The dividend payout ratio is a low 17.66%, indicating that the majority of profits are being retained for reinvestment, which is a positive sign for growth but not for income. The buyback yield adds another 0.44%, bringing the total shareholder yield to just 1.00%. This low level of capital return means investors are almost entirely reliant on capital gains for their returns, which increases risk if growth expectations are not met.
The company's cash flow multiples are very high, with a low free cash flow yield, indicating the stock is expensive based on its ability to generate cash for shareholders.
Moog's EV/EBITDA multiple of 16.24 is elevated compared to recent aerospace and defense M&A transaction medians, which have been in the 11.8x to 14.1x range. This suggests the market is paying a premium for Moog's enterprise value relative to its earnings before interest, taxes, depreciation, and amortization. Furthermore, the free cash flow (FCF) yield is extremely low at 0.59%. This is a critical measure as it shows how much cash the company generates relative to its market valuation. A low FCF yield implies that very little cash is available to pay down debt, buy back shares, or pay dividends, making the stock less attractive on a cash generation basis.
The stock trades at a notable P/E discount to its direct peer group and the broader industry average, suggesting a potentially attractive valuation on a relative basis.
Moog's trailing P/E of approximately 31.4x is significantly lower than its peer average, which is cited as being as high as 89.7x, and also below the US Aerospace & Defense industry average of around 36-41x. This indicates that, compared to other companies in its sector, Moog is valued more conservatively on an earnings basis. While its EV/EBITDA of 16.24 is above some M&A benchmarks, the discount on the P/E multiple is a strong positive signal. This relative cheapness could attract investors looking for value within the aerospace and defense sector.
The forward P/E ratio is reasonable given expected earnings growth, and it trades at a discount to the broader aerospace and defense industry average P/E.
Moog's trailing P/E ratio of 31.43 appears high. However, this is below the reported industry average, which stands between 35x and 42x. The more important metric is the forward P/E ratio of 22.35, which suggests a significant increase in earnings is anticipated. This forward multiple is much more reasonable and indicates that the stock may not be as expensive as the trailing P/E suggests if the company meets its earnings targets. The PEG ratio of 1.28 (based on current data) is slightly above 1, suggesting the price is somewhat high relative to its growth, but still within a reasonable range for a quality industrial company.
The stock's valuation based on its sales and book value is not compelling, as both Price-to-Book and EV-to-Sales ratios are at levels that do not suggest undervaluation.
Moog's Price-to-Book (P/B) ratio of 3.35 indicates that investors are paying over three times the company's net asset value as stated on its balance sheet. While this is not extreme for a profitable industrial company, it doesn't signal a bargain from an asset perspective. The EV/Sales ratio is 2.08, which is also a fair but not cheap multiple. For comparison, median EV/Revenue multiples for the A&D industry have been around 1.5x to 1.7x historically. These metrics suggest the company is valued more on its future earnings potential than on its current asset or sales base, reinforcing the conclusion that it is not undervalued on these measures.
A primary risk for Moog is its significant dependence on government spending, particularly from the U.S. Department of Defense. While current global conflicts have boosted defense budgets, this trend may not be permanent. Future shifts in political priorities, fiscal tightening, or a de-escalation of global tensions could lead to reduced or delayed funding for key programs Moog supplies, directly impacting its Space and Defense segment revenues. Furthermore, the company is exposed to macroeconomic headwinds. A broad economic downturn would dampen demand in its Industrial Systems segment and, more critically, could trigger a sharp contraction in air travel, causing airlines to cancel or postpone new aircraft orders.
In the commercial aerospace sector, Moog's fortunes are closely tied to a small number of key customers, most notably Boeing and Airbus. This concentration creates a significant vulnerability, as highlighted by Boeing's recent and ongoing production and quality control challenges. Any slowdown in production rates for major platforms like the 737 MAX or 787 has a direct negative effect on Moog's sales and revenue forecasts. Beyond this customer-specific risk, the entire industry faces intense competitive pressure. Moog must compete with larger, better-capitalized rivals like Parker Hannifin and Honeywell, requiring continuous and substantial investment in research and development to win contracts for next-generation, more-electric aircraft. Failing to secure a strong position on these future platforms could threaten its market share in the long run.
Operationally, Moog remains vulnerable to supply chain disruptions and cost inflation. The company relies on a global network of suppliers for specialized materials and electronic components, and any geopolitical or logistical bottleneck can cause costly production delays. This risk is magnified by the nature of its long-term, fixed-price contracts. Under these agreements, Moog often bears the financial burden of unexpected increases in labor or material costs, which can significantly erode profitability on major projects. While the company's balance sheet is currently manageable, the combination of high capital expenditure requirements and the potential for cost overruns on complex development programs creates a persistent risk to its cash flow and financial flexibility.
Click a section to jump