Investment Research report

Aerojet Rocketdyne Holdings, Inc.

NYSE:
ajrd
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Aerojet Rocketdyne Holdings, Inc.
Ready, Aim, Blow-Up
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Research Overview

INDEX:
S&P 500
Sector:
Industrials
Position:
Short
Date:
Apr 9, 2019

After conducting a forensic financial and accounting review, Spruce Point believes Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD), a space and defense company, is facing fundamental pressures, masked by complicated and aggressive accounting, which gives investors a potentially misleading impression of stability and growth. Based on our investigation, we estimate 40% to 60% downside risk, or $13 - $20 per share.

The report highlights several key concerns with the company, including:

  • We find significant headwinds in both aerospace and defense segments
  • Evidence of an aggressive accounting obfuscating slowdown
  • We believe the Company’s current valuation fails to account for significant liabilities
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