B. Riley revisits a best idea stock from BRS Conference after strong Q3 results

B. Riley Securities analyst Jeff Van Sinderen has reclassified VSE Corporation as a top pick from the BRS conference based on the company's impressive third-quarter earnings. Maintaining a Buy rating, Van Sinderen has set a price target of $265 for the stock. On November 4, VSE reported strong financials, with revenue reaching $541.0 million and adjusted EBITDA at $107.2 million.

These figures surpassed both analyst estimates and his own projections, reflecting robust year-over-year growth of 91.2% in revenue and 126.3% in adjusted EBITDA. Notably, VSE achieved a record adjusted EBITDA margin of 19.8%, a significant 310 basis points increase year-over-year and 65 basis points higher than the previous quarter.

Organic growth accelerated to about 17% from 14% in the prior quarter, largely driven by the commercial engine aftermarket segment. The acquisition of PAG and other recent deals also contributed to the company's success. Management raised full-year fiscal 2026 guidance, projecting revenue growth of 65% to 66.5%, up from the previous range of 61% to 64%.

Adjusted EBITDA margin guidance was also increased to 18.9% to 19.1%. Van Sinderen credited the margin expansion to a mix of higher-margin products, synergies from earlier acquisitions, and recent deals. The company's August 31 acquisition of Atech, which holds repair approvals for over 300 part numbers from Pratt & Whitney Canada platforms, further strengthens its proprietary content. VSE is set to host an investor day on December 9 to provide a multi-year outlook.