# Vse (VSEC.US)

Canonical: https://gigainvestors.com/s/VSEC

Analysis as of: 2026-10-16T07:32:57.627Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $161.55 per share; close as of 2026-10-15.

Estimated value: low $28.69 per share, central $32.41 per share, high $37.36 per share. Buy at or below the central value $32.41 per share. Valuation as of 2026-10-16T07:32:57.627Z; scenarios are not confidence intervals.

Expected annual return: 4.3% at the stated quote. About 4.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 3 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 1

- Operating margin variation: 0.27×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.07×

- FY2017: 0.07×

- FY2018: 0.08×

- FY2019: 0.08×

- FY2020: 0.09×

- FY2021: 0.03×

- FY2022: 0.08×

- FY2023: 0.11×

- FY2024: 0.10×

- FY2025: 0.11×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 9.2%

- ROIC, second-lowest year: 7.4%

- Typical minus recent gross margin: -2.6 pp

- Typical gross margin (annual median): 8.6%

- Recent gross margin (lower of latest and 3-year median): 11.1%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.3%

- ROIC including acquisitions, ten-year median: 4.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 11.4%

- FY2017: 16.4%

- FY2018: 13.2%

- FY2019: 13.0%

- FY2020: 9.3%

- FY2021: 3.5%

- FY2022: 7.4%

- FY2023: 8.9%

- FY2024: 7.9%

- FY2025: 9.0%

### economics: fail

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 1.38×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $219M

- Net income, five-year total: $159M

- Return on incremental invested capital: 19.8%

- Working capital / revenue, annual change: 4.5 pp

- Working capital / revenue, change between three-year averages: 31.7 pp

- Working capital / revenue, final three-year average: 55.9%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 2.89×

- FY2022: 1.48×

- FY2023: 1.12×

- FY2024: 1.26×

- FY2025: 1.35×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 13.2% vs 8.9%

- Per-share earnings: 2.47 to 2.52 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 7.0%

- Ordinary dilution, 5-year annual growth: 14.0%

- Market cap gain: $3.6B

- Cumulative retained earnings: $164M

- Diluted shares, 10-year annual growth: 7.0%

- Diluted shares, 5-year annual growth: 14.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 0.2%

- Per-share value change: $0.04

- Per-share value, starting three-year median: $2.47

- Per-share value, ending three-year median: $2.52

- Buybacks concentrated in cheaper years (correlation): 0.43

- Average buyback yield: 0.2%

- Buyback history: 6 years

- Debt-funded buybacks: Yes

- Acquisition spending: $1.1B

- Cumulative net income, 10 years: $292M

- ROIC, first three-year median: 13.2%

- ROIC, last three-year median: 8.9%

Chart: Earnings per share; fiscal year observations.

- FY2016: $2.47

- FY2017: $3.60

- FY2018: $3.21

- FY2019: $3.35

- FY2020: -$0.47

- FY2021: $0.63

- FY2022: $2.19

- FY2023: $2.76

- FY2024: $1.70

- FY2025: $2.52

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: 1.3%

- Receivables to sales index (DSRI): 0.99×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 48.4%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.50×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.65×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.1%

- FY2017: -1.8%

- FY2018: 2.5%

- FY2019: 2.2%

- FY2020: -5.2%

- FY2021: 2.8%

- FY2022: 2.0%

- FY2023: 4.5%

- FY2024: 3.5%

- FY2025: 1.3%

## Holders

- [Henry Ellenbogen](https://gigainvestors.com/DCP): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 29% since Jun 2026 · "Why VSE (VSEC) Is Up 17.7% After Raising 2026 Revenue Guidance and Profitability Outlook" (finance.yahoo.com, Aug 2026) · sales +3%

Story as of 2026-10-16T09:59:49.597Z; price observation 2026-10-15.

Price needs cash profits to grow 22% a year for ten years

- 2026-08-07: Why VSE (VSEC) Is Up 17.7% After Raising 2026 Revenue Guidance and Profitability Outlook ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/why-vse-vsec-17-7-001722697.html))

### Sales · FY2024–2025

sales +3%; source https://www.sec.gov/Archives/edgar/data/102752/000010275226000015/vsec-20251231.htm; observed 2026-02-27.

- FY2016: $692M 

- FY2017: $760M 

- FY2018: $697M 

- FY2019: $753M 

- FY2020: $662M 

- FY2021: $751M 

- FY2022: $669M 

- FY2023: $860M 

- FY2024: $1.1B 

- FY2025: $1.1B 

### Gross margin · FY2025

gross margin 11.9%; source https://www.sec.gov/Archives/edgar/data/102752/000010275226000015/vsec-20251231.htm; observed 2026-02-27.

- FY2016: 8.4% 

- FY2017: 7.5% 

- FY2018: 8.1% 

- FY2019: 8.6% 

- FY2020: 8.7% 

- FY2021: 3.3% 

- FY2022: 8.6% 

- FY2023: 11.1% 

- FY2024: 10.0% 

- FY2025: 11.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in aerospace & defense; annual sales are USD 1.1 billion.

- Source: https://www.sec.gov/Archives/edgar/data/102752/000010275226000015/vsec-20251231.htm (filed 2026-02-27); FY2025: revenue 1112275000; grossProfit 132134999; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 10% to 11.9% during 2023–25; it earns 9.2% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: grossProfit / revenue = 11.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: grossProfit / revenue = 10%.

- Source: https://www.sec.gov/Archives/edgar/data/102752/000010275226000015/vsec-20251231.htm (filed 2026-02-27); FY2025: grossProfit / revenue = 11.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); 10-year return on capital observations [[2016,0.11441227407966606],[2017,0.16413909608257668],[2018,0.13248696084139866],[2019,0.12988771207981248],[2020,0.09285174600045991],[2021,0.03506535815115036],[2022,0.07402305704917053],[2023,0.08917713740697215],[2024,0.0793850724890826],[2025,0.09042763487666287]]; median 0.09163969043856139. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Earns 19.8% on new investment; paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2016: growth capex 0; upkeep 6546000; cash acquisitions 63000; owner earnings 46293000. Growth capex plus acquisitions / owner earnings = 0.0013608968958589852.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2017: growth capex 0; upkeep 3743000; cash acquisitions 0; owner earnings 61235000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2018: growth capex 0; upkeep 3117000; cash acquisitions 0; owner earnings 57187000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2019: growth capex 0; upkeep 9630000; cash acquisitions 113181000; owner earnings 54321000. Growth capex plus acquisitions / owner earnings = 2.083558844645717.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2020: growth capex 0; upkeep 4427000; cash acquisitions 0; owner earnings 14537000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2021: growth capex 0; upkeep 10520000; cash acquisitions 53336000; owner earnings 23046000. Growth capex plus acquisitions / owner earnings = 2.3143278660071163.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2022: growth capex 0; upkeep 11212000; cash acquisitions 0; owner earnings 41449000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: growth capex 0; upkeep 18666000; cash acquisitions 218581000; owner earnings 43884000. Growth capex plus acquisitions / owner earnings = 4.980881414638593.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: growth capex 0; upkeep 20704000; cash acquisitions 283122000; owner earnings 38581000. Growth capex plus acquisitions / owner earnings = 7.338378994842021.

- Source: https://www.sec.gov/Archives/edgar/data/102752/000010275226000015/vsec-20251231.htm (filed 2026-02-27); FY2025: growth capex 0; upkeep 21281000; cash acquisitions 394144000; owner earnings 72136000. Growth capex plus acquisitions / owner earnings = 5.463901519352334.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Incremental return on capital 0.19792618945924673, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Dividend observations: [[2016,2481000],[2017,2816000],[2018,3262000],[2019,3726000],[2020,3970000],[2021,4427000],[2022,5111000],[2023,5436000],[2024,7060000],[2025,8263000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 1.7% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); VSEC.US SharesStats.PercentInsiders = 1.7319999999999998 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 22% yearly over ten years; actual decline was 0.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Ten-year compound average after fade. Initial solved rate 0.3080952091091088. Price 161.55; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 3.6985261331180177 → FY2025 3.3964385232668. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $28.84 per share

- 2016-11: $38.71 per share

- 2016-12: $38.84 per share

- 2017-01: $37.28 per share

- 2017-02: $40.68 per share

- 2017-03: $40.80 per share

- 2017-04: $42.65 per share

- 2017-05: $41.84 per share

- 2017-06: $44.98 per share

- 2017-07: $51.85 per share

- 2017-08: $52.15 per share

- 2017-09: $56.86 per share

- 2017-10: $49.10 per share

- 2017-11: $47.77 per share

- 2017-12: $48.43 per share

- 2018-01: $49.55 per share

- 2018-02: $48.50 per share

- 2018-03: $51.72 per share

- 2018-04: $51.29 per share

- 2018-05: $49.41 per share

- 2018-06: $47.78 per share

- 2018-07: $43.10 per share

- 2018-08: $38.58 per share

- 2018-09: $33.13 per share

- 2018-10: $31.36 per share

- 2018-11: $29.13 per share

- 2018-12: $29.91 per share

- 2019-01: $32.63 per share

- 2019-02: $35.35 per share

- 2019-03: $31.58 per share

- 2019-04: $30.57 per share

- 2019-05: $24.11 per share

- 2019-06: $28.69 per share

- 2019-07: $29.96 per share

- 2019-08: $31.84 per share

- 2019-09: $34.09 per share

- 2019-10: $38.42 per share

- 2019-11: $40.79 per share

- 2019-12: $38.04 per share

- 2020-01: $31.11 per share

- 2020-02: $29.45 per share

- 2020-03: $16.39 per share

- 2020-04: $19.22 per share

- 2020-05: $26.00 per share

- 2020-06: $31.39 per share

- 2020-07: $28.13 per share

- 2020-08: $29.03 per share

- 2020-09: $30.64 per share

- 2020-10: $28.96 per share

- 2020-11: $34.20 per share

- 2020-12: $38.49 per share

- 2021-01: $34.60 per share

- 2021-02: $38.56 per share

- 2021-03: $39.50 per share

- 2021-04: $43.15 per share

- 2021-05: $47.57 per share

- 2021-06: $49.51 per share

- 2021-07: $50.05 per share

- 2021-08: $49.99 per share

- 2021-09: $48.17 per share

- 2021-10: $55.55 per share

- 2021-11: $54.74 per share

- 2021-12: $60.94 per share

- 2022-01: $51.58 per share

- 2022-02: $47.65 per share

- 2022-03: $46.09 per share

- 2022-04: $43.31 per share

- 2022-05: $38.86 per share

- 2022-06: $37.58 per share

- 2022-07: $41.95 per share

- 2022-08: $41.85 per share

- 2022-09: $35.40 per share

- 2022-10: $46.29 per share

- 2022-11: $49.04 per share

- 2022-12: $46.88 per share

- 2023-01: $54.90 per share

- 2023-02: $57.41 per share

- 2023-03: $44.90 per share

- 2023-04: $42.29 per share

- 2023-05: $47.03 per share

- 2023-06: $54.69 per share

- 2023-07: $53.75 per share

- 2023-08: $56.75 per share

- 2023-09: $50.44 per share

- 2023-10: $53.80 per share

- 2023-11: $60.43 per share

- 2023-12: $64.61 per share

- 2024-01: $62.11 per share

- 2024-02: $74.10 per share

- 2024-03: $80.00 per share

- 2024-04: $78.07 per share

- 2024-05: $81.86 per share

- 2024-06: $88.28 per share

- 2024-07: $88.99 per share

- 2024-08: $93.03 per share

- 2024-09: $82.73 per share

- 2024-10: $102.62 per share

- 2024-11: $117.26 per share

- 2024-12: $95.10 per share

- 2025-01: $102.35 per share

- 2025-02: $118.50 per share

- 2025-03: $119.99 per share

- 2025-04: $114.52 per share

- 2025-05: $130.09 per share

- 2025-06: $130.98 per share

- 2025-07: $156.54 per share

- 2025-08: $162.40 per share

- 2025-09: $166.24 per share

- 2025-10: $180.68 per share

- 2025-11: $180.19 per share

- 2025-12: $172.77 per share

- 2026-01: $218.57 per share

- 2026-02: $227.07 per share

- 2026-03: $184.40 per share

- 2026-04: $171.68 per share

- 2026-05: $185.15 per share

- 2026-06: $228.50 per share

- 2026-07: $194.39 per share

- 2026-08: $208.68 per share

- 2026-09: $164.70 per share

- 2026-10: $161.55 per share

## Annual estimated value (USD per share)

- FY2016: low $55.19 per share, central $66.62 per share, high $77.62 per share

- FY2017: low $62.04 per share, central $71.14 per share, high $82.65 per share

- FY2018: low $56.14 per share, central $63.88 per share, high $74.18 per share

- FY2019: low $55.65 per share, central $63.32 per share, high $73.54 per share

- FY2020: low $47.31 per share, central $53.83 per share, high $62.51 per share

- FY2021: low $46.89 per share, central $53.35 per share, high $61.96 per share

- FY2022: low $35.32 per share, central $40.19 per share, high $46.67 per share

- FY2023: low $33.82 per share, central $38.48 per share, high $44.68 per share

- FY2024: low $23.87 per share, central $27.11 per share, high $31.41 per share

- FY2025: low $31.41 per share, central $35.44 per share, high $40.79 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/102752/000010275226000015/vsec-20251231.htm); period 2025-12-31, filed 2026-02-27.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.