Air Industries (US:AIRI) ZACKSยท2024-08-29 14:31Industry Overview - The Zacks Aerospace-Defense industry includes companies that design and manufacture commercial and military jets, helicopters, combat vehicles, missiles, and space transportation vehicles, among others [2] - The industry also encompasses cybersecurity firms providing IT services and C4ISR solutions, with revenue from defense contractors for spare parts and maintenance services [2] Key Trends - Improved air traffic outlook is boosting growth prospects, with global revenue-passenger kilometers (RPKs) increasing by 8% year-over-year in July 2024, and a projected 10.4% growth in global air passengers for 2024 [3] - The U.S. defense budget request for fiscal 2025 is $849.8 billion, reflecting a 1% increase from fiscal 2024, which is expected to benefit defense-focused companies [4] - Supply-chain issues continue to pose challenges, limiting aircraft deliveries and impacting the growth trajectory of the aerospace and defense industry [5][6] Market Performance - The Aerospace-Defense industry has underperformed compared to the Zacks S&P 500 composite and its own sector, with a collective loss of 1.1% over the past year, while the Aerospace sector grew by 6.7% and the S&P 500 increased by 24.9% [9] - The industry is currently trading at a trailing 12-month EV/Sales ratio of 2.37, compared to the S&P 500's 5.30 and the sector's 2.51 [10] Company Highlights - AIR Industries Group reported a 2.8% year-over-year increase in net sales and a 944.4% surge in operating income, with a Zacks Consensus Estimate for 2024 sales indicating a 7.1% improvement from 2023 [12] - Leidos Holdings secured a contract for missile warning capabilities, with a projected 5.4% increase in 2024 sales from 2023, and a long-term earnings growth rate of 12.5% [13] - Virgin Galactic's revenues doubled year-over-year, driven by commercial spaceflight and membership fees, with a Zacks Consensus Estimate for 2024 earnings showing improvement [15]