Should You Add ATRO Stock to Your Portfolio Pre-Q1 Earnings Release?

Core Viewpoint - Astronics Corporation (ATRO) is expected to report first-quarter 2025 results on May 6, with revenue estimates indicating growth and a significant improvement in earnings compared to the previous year [1][2]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for revenues is $190 million, reflecting a 2.7% increase from the same quarter last year [2]. - The consensus estimate for earnings is 25 cents per share, a notable recovery from a loss of 9 cents in the prior-year quarter, with a 19.1% upward revision in the last 60 days [2]. Segment Performance - The Aerospace unit is projected to drive sales growth, with first-quarter sales estimated at $171.8 million, a 5% increase year-over-year, supported by rising demand for cabin power and in-flight entertainment [5][6]. - Conversely, the Test Systems unit is expected to see a decline in sales, estimated at $18.2 million, down 15% from the previous year due to delays in the U.S. Army's radio test program [7]. Overall Company Performance - Approximately 90% of ATRO's total revenues come from the Aerospace segment, which is anticipated to enhance overall top-line performance [8]. - The company's shares have increased by 44.3% year-to-date, outperforming the Zacks Aerospace-Defense Equipment industry and the broader market [9]. Valuation Metrics - ATRO's forward 12-month price-to-earnings (P/E) ratio is 17.31X, which is lower than the peer group's average of 23.41X, indicating a potentially attractive valuation [10]. - Despite this, industry peers like Leonardo DRS and TransDigm Group are trading at higher P/E multiples of 35.62 and 35.37, respectively [14]. Growth Catalysts and Challenges - The expansion of global commercial air traffic is a significant growth driver for ATRO, with expectations for strong revenue and earnings growth in the first quarter [16]. - The company faces challenges such as supply-chain pressures, material availability, and rising labor costs, which could impact performance [15]. Investment Considerations - Given the favorable sales and earnings estimates, a strong Zacks Rank, and solid year-to-date stock performance, ATRO may be a compelling investment opportunity ahead of its earnings report [20].