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TAT Technologies Stock Surges 40% in the Past 3 Months: Should You Buy?
TAT TechnologiesTAT Technologies(US:TATT) ZACKSยท2025-09-15 15:06

Core Insights - TAT Technologies Ltd. (TATT) shares have increased by 39.7% over the past three months, outperforming the Zacks Aerospace-Defense Equipment industry growth of 6.1%, the Aerospace sector's growth of 7.2%, and the S&P 500's rise of 10.4% [1][9] - The company's strong quarterly results and new contract wins have been key drivers of this stock performance [4][5] Financial Performance - TATT reported adjusted earnings of 30 cents per share for Q2, a 20% increase year-over-year, with net sales of $43.1 million, reflecting an 18% year-over-year growth [5][9] - The company's backlog increased by $85 million to reach $524 million, indicating strong future revenue potential [10][9] Contract Wins - In August, TATT secured a $12 million contract to provide MRO services for the GTCP331-500 Auxiliary Power Unit on Boeing 777 aircraft, enhancing its position in the global APU market [6][9] Growth Prospects - TATT has a strong balance sheet with $43 million in cash and cash equivalents, $2 million in current debt, and $10 million in long-term debt, providing flexibility for future growth and potential acquisitions [7] - The Zacks Consensus Estimate predicts a 16.8% revenue growth for 2025 and a 45% increase in earnings, with similar improvements expected for 2026 [12][14] Industry Position - TATT's trailing 12-month Price/Book (P/B TTM) ratio is 2.78X, significantly lower than the industry's average of 16.41X, indicating a potential undervaluation [17] - The company's Return on Equity (ROE) stands at 10.90%, above the industry average of 9.31%, suggesting effective use of shareholders' equity [22] Challenges - TATT faces industry-specific challenges, including supply-chain disruptions and rising raw material costs, which could impact delivery and margins [15] - Geopolitical risks related to operations in Israel may create uncertainties for business activities [16] Conclusion - TAT Technologies is positioned for long-term growth, supported by rising earnings, strong cash reserves, and a growing backlog, despite facing near-term challenges [23]