Bull of the Day: Astronics (ATRO)

Core Viewpoint - Astronics (ATRO) is identified as a strong buy with a Zacks Rank of 1, showcasing a D for Value and an A for Growth, indicating a favorable growth outlook despite valuation concerns [1] Company Overview - Astronics Corp. specializes in electrical power generation and distribution systems, including motion systems, lighting, safety systems, avionics products, and aircraft structures, operating through Aerospace and Test Systems segments [2] Earnings Performance - Astronics has consistently exceeded the Zacks Consensus Estimate for the last four quarters, with the latest EPS reported at $0.49 against an estimate of $0.42, resulting in a 16.6% positive earnings surprise [4] - The average positive surprise over the last four quarters stands at 59% [4] Earnings Estimates Revisions - Earnings estimates for Astronics have been revised upwards, with the full year 2025 estimate increasing from $1.60 to $1.78 and the 2026 estimate rising from $2.12 to $2.43 over the past 60 days [5] Growth Projections - Revenue for the current fiscal year is projected at $857 million, reflecting a 7.7% growth, while the next fiscal year anticipates revenue of $980 million, indicating a 14.4% sales growth [6] Valuation Insights - The price-to-book ratio is noted at 16x, which is considered high for a business model that is not asset-light, while the forward PE ratio is at 27x, justified by the expected growth [7] - The price-to-sales ratio is at 2x, attributed to previous low topline growth, which is expected to improve [7] Margin Analysis - Operating margins have shown improvement, increasing from 5.8% to 7.2% and then to 8% over the last three quarters, suggesting that revenue growth combined with margin expansion will lead to higher earnings [8]