Key Takeaways ATI approved a new $500M multi-year share repurchase program. ATI cites strong aerospace and defense demand and strong financials backing the move. ATI maintains disciplined capital allocation, balancing investments with shareholder returns. ATI Inc. (ATI) recently announced a new multi-year share repurchase program, authorizing it to buy back up to $500 million of its outstanding common stock. The program is in combination with the currently $120 million remaining from ATI’s prior authorizati ...

Astronics Corporation Q4 2025 Earnings Call Summary - Moby Strategic Performance Drivers Record Q4 revenue of $240,000,000 was driven by strong market conditions across all business segments and solid operational execution. Operating margins reached post-pandemic records of 14.8% due to high sales volume, favorable product mix, and the realization of 2025 pricing initiatives. Aerospace segment performance benefited from a surge in aircraft spares and a 'rising tide' of demand across both linefit and ...

The company also reported improved profitability in the quarter. Gundermann said operating income margin was 14.8% and adjusted EBITDA was 19% , which he called post-pandemic records. Astronics generated $27.6 million in cash from operations in the quarter and ended the period with $231 million of available liquidity after completing a planned transition from an asset-based lending facility to a cash flow-based revolving credit facility.Chairman, President and CEO Peter Gundermann said fourth-quarter revenu ...

Core Viewpoint - BWX Technologies, Inc. (BWXT) is expected to report its fourth-quarter 2025 results on February 23, 2026, with a prior earnings surprise of 20.91% in the last quarter [1] Group 1: Factors Affecting Q4 Results - Increased uranium processing, downblending operations, and higher manufacturing volume of nuclear components for U.S. government programs are anticipated to enhance the top-line performance of BWXT's Government Operations segment [2] - The Commercial Operations segment is expected to see revenue growth driven by higher revenues from components manufacturing and contributions from the Kinectrics acquisition [3] Group 2: Q4 Estimates - The Zacks Consensus Estimate for BWXT's fourth-quarter sales is $829.3 million, reflecting an 11.1% increase from the previous year [4] - The consensus estimate for earnings is 91 cents per share, indicating a year-over-year decline of 1.1% [4] Group 3: Earnings Prediction Model - The current model does not predict an earnings beat for BWX Technologies, as it has an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy) [5]

Core Viewpoint - Kratos Defense & Security Solutions (KTOS) is anticipated to report fourth-quarter 2025 results on February 23, with earnings expected to grow by 7.69% year-over-year and revenues projected to increase by 15.95% from the previous year [1][7]. Financial Estimates - The Zacks Consensus Estimate for earnings is set at 14 cents per share for Q4 2025, with a revenue estimate of $328.25 million [1][2]. - Year-over-year growth estimates for earnings and revenues are 7.69% and 15.95%, respectively [1][2]. - The earnings estimates for the current year (2025) and next year (2026) are $0.51 and $0.73 per share, indicating growth of 4.08% and 41.92% respectively [2]. Earnings Surprise History - Kratos has consistently beaten earnings estimates in the last four quarters, with an average surprise of 29.17% [3][4]. Growth Drivers - The company is expected to benefit from increased target drone production and expanded maintenance, repair, and overhaul (MRO) capacity [7][10]. - New facilities in the U.S. and Jerusalem are anticipated to enhance engine, microwave, and RF production, thereby improving efficiency and revenue [7][12][13]. Stock Performance - Over the past three months, KTOS stock has returned 30.9%, outperforming the industry growth of 16.1% [14]. - The stock is currently trading at a discount compared to its industry on a forward 12-month price-to-sales (P/S) basis [17]. Investment Thesis - Kratos is recognized as a leading provider of unmanned aerial target drones, with a strong reputation and technology that supports consistent contract wins and global expansion [20]. - The Valkyrie UAS is becoming a core platform in the U.S. Marine Corps' Collaborative Combat Aircraft program, enhancing cash flow visibility and long-term growth prospects [21]. Challenges - The company faces supply-chain challenges due to raw material shortages, which may impact operations [24].

Core Viewpoint - Astronics is positioned for significant revenue growth, targeting nearly $1 billion in revenue for the current year, with expectations of 10%-15% growth and improved financial results in 2026, driven by key military and aerospace programs [2][4]. Revenue and Growth Projections - The company reported a revenue low of approximately $445 million in 2021, with an average growth rate of about 18% projected through 2025, tapering to around 8% in 2025 as it refines its cost structure [1] - Management anticipates fourth-quarter revenue to be a record, with expectations of results "much closer to 230" million, ultimately reaching "240" million [1][2] Business Segments and Market Exposure - Astronics operates primarily in the aerospace sector, with roughly 90% of its revenue derived from aerospace and the remaining 10% from its Test segment [3] - The business mix includes approximately 70% commercial transport, 10% military, 10% business jet, and 10% test, highlighting the company's significant exposure to commercial aviation [3] Key Growth Catalysts - Major catalysts include the military FLRAA electrical-distribution program, estimated at $1 million per shipset with a potential of 1,000-2,000 aircraft, and a U.S. Army radio test program valued at $215 million, expected to contribute $40-$50 million in annual revenue starting in H1 2026 [5][14][16] Operational Improvements - About 75% of revenue is expected to ship within a year, with improved lead times attributed to better supply chain conditions, particularly in electronics from Asia [6] - The company has a record backlog, which is notable given the reduction in lead times, indicating strong demand [6] Cabin Electronics and Connectivity - Approximately half of Astronics' business is related to in-flight entertainment and connectivity, working with over 200 airlines and major connectivity providers [7] - The company emphasizes the rapid turnover of cabin technology, creating recurring retrofit opportunities as airlines upgrade to keep pace with consumer electronics [8] Military and Test Segment Developments - The Test segment, valued at $70-$80 million, is now contributing positively after cost reductions, with a focus on a U.S. Army radio test program expected to begin in 2026 [16] - Astronics is transitioning from business jets to military programs, particularly through the FLRAA initiative, which is seen as a major opportunity for growth [14][15] Financial Strategies and Balance Sheet Management - The company recently refinanced its convertible notes, issuing a $225 million 0% convertible note to reduce potential dilution and lower its average cost of debt [18] - Management is focused on strengthening the balance sheet and has entered a new revolving credit facility with a higher limit [19]

Market Performance - Wall Street has shown mixed performance in 2026, with small-cap stocks outperforming large-cap stocks; S&P 500 gained 1.1%, Dow Jones rose 3.6%, Nasdaq Composite slipped 0.9%, while Russell 2000 surged 6.5% [1] Macro Environment - Major developments impacting markets include heightened geopolitical tensions, fluctuations in the U.S. dollar, disruptions from a winter storm, and the nomination of Kevin Warsh as the next Federal Reserve chair [2] Geopolitical Risks - Geopolitical uncertainty has increased due to U.S. actions involving Venezuela, renewed tensions with Iran, and policy disputes with European allies, benefiting small-cap stocks that generate most revenues domestically [3] Currency Impact - The U.S. dollar strengthened following Warsh's nomination, which supports smaller companies with limited foreign exposure and reduces currency translation risks, while large-cap companies may face challenges [4] Earnings Outlook - Small-cap earnings are recovering, with the S&P SmallCap 600 index projected to return to positive growth in 2025, expecting double-digit earnings expansion over the next two years [5] Sector Performance - The finance sector of the small-cap index S&P 600 is expected to see earnings growth of 26.7% in Q4 2025 and 33.9% in Q1 2026, driven by revenue growth of 9.6% and 8.2% respectively [7] - The aerospace sector is projected to log earnings growth of 48.7% in Q4 2025 and 40.1% in Q1 2026, supported by revenue increases of 17% and 12.3% respectively [11] - The industrials sector is expected to record earnings growth of 9.5% in Q4 2025 and 9% in Q1 2026, with revenue growth projected at 5.7% and 3.6% respectively [13] Investment Opportunities - Invesco S&P SmallCap Financials ETF (PSCF) is up 4% this year, while Peoples Bancorp Inc (PEBO) has increased by 13.4% [8] - U.S. Global Technology and Aerospace & Defense ETF (WAR) is up 4.8%, and Astronics (ATRO) has risen by 35.3% [12] - Invesco S&P SmallCap Industrials ETF (PSCI) is up 15.3%, and Proto Labs (PRLB) has increased by 30.8% [14]

Core Insights - AeroVironment, Inc. (AVAV) stock has declined by 16.4% over the past three months, underperforming the Zacks Aerospace-Defense Equipment industry's growth of 11.1% and the broader Zacks Aerospace sector's gain of 7% [2][8] - Competitors such as Rocket Lab USA, Inc. (RKLB) and Astronics Corporation (ATRO) have shown strong performance, with stock increases of 48% and 62.1%, respectively, during the same period [3][8] - Despite the stock's decline, AeroVironment has secured new defense contracts and anticipates strong sales growth, although it currently trades at a premium valuation [8][19] Industry Performance - The aerospace industry has seen varied performance, with some companies like RKLB and ATRO outperforming AVAV significantly [2][3] - Industry-wide challenges such as labor shortages and supply-chain disruptions are affecting production and financial performance across the sector [5][6] Company Challenges - AeroVironment faces persistent labor shortages that may limit workforce availability, potentially slowing production rates and increasing costs [5] - Supply-chain disruptions are leading to longer lead times and higher procurement costs, which could pressure margins and complicate production planning [6] Growth Prospects - AeroVironment is expanding its defense business through new contracts, including a $75 million task order awarded by the U.S. Air Force [9] - The company is also enhancing its presence in advanced airspace operations, indicating progress in autonomous and advanced air mobility [10] Financial Estimates - The Zacks Consensus Estimate for AVAV's fiscal 2026 sales indicates a year-over-year growth of 143.4%, with fiscal 2027 sales expected to improve by 17.5% [11] - Earnings estimates for fiscal 2026 and 2027 suggest year-over-year improvements of 5.5% and 34.4%, respectively [12][13] Valuation Metrics - AeroVironment's forward 12-month price-to-earnings (P/E) ratio is 62.43X, which is higher than the industry average of 47.26X, indicating a premium valuation [14] - The company's return on equity stands at 3.42%, significantly below the sub-industry average of 13.22%, suggesting less efficiency in converting equity into profits compared to peers [16] Liquidity Position - AeroVironment has a current ratio of 5.08, indicating sufficient capital to meet short-term debt obligations, which is favorable compared to peers [18]

Core Insights - ATI Inc. reported a profit of $96.6 million or 69 cents per share for Q4 2025, a decrease from $137.1 million or 94 cents in the same quarter last year. Adjusted earnings were 93 cents, an 18% increase from 79 cents year-over-year, surpassing the Zacks Consensus Estimate of 89 cents [1][8]. Financial Performance - The company's net sales for Q4 were $1,177.1 million, falling short of the Zacks Consensus Estimate of $1,197.7 million, and were essentially flat year-over-year [2]. - High-Performance Materials & Components (HPMC) segment reported sales of $645.9 million, up 2% year-over-year but below the consensus estimate of $656 million. HPMC's EBITDA increased by 22.23% year-over-year to $155 million [3]. - Advanced Alloys & Solutions (AA&S) segment recorded sales of $531.2 million, down approximately 1.4% from $538.5 million in the prior year, missing the consensus estimate of $543 million. The segment's EBITDA for the quarter was $98.5 million, up 12% year-over-year [4]. - Cash and cash equivalents totaled $416.7 million, a decrease of 42.2% year-over-year, while long-term debt rose to $1,718.3 million, up 0.2% from the previous year [5]. Future Outlook - For Q1 2026, adjusted EBITDA is expected to be between $216 million and $226 million, with full-year guidance set at $975 million to $1,025 million. Adjusted earnings per share are projected to be between 83-89 cents for Q1 and $3.99 to $4.27 for the full year. Adjusted free cash flow for the year is estimated to be between $430 million and $490 million [6]. Stock Performance - ATI's shares have increased by 101.5% over the past year, significantly outperforming the industry average increase of 36.8% [7].

Company Performance - Moog (MOG.A) has seen a significant increase in its stock price, rising 22.2% over the past month and reaching a new 52-week high of $307.86 [1] - Year-to-date, Moog's stock has gained 25.4%, outperforming the Zacks Aerospace sector's 39.3% and the Aerospace - Defense Equipment industry's 43.8% [1] Earnings and Revenue Expectations - Moog has consistently exceeded earnings expectations, beating the Zacks Consensus Estimate in the last four quarters, with the latest EPS reported at $2.63 against a consensus of $2.24 [2] - For the current fiscal year, Moog is projected to earn $9.95 per share on revenues of $4.2 billion, reflecting a 14.5% increase in EPS and an 8.6% increase in revenues [3] - The next fiscal year forecasts earnings of $11.4 per share on revenues of $4.38 billion, indicating a year-over-year change of 14.54% in EPS and 4.33% in revenues [3] Valuation Metrics - Moog's current valuation metrics show a Price-to-Earnings (P/E) ratio of 30.7X for the current fiscal year, below the peer industry average of 36.8X [6] - On a trailing cash flow basis, Moog trades at 25.3X compared to the peer group's average of 33.7X, suggesting it is not among the top value stocks [6] Zacks Rank and Style Scores - Moog holds a Zacks Rank of 2 (Buy), supported by rising earnings estimates, which aligns with the recommendation for investors to select stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [7] - The company has a Value Score of C, a Growth Score of A, and a Momentum Score of D, resulting in a VGM Score of A [6] Industry Context - The Aerospace - Defense Equipment industry is performing well, ranking in the top 26% of all industries, providing favorable conditions for both Moog and its peers [10] - Astronics Corporation (ATRO), a competitor, has a Zacks Rank of 1 (Strong Buy) and has shown strong earnings performance, indicating a competitive landscape [8][9]