Core Insights - Rising global air passenger traffic and an ageing aircraft base are driving growth in aircraft fleet sizes and increasing demand for aftermarket services, benefiting aerospace service stocks like Astronics Corporation (ATRO) and HEICO Corporation (HEI) [1][19] - Higher global defense spending due to geopolitical tensions is boosting demand for advanced avionics, electronics, and power systems used in military aircraft supplied by these companies [1] Group 1: Company Performance - Astronics reported a revenue growth of 3.8% and a 44% increase in net adjusted earnings for Q3 2025 compared to the previous year [4][10] - The Aerospace segment of Astronics generated sales of $192.7 million, up nearly 8.5% year over year, driven by increased demand for cabin power products and military orders [5][10] - HEICO reported a revenue growth of 19.3% and a 34.3% increase in earnings per share for Q4 fiscal 2025 compared to the previous year [8][10] Group 2: Acquisitions and Strategic Moves - Astronics expanded its aviation portfolio by acquiring Buhler Motor Aviation, enhancing its seat actuation offerings and technical expertise [6][7] - HEICO's Flight Support Group subsidiary, Wencor Group, announced an agreement to acquire EthosEnergy Accessories and Components, which is expected to strengthen HEICO's aftermarket repair capabilities [9][11] Group 3: Financial Metrics and Valuation - The Zacks Consensus Estimate for ATRO's 2025 sales and EPS implies improvements of 7.7% and 67% respectively from the previous year [12] - ATRO's forward 12-month price/earnings (P/E F12M) ratio is 22.42X, lower than HEI's 59.68X, indicating a more attractive valuation for Astronics [17] - ATRO has a Return on Equity (ROE) of 29.65%, outperforming HEI's 17.18%, showcasing better efficiency in generating profits from equity [18] Group 4: Market Position and Outlook - Both companies are well-positioned for revenue and earnings growth, but Astronics stands out in terms of valuation and profitability metrics, making it a more attractive choice for investors [22]