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ATI (ATI)
NYSE:ATI
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ATI
(NYSE:ATI)73Outperform
Positive Factors
Capacity Expansion
ATI has expanded its titanium melt capacity by 80%, benefiting from customer diversification away from Russia and preparing for increased demand in commercial aerospace.
Share Repurchase
ATI announced a $700 million share repurchase program, with $70 million worth of stock repurchased in 4Q24 and $590 million repurchase authorization remaining.
Negative Factors
Operational Challenges
Operational hurdles included two unexpected outages in late 3Q24, including a design flaw at an HPMC nickel melt shop and a water pump failure at the AA&S segment.
ATI (ATI) vs. S&P 500 (SPY)
Market Cap
$8.22B
Dividend YieldN/A
Average Volume (3M)1.74M
Price to Earnings (P/E)22.4
Beta (1Y)1.40
Revenue Growth4.51%
EPS Growth-2.90%
CountryUS
Employees7,300
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)2.55
Shares Outstanding142,166,930
10 Day Avg. Volume1,661,794
30 Day Avg. Volume1,735,671
Financial Highlights & Ratios
PEG Ratio0.81
Price to Book (P/B)N/A
Price to Sales (P/S)1.89
Price to Cash Flow (P/CF)5.40
P/FCF Ratio4.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$74.00Price Target Upside33.91% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
ATI Business Overview & Revenue Model
Company DescriptionATI Inc. is a global leader specializing in the engineering and manufacturing of high-performance materials and components. The company operates primarily in the aerospace and defense, oil and gas, and medical industries, providing advanced specialty materials and complex components. ATI's core products include titanium and nickel-based alloys, stainless steel, and advanced powder metallurgy, which are essential for high-performance applications.
How the Company Makes MoneyATI Inc. generates revenue through the production and sale of high-performance materials and components. Its key revenue streams include the sale of titanium and nickel-based alloys to aerospace manufacturers for aircraft components, supplying stainless steel and specialty materials to the oil and gas industry, and providing advanced materials for medical device manufacturers. Additionally, ATI partners with leading companies in its target industries to develop customized solutions, enhancing its market position and driving sales growth. The company's revenue is further bolstered by its focus on innovation and quality in its product offerings, ensuring a steady demand from industries requiring durable and reliable materials.
ATI Financial Statement Overview
Summary
ATI shows strong revenue growth and improved profitability with effective cost management. The balance sheet is stable with a moderate debt-to-equity ratio and improved return on equity. Cash flow management demonstrates strong generation despite some volatility.Income Statement
ATI has demonstrated strong revenue growth with a consistent increase over the years, highlighted by a revenue growth rate of 4.51% from 2023 to 2024. Gross profit margins have improved steadily, reaching 20.59% in 2024, indicating effective cost management. The net profit margin in 2024 stands at 8.43%, a significant improvement over previous years, showcasing enhanced profitability. The EBIT and EBITDA margins have also strengthened, reflecting the company's operational efficiency.85
Very Positive
Balance Sheet
ATI's balance sheet reflects a moderate debt-to-equity ratio of 1.02 in 2024, suggesting a balanced approach to leveraging. The return on equity improved to 19.87% in 2024, indicating effective use of equity capital. The equity ratio has gradually increased, reaching 35.39% in 2024, which suggests an improving financial position with a greater share of assets financed by equity.78
Positive
Cash Flow
ATI's cash flow analysis indicates a robust recovery, with free cash flow turning positive in 2024 after a negative figure in 2023. The operating cash flow to net income ratio improved to 1.11, demonstrating strong cash generation relative to net income. However, fluctuations in free cash flow highlight potential volatility in cash management.72
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.28B | 4.36B | 4.17B | 3.84B | 2.80B | 2.98B | Gross Profit |
| 549.40M | 898.20M | 802.60M | 714.20M | 333.20M | 292.80M | EBIT |
| 162.50M | 608.90M | 466.40M | 287.30M | 161.70M | 28.50M | EBITDA |
| 304.70M | 608.90M | 547.10M | 599.30M | 260.80M | -1.30B | Net Income Common Stockholders |
| 11.80M | 367.80M | 410.80M | 130.90M | -16.20M | -1.56B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 721.20M | 721.20M | 743.90M | 584.00M | 687.70M | 645.90M | Total Assets |
| 5.23B | 5.23B | 4.99B | 4.45B | 4.29B | 4.03B | Total Debt |
| 1.90B | 1.90B | 2.18B | 1.75B | 1.84B | 1.57B | Net Debt |
| 1.17B | 1.17B | 1.44B | 1.16B | 1.16B | 921.90M | Total Liabilities |
| 3.28B | 3.28B | 3.50B | 3.29B | 3.45B | 3.39B | Stockholders Equity |
| 1.85B | 1.85B | 1.37B | 1.05B | 685.60M | 521.10M |
| Cash Flow | Free Cash Flow | ||||
| -249.70M | 168.10M | -114.80M | 94.00M | -136.50M | 30.40M | Operating Cash Flow |
| -103.70M | 407.20M | 85.90M | 224.90M | 16.10M | 166.90M | Investing Cash Flow |
| -74.20M | -159.60M | -193.20M | -126.70M | -77.30M | -128.70M | Financing Cash Flow |
| -20.60M | -260.40M | 267.20M | -201.90M | 103.00M | 116.90M |
ATI Technical Analysis
Negative
55.26
Price Trends
58.13
Negative
58.33
Negative
59.72
Negative
Market Momentum
-0.76
Positive
39.46
Neutral
45.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATI, the sentiment is Negative. The current price of 55.26 is below the 20-day moving average (MA) of 59.15, below the 50-day MA of 58.13, and below the 200-day MA of 59.72, indicating a bearish trend. The MACD of -0.76 indicates Positive momentum. The RSI at 39.46 is Neutral, neither overbought nor oversold. The STOCH value of 45.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ATI.
ATI Risk Analysis
ATI disclosed 29 risk factors in its most recent earnings report. ATI reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ATI Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $10.16B | 38.41 | 16.82% | 0.43% | 5.65% | 84.17% | |
73 Outperform | $8.22B | 22.41 | 22.82% | ― | 4.51% | -2.90% | |
73 Outperform | $30.54B | 15.66 | 9.79% | 1.64% | -11.46% | -53.29% | |
73 Outperform | $52.77B | 46.33 | 26.89% | 0.24% | 11.90% | 52.65% | |
67 Neutral | $8.38B | 115.48 | 1.28% | 1.22% | 14.80% | 96.53% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
57 Neutral | $1.11B | 24.06 | 7.09% | 4.56% | -2.04% | -1.36% |
* Industrials Sector Average
Performance Comparison
ATI
ATI
55.26
4.63
9.14%
AA
Alcoa
32.84
3.33
11.28%
CRS
Carpenter Technology
180.28
112.77
167.04%
KALU
Kaiser Aluminum
68.75
-3.82
-5.26%
NUE
Nucor
133.72
-49.40
-26.98%
HWM
Howmet Aerospace
124.40
56.86
84.19%
ATI Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -4.66% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance with record revenue growth, significant free cash flow improvements, and robust demand in aerospace and defense markets. However, there were concerns about declining margins in certain segments and potential impacts from tariffs and revenue mix issues. Overall, the positive highlights outweigh the lowlights.Highlights
Record Revenue Growth
Revenue for the fourth quarter increased by 12% sequentially to $1.2 billion, with full-year 2024 revenue reaching nearly $4.4 billion, the highest since 2012 and up 5% year-over-year.
Strong Adjusted EBITDA Performance
Adjusted EBITDA for the fourth quarter was $210 million, surpassing the guided range of $181 million to $191 million. Full-year adjusted EBITDA was $729 million with margins approaching 17%.
Significant Free Cash Flow Increase
Free cash flow for 2024 was $248 million, marking an increase of over 50% compared to the previous year.
Growth in Aerospace and Defense Segments
Aerospace and defense revenue constituted more than 62% of the full-year revenue, with defense revenues up 22% year-over-year to $490 million.
Operational Improvements and AI Integration
The company has made significant investments in equipment reliability and AI technology, leading to record levels of production and operational efficiency.
Customer Commitments and Market Expansion
Announced $4 billion in new sales commitments, with expectations for increased defense spending potentially benefiting ATI's materials.
Lowlights
HPMC Margin Decline
High Performance Materials & Components (HPMC) margins declined by 230 basis points sequentially to 20%, due to charges related to customer negotiations and incentive compensation.
Potential Tariff Impacts
The company is monitoring potential tariffs on nickel from Canada and other materials from China, which could impact costs and supply chains.
Revenue Mix Issues
The revenue mix was weaker than anticipated due to short-term shifts in customer requirements, affecting overall profitability.
Company Guidance
During ATI's fourth quarter 2024 earnings call, the company provided robust financial guidance, highlighting a 12% sequential increase in quarterly revenue to $1.2 billion and adjusted EBITDA reaching $210 million, exceeding their guided range of $181 million to $191 million. For the full year, ATI reported nearly $4.4 billion in revenue—its highest since 2012—marking a 5% year-over-year increase. They also achieved an adjusted EBITDA of $729 million with margins nearing 17%. Free cash flow for 2024 was reported at $248 million, up over 50% from the previous year. For 2025, ATI forecasted adjusted EBITDA to surpass $800 million, anticipating growth driven by strong aerospace and defense demand, as well as increased production capacity, notably in isothermal forgings and differentiated nickel products. The company also outlined expectations for a 50% increase in sales from the GTF engine overhaul program and projected 2025 free cash flow between $240 million and $360 million, with capital investment set at $260 million to $280 million.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.