ATI (ATI) AI Stock Analysis

• Market Cap: $9.39B
• Dividend Yield: N/A
• Average Volume (3M): 2.87M
• Price to Earnings (P/E): 24.1
• Beta (1Y): 1.71
• Revenue Growth: 6.82%
• EPS Growth: 3.49%
• Country: US
• Employees: 7,800
• Sector: Industrials
• Sector Strength: 78
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 2.76
• Shares Outstanding: 141,060,900
• 10 Day Avg. Volume: 2,275,574
• 30 Day Avg. Volume: 2,874,727
• PEG Ratio: 6.91
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 10.50
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $73.38
• Price Target Upside: 10.23% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

ATI's overall stock score is driven by its robust financial performance and positive earnings call sentiment, which highlight strong revenue growth, improved profitability, and strategic initiatives. However, the technical indicators suggest a potential overbought condition, and the high P/E ratio raises valuation concerns. Despite these factors, the company's strong position in aerospace and defense markets provides a solid foundation for future growth.

Positive Factors

Contracts and Sales

ATI signed a 5-year, $1B Airbus contract that will double ATI's C26 Airbus sales compared to C25.

Guidance and Growth

The record MRO backlogs support ATI's FY25 guidance, which is considered beatable, suggesting potential for exceeding expectations.

Market Demand

Demand signals improved in Q4, indicating potential for a higher price target.

Negative Factors

Labor Relations

ATI announced that its Specialty Rolled Products employees in Western PA and Lockport, NY, and the United Steelworkers failed to ratify a labor agreement.

Production Challenges

Commercial airframe products sales improved 6% quarter over quarter but fell 5% year over year, largely due to the Boeing work stoppage and consequentially lower production rates.

Stock Performance

ATI's stock has lagged CRS significantly and recent operating issues may limit upward re-rating potential.

ATI Business Overview & Revenue Model

Company Description

ATI Inc. manufactures and sells specialty materials and components worldwide. The company operates in two segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). The HPMC segment produces various materials, including titanium and titanium-based alloys, nickel- and cobalt-based alloys and superalloys, advanced powder alloys and other specialty materials, in long product forms, such as ingot, billet, bar, rod, wire, shapes and rectangles, and seamless tubes, as well as precision forgings, components, and machined parts. The segment serves aerospace and defense, medical, and energy markets. The AA&S segment produces zirconium and related alloys, including hafnium and niobium, nickel-based alloys, titanium and titanium-based alloys, and specialty alloys in a variety of forms, such as plate, sheet, and precision rolled strip products. It also provides hot-rolling conversion services, including carbon steel products, and titanium products. This segment offers its solutions to the energy, aerospace and defense, automotive, and electronics markets. The company was formerly known as Allegheny Technologies Incorporated. ATI Inc. was founded in 1960 and is headquartered in Dallas, Texas.

How the Company Makes Money

ATI 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 demonstrates solid financial health across all verticals. The company is experiencing steady revenue growth with improving profitability margins, maintaining a balanced capital structure with moderate leverage, and showcasing strong cash flow generation. These factors collectively highlight ATI's stable and promising financial position in the manufacturing sector.

Income Statement

ATI has shown a strong increase in revenue over the years, with the latest TTM revenue up by 2.3% compared to the previous year, indicating robust growth. Gross Profit Margin has been stable around 21%, and the Net Profit Margin has improved significantly to 8.9% in TTM, reflecting enhanced profitability. The EBIT and EBITDA Margins have also shown positive trends, highlighting efficient operations.

Balance Sheet

ATI maintains a healthy balance sheet with a Debt-to-Equity Ratio of approximately 1.01, reflecting moderate leverage. The Return on Equity (ROE) has improved substantially to 21.3% in TTM, indicating effective use of equity to generate profits. The Equity Ratio is stable at around 36%, showing a balanced capital structure.

Cash Flow

Free Cash Flow has seen a remarkable growth of 97.9% from the previous year, underscoring strong cash generation capabilities. Operating Cash Flow to Net Income Ratio is at 1.27, indicating robust cash flow generation relative to net income. The Free Cash Flow to Net Income Ratio of 0.83 further emphasizes strong cash flow performance.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.36B	4.17B	3.84B	2.80B	2.98B
	Gross Profit
898.20M	802.60M	714.20M	333.20M	292.80M
	EBIT
608.90M	466.40M	287.30M	161.70M	28.50M
	EBITDA
608.90M	547.10M	599.30M	260.80M	-1.30B
	Net Income Common Stockholders
367.80M	410.80M	130.90M	-16.20M	-1.56B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
721.20M	743.90M	584.00M	687.70M	645.90M
	Total Assets
5.23B	4.99B	4.45B	4.29B	4.03B
	Total Debt
1.90B	2.18B	1.75B	1.84B	1.57B
	Net Debt
1.17B	1.44B	1.16B	1.16B	921.90M
	Total Liabilities
3.28B	3.50B	3.29B	3.45B	3.39B
	Stockholders Equity
1.85B	1.37B	1.05B	685.60M	521.10M
Cash Flow		Free Cash Flow
168.10M	-114.80M	94.00M	-136.50M	30.40M
	Operating Cash Flow
407.20M	85.90M	224.90M	16.10M	166.90M
	Investing Cash Flow
-159.60M	-193.20M	-126.70M	-77.30M	-128.70M
	Financing Cash Flow
-260.40M	267.20M	-201.90M	103.00M	116.90M

ATI Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 66.57
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATI, the sentiment is Positive. The current price of 66.57 is above the 20-day moving average (MA) of 49.60, above the 50-day MA of 52.15, and above the 200-day MA of 58.33, indicating a bullish trend. The MACD of 2.35 indicates Negative momentum. The RSI at 76.47 is Negative, neither overbought nor oversold. The STOCH value of 97.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ATI.

ATI Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRS	80 Outperform	$8.54B	32.25	21.78%	0.40%	7.40%	168.67%
ESAB	80 Outperform	$7.17B	27.42	16.99%	0.25%	-1.22%	28.46%
ATI	76 Outperform	$9.39B	24.08	25.42%	―	6.82%	3.49%
MLI	75 Outperform	$8.36B	13.77	24.51%	1.16%	18.81%	10.05%
AZZ	70 Outperform	$2.71B	50.62	13.01%	0.78%	2.61%	-53.74%
WOR	66 Neutral	$2.60B	43.48	6.56%	1.31%	-69.82%	-78.10%
Sector *	64 Neutral	$4.28B	11.80	5.30%	250.74%	4.12%	-9.02%