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ATI (ATI)
NYSE:ATI
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ATI
(NYSE:ATI)
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Rating:71Outperform
Price Target:
$135.00
▲(5.88% Upside)
The score is driven primarily by solid financial performance (strong margins and cash generation, despite leverage and cash-flow lumpiness) and supportive technical trends. This is tempered by a premium valuation (high P/E) even as the earnings call was notably constructive with upbeat 2026 guidance and continued margin/FCF expansion targets.
Positive Factors
Cash Generation and Capital Deployment
Consistent, sizable operating cash flow and positive free cash flow underpin ATI’s ability to fund capital projects, pay down debt, and return capital. This durable cash generation supports multi-year investments and shareholder returns, improving resilience across industry cycles.
Aerospace & Defense Mix and Contract Backing
A growing, contract-driven A&D revenue mix increases revenue visibility and typically yields higher margins. Persistent share gains in jet engines and missiles signal structural demand and durable customer relationships, strengthening long-term revenue stability and margin profile.
Proprietary Materials and Manufacturing Capabilities
Unique alloy expertise and specialized manufacturing (e.g., isothermal forging) create high technical barriers and close customer ties. These capabilities support pricing power, long-term contracts, and differentiated product offerings, reinforcing competitive advantage in high-value aerospace markets.
Negative Factors
Elevated Leverage
Meaningful leverage reduces financial flexibility if end-market demand softens or interest rates rise. While earnings and cash flow have improved, the debt burden can constrain strategic optionality, increase interest costs, and raise refinancing risk during adverse cycles.
Near-Term Capital Intensity
Substantial near-term capex to add specialized nickel capacity is necessary for growth but consumes cash and operational focus. Delivering targeted returns depends on execution and sustained demand; mis-timing or weaker markets could pressure free cash flow and competing priorities like debt reduction.
Production Complexity and Extended Lead Times
Long, variable melt and processing cycles limit throughput and make capacity additions lumpy. These structural production bottlenecks can delay revenue realization, increase working capital needs, and require phased, customer-funded investment to avoid chronic supply constraints.
ATI (ATI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.32B
Dividend YieldN/A
Average Volume (3M)1.20M
Price to Earnings (P/E)44.7
Beta (1Y)1.63
Revenue Growth7.75%
EPS Growth6.84%
CountryUS
Employees7,800
SectorIndustrials
Sector Strength72
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)0.93
Shares Outstanding135,863,660
10 Day Avg. Volume1,680,494
30 Day Avg. Volume1,196,524
Financial Highlights & Ratios
PEG Ratio11.09
Price to Book (P/B)8.81
Price to Sales (P/S)3.47
P/FCF Ratio47.66
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue4.10
Enterprise Value/Gross Profit18.48
Enterprise Value/Ebitda23.49
Forecast
1Y Price Target
$149.00Price Target Upside16.86% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
ATI Business Overview & Revenue Model
Company DescriptionATI 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 MoneyATI generates revenue through the sale of its specialty materials and components, focusing on high-value markets such as aerospace and defense, where demand for advanced materials is driven by technological innovation and regulatory standards. The company's revenue model is primarily based on direct sales to manufacturers and distributors in these sectors. Key revenue streams include contracts for large aerospace projects, sales of high-performance alloys, and supply agreements with major industry players. ATI also benefits from strategic partnerships with leading companies in aerospace and energy sectors, allowing it to secure long-term contracts and stabilize its revenue flow. Additionally, the company leverages its expertise in material science and engineering to offer customized solutions, further enhancing its market position and profitability.
ATI Earnings Call Summary
Earnings Call Date:Feb 03, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call showcased strong execution: multi-year transformation gains (margin expansion, record revenue since 2012), robust cash generation, meaningful share gains in aerospace & defense and specialty energy, and confident 2026 guidance backed by contract-secured investments. Challenges noted are largely operational timing, capacity constraints for specialized alloys, some end-market timing risk in airframes, and near-term capital intensity—each of which management outlined with mitigation plans (customer-funded projects, productivity improvements, phased capacity additions). Overall, positives substantially outweigh the highlighted risks.Q4-2025 Updates
Positive Updates
Strong Q4 Results
Q4 revenue of $1.2B and adjusted EBITDA of $232M (above the high end of guidance); adjusted EBITDA margin of 19.7%, up 180 basis points vs. Q4 2024.
Record Annual Performance
Full-year 2025 revenue of $4.6B (highest since 2012), up 5% year-over-year; adjusted EBITDA exceeded $859M, up 18% YoY; adjusted EPS $3.24, up 32% YoY.
Very Strong Cash Generation and Capital Deployment
Adjusted free cash flow of $380M, up 53% YoY; operating cash flow $614M, up >50% YoY; returned $470M to shareholders in 2025 (124% of free cash flow), repaid $150M debt in Q4 and repurchased $170M of shares during the year.
Confident 2026 Guidance
Full-year 2026 adjusted EBITDA guidance $975M–$1.025B (midpoint $1.0B, +16% YoY); adjusted EPS guidance $3.99–$4.27; adjusted free cash flow target $430M–$490M (midpoint $460M, +21% YoY).
Aerospace & Defense Outperformance
A&D drove results: full-year A&D revenue up 14% YoY; jet engine sales +21% YoY; missiles revenue +127% YoY; A&D mix increased to 68% of 2025 revenue (from 62% in 2024) and expected >70% in 2026.
Operational Improvements and Productivity Gains
Double-digit remelt output increases, significant downstream heat-treat cycle time reductions, increased equipment uptime, and managed working capital improved to 32.5% of sales in Q4.
Win of Critical Proprietary Capabilities
Now producing six of the seven most advanced jet-engine nickel alloys; isothermal forging deliveries to Pratt & Whitney grew 6x from 2023 to 2025; recent long-term specialty energy contract expanded ATI share by >20%.
Disciplined, Contract-Backed Capital Allocation
2026 gross CapEx guidance $280M–$300M with ~$60M customer funding (net $220M–$240M); targeted investments (new VIM and remelt equipment) expected to support ~ $350M incremental nickel revenue run rate by mid-2028, with project returns generally >30% and many customer co-funded.
Margin Expansion Track Record
Consolidated adjusted EBITDA margin 18.7% for full-year 2025 (up 200 bps YoY); HPMC full-year margin 23.6% (up 330 bps YoY) and Q4 HPMC margin ~24% (up ~400 bps YoY); 2026 margins targeted around 20% with further sequential expansion.
Negative Updates
First-Quarter Seasonality and Maintenance
Q1 2026 adjusted EBITDA guidance range of $216M–$226M reflects planned maintenance and seasonality, with first-half margins expected in the upper teens before improving in H2.
Extended Lead Times and Production Complexity
Lead times for proprietary materials have extended (some up to 2x vs. a quarter ago); exotic alloy melt times can be 3–4x longer than standard alloys, constraining throughput and requiring targeted capacity investments.
Airframe Demand Timing Risks
Airframe growth is expected mid- to upper-single digits in 2026 but weighted to the second half as OEM inventory normalization and production rate ramps remain uncertain; guidance is conservatively modeled against customer schedules rather than best-case ramp.
Declines in Non-Core End Markets
Company expects industrial, medical, and electronics revenue to trend down low- to mid-single digits in 2026 as capacity and focus are prioritized to higher-value A&D and specialty energy markets.
Backlog and Short-Term Visibility
Backlog is roughly one year of revenue (targeted level) and only up modestly (~3%); much customer demand is contract-driven with reserved capacity, limiting the visibility provided by transactional orders.
Capital Intensity and Near-Term Investment Needs
Gross CapEx planned at $280M–$300M in 2026 (net $220M–$240M after customer funding) to support specialized nickel capacity and remelt investments—necessary for growth but a near-term cash requirement.
Pricing and Raw Material Volatility
Markets for certain specialty alloys (e.g., hafnium) have seen significant moves; while pricing assumptions are included in 2026 guidance, volatility in exotic alloy pricing is an execution and margin risk if market dynamics change.
Company Guidance
ATI guided Q1 2026 adjusted EBITDA of $216–$226 million (EPS $0.83–$0.89; midpoint ≈ +14% vs Q1 2025) and full‑year adjusted EBITDA of $975 million–$1.025 billion (midpoint $1.0 billion, ≈ +16% YoY) with adjusted EPS $3.99–$4.27. They target adjusted free cash flow of $430–$490 million (midpoint $460M, $80M above 2025 / ≈ +21% YoY), gross CapEx of $280–$300 million with ~$60M of customer funding (net CapEx $220–$240M), aim to reduce managed working capital to ≤31% of sales, and expect no meaningful debt maturities until Dec 2027; $120M remains under the current share repurchase authorization to be completed in 2026. Margin guidance calls for consolidated full‑year margins around 20% (Q1 18.5–19%; H1 upper‑teens, H2 >20%), HPMC ≈25% and A&S in the upper‑teens, with average incremental margins ~40% (second half >40%), and planned nickel investments (new VIM) tied to a targeted ~$350M incremental nickel revenue run‑rate by mid‑2028.ATI Financial Statement Overview
Summary
Strong TTM profitability and improved operating performance (revenue +~9.6%, solid gross/operating/net margins) with robust operating cash flow and free cash flow. Offsetting factors are a still meaningfully levered balance sheet (debt-to-equity ~1.12) and historically volatile free cash flow across the cycle.Income Statement
Operating performance has strengthened meaningfully versus earlier years, with TTM (Trailing-Twelve-Months) revenue up ~9.6% and profitability solid (gross margin ~21.9%, operating margin ~14.0%, net margin ~9.7%). Margins have generally expanded from 2020–2022 levels, indicating improved pricing/mix and execution. Main weakness is some year-to-year volatility in profit (e.g., 2023 net income outpaced 2024 despite lower margins), and the business remains cyclical, which can pressure results in downturns.78
Positive
Balance Sheet
Leverage is moderate-to-elevated: TTM (Trailing-Twelve-Months) debt-to-equity is ~1.12 (improved from 2021–2022, but still meaningful). Equity has grown versus prior years, and returns on equity are strong (TTM ~24.8%), reflecting good earnings power. Key risk is continued reliance on debt financing (total debt ~1.75B vs. equity ~1.80B), which can limit flexibility if earnings soften or rates stay high.63
Positive
Cash Flow
Cash generation is currently strong, with TTM (Trailing-Twelve-Months) operating cash flow (~$614M) and free cash flow (~$489M) supporting reinvestment and balance sheet needs. Cash conversion is decent but not perfect: free cash flow is ~75% of net income, implying some working-capital/capex demands. The main weakness is volatility—free cash flow swung negative in 2021 and 2023, and TTM free cash flow growth is negative, suggesting sustainability should be watched across the cycle.69
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.59B | 4.36B | 4.17B | 3.84B | 2.80B |
| Gross Profit | 1.01B | 913.50M | 826.30M | 714.20M | 334.00M |
| EBITDA | 789.00M | 670.70M | 539.10M | 678.50M | 492.50M |
| Net Income | 404.30M | 367.80M | 410.80M | 323.50M | 184.60M |
Balance Sheet | |||||
| Total Assets | 5.10B | 5.23B | 4.99B | 4.45B | 4.29B |
| Cash, Cash Equivalents and Short-Term Investments | 416.70M | 721.20M | 743.90M | 584.00M | 687.70M |
| Total Debt | 1.75B | 1.90B | 2.18B | 1.75B | 1.84B |
| Total Liabilities | 3.18B | 3.28B | 3.50B | 3.29B | 3.45B |
| Stockholders Equity | 1.80B | 1.85B | 1.37B | 1.05B | 685.60M |
Cash Flow | |||||
| Free Cash Flow | 333.70M | 168.10M | -114.80M | 94.00M | -136.50M |
| Operating Cash Flow | 614.30M | 407.20M | 85.90M | 224.90M | 16.10M |
| Investing Cash Flow | -234.50M | -159.60M | -193.20M | -126.70M | -77.30M |
| Financing Cash Flow | -699.90M | -260.40M | 267.20M | -201.90M | 103.00M |
ATI Technical Analysis
Positive
127.50
Price Trends
114.05
Positive
100.92
Positive
89.41
Positive
Market Momentum
2.88
Positive
66.50
Neutral
53.42
Neutral
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 127.5 is above the 20-day moving average (MA) of 123.30, above the 50-day MA of 114.05, and above the 200-day MA of 89.41, indicating a bullish trend. The MACD of 2.88 indicates Positive momentum. The RSI at 66.50 is Neutral, neither overbought nor oversold. The STOCH value of 53.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $3.78B | 11.99 | 27.38% | 0.67% | 1.55% | 701.41% | |
77 Outperform | $16.65B | 39.37 | 23.48% | 0.24% | 2.40% | 81.54% | |
76 Outperform | $12.73B | 18.02 | 25.58% | 0.85% | 15.71% | 29.60% | |
71 Outperform | $17.32B | 44.70 | 22.12% | ― | 7.75% | 6.84% | |
70 Outperform | $2.85B | 26.77 | 11.31% | 1.27% | 7.43% | 148.83% | |
70 Outperform | $7.75B | 29.77 | 13.86% | 0.33% | 1.19% | -7.78% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
ATI
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ESAB
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ATI Corporate Events
Business Operations and StrategyExecutive/Board Changes
ATI Announces New CFO Amid Leadership Changes
Neutral
Dec 8, 2025
On December 4, 2025, ATI Inc. announced the appointment of J. Robert Foster as the new Senior Vice President, Finance and Chief Financial Officer, effective January 1, 2026. Foster, who has been with ATI since 2012, brings extensive experience in finance and operations, having previously served as President of the Specialty Alloys & Components business unit. He succeeds Donald P. Newman, who will transition to a Strategic Advisor role before retiring on March 1, 2026. Additionally, Chief Human Resources Officer Tina K. Busch resigned on December 5, 2025, and will provide consulting services during the transition period. These leadership changes are part of ATI’s strategic succession planning to ensure continued growth and operational excellence.
The most recent analyst rating on (ATI) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on ATI stock, see the ATI Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.