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Astronics Corp. (ATRO)
NASDAQ:ATRO
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Astronics
(NASDAQ:ATRO)
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Rating:63Neutral
Price Target:
$85.00
▲(5.43% Upside)
Action:ReiteratedDate:02/25/26
ATRO scores as moderately attractive: strong technical trend and a constructive earnings outlook/backlog support near-term momentum, while the operating turnaround is tempered by materially higher leverage and mixed cash conversion. Valuation contributes little support due to a negative P/E and no dividend yield provided.
Positive Factors
Record backlog supporting revenue visibility
A large, near-term backlog provides durable revenue visibility across the next 12 months, reducing reliance on spot demand. This supports capacity planning, pricing leverage and a steady conversion of orders into cash and profits, underpinning multi-quarter growth assumptions and operational planning.
Sustained margin expansion and return to profitability
Material margin expansion and a return to net profitability reflect durable improvements in pricing, cost structure and operating leverage. If sustained, higher gross and operating margins increase free cash flow potential, improve resilience to cycle swings and validate structural recovery efforts across segments.
Improved cash generation and liquidity cushion
Stronger operating cash flow and a sizeable liquidity buffer provide the company flexibility to fund CapEx, ERP rollout and working capital needs without immediate refinancing. This cash base supports execution on backlog and strategic initiatives while absorbing timing variability in aerospace and defense contracts.
Negative Factors
Marked increase in leverage
A sharp rise in net debt and elevated leverage materially reduces financial flexibility and raises interest and refinancing sensitivity. Higher leverage can constrain strategic optionality, increase cashflow required for servicing debt, and amplify earnings volatility during aerospace/defense cycle slowdowns.
Large near-term cash demands for CapEx and ERP
Elevated 2026 capital and ERP expenditures will meaningfully draw on operating cash and liquidity, limiting near-term free cash flow available for deleveraging or opportunistic investment. ERP implementation risk and multi-year spend timing could temporarily compress cash generation and operational focus.
Test Systems profitability dependent on program ramp timing
Improvement in Test Systems margins relies on government program volume timing; delays would prolong under-absorption of fixed costs and unfavorable mix. This dependency introduces program-timing risk that can create earnings and cash-flow volatility if defense contract schedules shift or procurement is delayed.
Astronics (ATRO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.86B
Dividend YieldN/A
Average Volume (3M)582.54K
Price to Earnings (P/E)111.4
Beta (1Y)0.86
Revenue Growth6.19%
EPS Growth52.10%
CountryUS
Employees2,500
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.75
Shares Outstanding31,619,410
10 Day Avg. Volume625,274
30 Day Avg. Volume582,541
Financial Highlights & Ratios
PEG Ratio-0.26
Price to Book (P/B)14.90
Price to Sales (P/S)2.42
P/FCF Ratio48.40
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue3.77
Enterprise Value/Gross Profit12.60
Enterprise Value/Ebitda49.18
Forecast
1Y Price Target
$96.00Price Target Upside19.08% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)2.52
Revenue Forecast (FY)$970.53M
Astronics Business Overview & Revenue Model
Company DescriptionAstronics Corporation, through its subsidiaries, designs and manufactures products for the aerospace, defense, and electronics industries in the United States, rest of North America, Asia, Europe, South America, and internationally. It operates in two segments, Aerospace and Test Systems. The Aerospace segment offers lighting and safety systems, electrical power generation systems, distribution and seat motions systems, aircraft structures, avionics products, system certification, and other products. This segment serves airframe manufacturers (OEM) that build aircraft for the commercial, military, and general aviation markets; suppliers to OEMs; and aircraft operators, such as airlines; suppliers to the aircraft operators; and branches of the U.S. Department of Defense. The Test Systems segment designs, develops, manufactures, and maintains automated test systems that support the aerospace and defense, and communications and mass transit industries; and provides wireless communication testing for the civil land mobile radio market, as well as training and simulation devices for commercial and military applications. It serves OEMs and prime government contractors for electronics and military products. The company was incorporated in 1968 and is headquartered in East Aurora, New York.
How the Company Makes MoneyAstronics generates revenue through the sale of its aerospace and defense products and services. The Aerospace segment contributes the majority of the company’s revenue, driven by contracts with commercial and military aircraft manufacturers, as well as aftermarket services and retrofitting of existing aircraft. The Test Systems segment earns revenue through the sale of testing equipment and solutions to semiconductor manufacturers and aerospace clients. Key revenue streams include product sales, service contracts, and long-term agreements with major aerospace companies. Additionally, partnerships with leading aircraft manufacturers and defense contractors enhance the company’s market reach and stability, contributing significantly to its earnings.
Astronics Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down income from various business units, providing insight into which segments drive growth and how diversified the company’s revenue sources are.
Breaks down income from various business units, providing insight into which segments drive growth and how diversified the company’s revenue sources are.
Data provided by:
The Fly
The FlyAstronics Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operational and financial quarter with record revenue, significant margin expansion, robust cash generation, record backlog and constructive 2026 guidance. Key near-term challenges include a large increase in net debt from refinancing and convertible bond repurchases, tariff uncertainty (potential ~$8M exposure), elevated planned capital and ERP spending that will pressure cash flow in 2026, and dependency on timing of the Army test-program ramp for Test Systems profitability. Overall, the positives — record sales, broad-based margin improvement, strong bookings/backlog and clear progress on pricing and cost initiatives — outweigh the headwinds, which appear manageable and largely one-time or timing-related.Q4-2025 Updates
Positive Updates
Record Quarterly Revenue
Q4 revenue of $240,000,000 set a new company record, beating the prior 2018 record by almost 13%; sales were up 15.1% year-over-year and up 13.5% sequentially.
Material Gross Profit and Margin Expansion
Gross profit increased nearly 29% to $80,000,000 in Q4; gross margin expanded 350 basis points year-over-year to 33.3%.
Record Operating Income and Adjusted EBITDA
Operating income was $35,500,000 (14.8% operating margin) and adjusted EBITDA was 19% for the quarter — both post-pandemic records.
Strong Aerospace Performance
Aerospace operating profit was $41,700,000, roughly 2.5x the prior year; Aerospace operating margin reached ~19% (adjusted Aerospace margin ~19.8%, a ~380 basis point expansion).
Improved Full-Year Profitability Metrics
2025 adjusted operating margin improved to 12.2% from 7.7% in 2024 and adjusted EBITDA rose to 15.6% from 12.1% the prior year; full-year revenue growth was 8.4%.
Cash Generation, Liquidity and Backlog Strength
Generated $27,600,000 in cash from operations in Q4 ($74,800,000 for FY2025); closed quarter with $231,000,000 available liquidity and a record year-end backlog of $674,500,000; Q4 bookings were $257,000,000 with book-to-bill of 1.07.
Reduced Litigation Expense and SG&A
SG&A declined $7,300,000 in Q4, primarily driven by a $9,000,000 reduction in legal reserves and litigation-related expenses, contributing to operating leverage.
Positive Outlook and 2026 Guidance
Preliminary 2026 revenue guidance of $950,000,000 to $990,000,000 (midpoint $970,000,000 implies ~12.5% growth); Q1 revenue expected $220,000,000–$230,000,000 and company targets sustainable high-teens operating margins over time.
Test Systems Profitability Improvement
Test Systems produced an operating profit of $1,100,000 in Q4 versus slightly below breakeven a year ago, reflecting benefits from restructuring and simplification actions.
Progress on Pricing Actions
Company reports repricing actions are ~70%–80% complete, contributing materially to margin recovery versus inflation-driven cost increases.
Negative Updates
Significant Increase in Net Debt
Net debt rose to $324,800,000 at year end from $156,600,000 at the end of 2024, driven largely by refinancing actions including the repurchase of 80% of the 5.5% convertible bonds (repurchase cost ~$285,800,000) and other financing moves.
Tariff Uncertainty and Incremental Tariff Costs
Company incurred $2,900,000 of increased tariff expenses in the quarter and faces uncertainty after a Supreme Court decision; approximately $8,000,000 of previously paid incremental tariffs are under review with no benefit assumed in the outlook.
Higher Near-Term Capital and ERP Cash Outlays
Expected 2026 capital expenditures of $40,000,000–$50,000,000 plus $14,000,000–$18,000,000 in ERP project spend (treated as operating cash outflow) will increase near-term cash demands and extend the ERP implementation over ~5 years.
Working Capital Absorption
Strong cash from operations in the quarter was partially offset by higher working capital needs to support increased order volume, reducing net cash flow benefit for the period.
Dependence on U.S. Army Turn-On for Test Program
Test Systems profitability improvement depends materially on the U.S. Army turning on volume production of the 4549T radio test program; the government shutdown delayed the turn-on and timing remains uncertain (company expects a Q2 turn-on but still a risk).
One-Time Acquisition and Transaction Costs
SG&A included incremental costs related to the Buehler acquisition and one-time legal and accounting charges; while legal reserves declined, acquisition-related expenses still weighed on operating results.
Potential Dilution Mechanics and Share Count Effects
Diluted shares in Q4 included 1,400,000 implied shares from remaining 5.5% convertible bonds because average share price exceeded conversion price; 0% new convertible bonds carry potential dilution only if share price exceeds $83.41, creating future dilution considerations.
Under-Absorption and Mix Pressure in Test Systems
Despite Q4 improvement, Test Systems still faced unfavorable mix and under-absorption of fixed costs at current volumes; meaningful profitability depends on program ramp.
Company Guidance
The company issued preliminary 2026 revenue guidance of $950M–$990M (midpoint $970M, ~12.5% growth; high end ≈15%), with Q1 sales expected at $220M–$230M and a cadence that rises thereafter so second‑half quarterly sales should exceed $250M; management did not give bottom‑line guidance but expects continued margin improvement and is targeting sustainable high‑teens operating margins over time. Capital plans include 2026 CapEx of $40M–$50M plus an ERP program with $14M–$18M of cash‑flow spending (outside CapEx) and a ~5‑year staged rollout (heaviest cost in 2026). Guidance is supported by a record backlog of $674.5M, Q4 bookings of $257M (book‑to‑bill 1.07), available liquidity of $231M, and management’s expectation that Test Systems profitability will improve as the U.S. Army 4549T radio test program ramps (they’re planning for a turn‑on in or shortly after Q2 2026).Astronics Financial Statement Overview
Summary
Operating turnaround is evident (steady revenue growth into 2025, gross margin expansion to ~30%, return to positive net income, and positive operating/free cash flow). The main constraint is balance-sheet risk: leverage rose sharply in 2025 (debt/equity ~2.7x) and free cash flow fell vs. 2024 with only partial coverage of net income, reducing flexibility if results soften.Income Statement
Profitability has improved materially: the company moved from net losses in 2022–2024 to positive net income in 2025, alongside a sharp expansion in gross margin (about 21% in 2024 to ~30% in 2025). Revenue has been growing steadily in recent years (2022–2025), supporting the turnaround. Offsetting this, net margin remains modest (~3% in 2025) and results were loss-making as recently as 2024, highlighting that earnings power is still in a rebuilding phase.62
Positive
Balance Sheet
Leverage increased significantly in 2025: total debt rose while equity fell, pushing debt relative to equity to a high level (roughly 2.7x in 2025 versus ~0.8x in 2023–2024). While the return on equity turned strong in 2025 due to the return to profitability, the higher debt load reduces financial flexibility and increases sensitivity to any earnings volatility typical of Aerospace & Defense cycles.38
Negative
Cash Flow
Cash generation improved meaningfully in 2024–2025, with positive operating cash flow and positive free cash flow in both years, supporting the earnings recovery. However, free cash flow declined in 2025 versus 2024 (negative growth), and free cash flow covered only a bit over half of net income in 2025, suggesting working-capital or reinvestment demands are still absorbing cash.56
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 862.13M | 795.43M | 689.21M | 534.89M | 444.91M |
| Gross Profit | 258.16M | 168.34M | 120.80M | 71.54M | 65.36M |
| EBITDA | 66.34M | 50.93M | 19.43M | -2.27M | -4.68M |
| Net Income | 29.36M | -16.21M | -26.42M | -35.75M | -25.58M |
Balance Sheet | |||||
| Total Assets | 706.68M | 648.76M | 649.00M | 615.03M | 609.14M |
| Cash, Cash Equivalents and Short-Term Investments | 18.18M | 9.29M | 11.31M | 13.78M | 29.76M |
| Total Debt | 378.35M | 193.87M | 197.88M | 178.41M | 181.80M |
| Total Liabilities | 566.60M | 392.67M | 399.48M | 375.11M | 352.53M |
| Stockholders Equity | 140.07M | 256.10M | 249.52M | 239.92M | 256.60M |
Cash Flow | |||||
| Free Cash Flow | 43.12M | 22.14M | -31.59M | -35.99M | -11.56M |
| Operating Cash Flow | 74.80M | 30.57M | -23.95M | -28.31M | -5.53M |
| Investing Cash Flow | -53.75M | -8.43M | -4.11M | 14.39M | 3.18M |
| Financing Cash Flow | -22.39M | -14.53M | 25.43M | -1.41M | -7.50M |
Astronics Technical Analysis
Positive
80.62
Price Trends
69.45
Positive
59.59
Positive
47.50
Positive
Market Momentum
2.55
Positive
63.73
Neutral
88.18
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATRO, the sentiment is Positive. The current price of 80.62 is above the 20-day moving average (MA) of 77.30, above the 50-day MA of 69.45, and above the 200-day MA of 47.50, indicating a bullish trend. The MACD of 2.55 indicates Positive momentum. The RSI at 63.73 is Neutral, neither overbought nor oversold. The STOCH value of 88.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ATRO.
Astronics Risk Analysis
Astronics disclosed 42 risk factors in its most recent earnings report. Astronics reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Astronics Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $7.03B | 67.78 | 7.87% | 0.89% | -0.37% | -34.97% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $2.86B | 111.43 | 14.82% | ― | 6.19% | 52.10% | |
59 Neutral | $4.64B | 45.59 | 6.86% | ― | 17.59% | -56.15% | |
59 Neutral | $1.85B | -53.68 | -5.05% | ― | 3.16% | -213.56% | |
55 Neutral | $5.34B | ― | -2.08% | ― | 8.63% | 72.72% |
* Industrials Sector Average
ATRO
Astronics
81.35
61.39
307.57%
AIR
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119.77
56.54
89.42%
DCO
Ducommun
130.28
72.40
125.09%
HXL
Hexcel
94.73
34.54
57.39%
MRCY
Mercury Systems
91.01
47.40
108.69%
Astronics Corporate Events
Business Operations and StrategyFinancial Disclosures
Astronics Signals Post-Pandemic Recovery and New Growth Phase
Positive
Jan 14, 2026
Astronics Corporation told investors at conferences held on January 13 and 14, 2026 that its recovery from the pandemic downturn is largely complete and that it is entering a new growth phase, supported by preliminary 2025 revenue, bookings and backlog figures that point to rising demand across its aerospace and test businesses. In an updated January 2026 investor presentation, the company expanded its 2026 outlook to specify revenue expectations for its Test segment, underscoring its efforts to balance strong commercial aerospace tailwinds—particularly in in-seat power and aircraft lighting—with ambitions to improve profitability in test solutions and capitalize on long-term defense programs such as the U.S. Army’s Future Long-Range Assault Aircraft, where Astronics’ CorePower systems are expected to represent significant shipset content over the life of the program.
The most recent analyst rating on (ATRO) stock is a Buy with a $72.00 price target. To see the full list of analyst forecasts on Astronics stock, see the ATRO 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.