Tat Techno (TATT) AI Stock Analysis

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Tat Techno

(NASDAQ:TATT)

63Neutral

TAT Technologies shows promising revenue growth and profitability improvements, bolstered by strategic initiatives such as new product launches. However, liquidity challenges and potential risks from supply chain issues and increased expenses temper the outlook. The stock's fair valuation and mixed technical indicators suggest caution but potential for growth.

Positive Factors

Demand

Backlogs increased to a record $429M, indicating strong future demand.

Financial Performance

TATT's recent results exceeded expectations on both top-line and margin front, marking the ninth consecutive quarter of growth.

Market Opportunity

TATT's expanded APU capabilities are expected to gain traction, with likely order flow picking up, representing a $2.5B market.

Negative Factors

Cash Flow

Cash flow was slightly below expectations, partly due to strategic investments in unstable supply chain areas.

Tat Techno (TATT) vs. S&P 500 (SPY)

Market Cap

$281.50M

Dividend YieldN/A

Average Volume (3M)125.03K

Price to Earnings (P/E)24.8

Beta (1Y)1.12

Revenue Growth33.68%

EPS Growth101.78%

CountryUS

Employees634

SectorIndustrials

Sector Strength64

IndustryAerospace & Defense

Share Statistics

EPS (TTM)1.04

Shares Outstanding10,940,358

10 Day Avg. Volume207,724

30 Day Avg. Volume125,029

Financial Highlights & Ratios

PEG Ratio0.24

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$35.00

Price Target Upside36.03% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Tat Techno Business Overview & Revenue Model

Company DescriptionTAT Technologies Ltd., together with its subsidiaries, provides solutions and services to the commercial and military aerospace, and ground defense industries in the United States, Israel, and internationally. The company operates through four segments: Original Equipment Manufacturing (OEM) of Heat Transfer Solutions and Aviation Accessories; Maintenance, Repair, and Overhaul (MRO) Services for Heat Transfer Components and OEM of Heat Transfer Solutions; MRO Services for Aviation Components; and Overhaul and Coating of Jet Engine Components. It designs, develops, and manufactures a range of heat transfer solutions, such as pre-cooler and oil/fuel hydraulic heat exchangers used in mechanical and electronic systems in commercial, military, and business aircraft; environmental control and power electronics cooling systems for use in aircraft and ground applications; and a range of other mechanical aircraft accessories and systems, such as pumps, valves, and turbine power units. The company also provides MRO services for heat transfer components, as well as for manufacturing heat transfer solutions; and aviation components. In addition, it engages in the operation of a repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers, and the military; and the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes, and afterburner flaps. The company was formerly known as Galagraph Ltd. and changed its name to TAT Technologies Ltd. in May 1992. TAT Technologies Ltd. was founded in 1969 and is based in Netanya, Israel.

How the Company Makes MoneyTat Techno generates revenue through a diverse model that includes the sale of its consumer electronics, subscription fees for its cloud computing services, and licensing fees for its AI software solutions. The company also leverages strategic partnerships with other technology firms to co-develop and distribute products, expanding its market reach and enhancing its revenue streams. Additionally, TATT earns from consulting services offered to businesses seeking to implement its technology solutions, providing an integrated approach to digital transformation.

Tat Techno Financial Statement Overview

Summary

Tat Techno's financial performance reflects a company on a growth trajectory, with increased revenues and improved profitability metrics. While the balance sheet remains strong with manageable debt levels, the cash flow statements indicate potential liquidity challenges. Continued focus on operational efficiencies and cash flow management will be crucial for sustaining growth in the competitive Aerospace & Defense industry.

Income Statement

Positive

Tat Techno has demonstrated significant revenue growth, increasing from $75.4M in 2020 to $152.1M in 2024, reflecting a robust expansion strategy. The gross profit margin has improved from 10.8% in 2020 to 21.7% in 2024, highlighting better cost management or pricing strategies. The net profit margin also shows positive growth, moving from a negative 4.4% in 2020 to a positive 7.3% in 2024, indicating enhanced profitability. However, EBIT and EBITDA margins, while improving, suggest some operational challenges that need addressing.

Balance Sheet

Positive

The company's debt-to-equity ratio has improved, moving from 0.19 in 2020 to 0.18 in 2024, indicating a conservative approach to debt. The return on equity (ROE) has increased from negative values in early years to 10% in 2024, showing improved efficiency in generating profits from shareholders' investments. However, the equity ratio has decreased slightly from 69.1% in 2020 to 68.5% in 2024, suggesting a slight increase in leverage.

Cash Flow

Neutral

Tat Techno has faced challenges with free cash flow, with significant negative values over the years, culminating in -$10.9M in 2024. The operating cash flow to net income ratio is negative, suggesting that the company is not efficiently converting its net income into cash. However, the company has shown resilience by reducing negative free cash flow from -$21M in 2022 to -$10.9M in 2024.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
152.12M	113.79M	84.56M	77.97M	75.36M
	Gross Profit
33.01M	22.47M	15.93M	11.27M	8.44M
	EBIT
12.50M	6.08M	969.00K	-2.14M	-3.82M
	EBITDA
17.48M	11.14M	2.96M	989.00K	248.00K
	Net Income Common Stockholders
11.17M	4.67M	-1.75M	-3.91M	-3.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.13M	16.64M	7.72M	12.87M	24.13M
	Total Assets
163.36M	145.58M	126.65M	110.83M	116.12M
	Total Debt
19.66M	29.95M	29.82M	15.84M	15.34M
	Net Debt
12.53M	13.97M	22.10M	2.96M	-8.79M
	Total Liabilities
51.39M	54.89M	51.08M	34.05M	35.84M
	Stockholders Equity
111.97M	90.68M	75.57M	76.78M	80.28M
Cash Flow		Free Cash Flow
-10.94M	-3.33M	-21.08M	-18.29M	693.00K
	Operating Cash Flow
-5.82M	2.25M	-4.87M	-1.49M	6.10M
	Investing Cash Flow
-3.85M	-3.58M	-16.12M	-15.64M	-5.41M
	Financing Cash Flow
161.00K	10.24M	15.80M	6.04M	7.65M

Tat Techno Technical Analysis

Technical Analysis Sentiment

Negative

Last Price25.73

Price Trends

50DMA

26.71

Negative

100DMA

26.89

Negative

200DMA

21.93

Positive

Market Momentum

MACD

0.20

Positive

RSI

44.87

Neutral

STOCH

13.72

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TATT, the sentiment is Negative. The current price of 25.73 is below the 20-day moving average (MA) of 27.46, below the 50-day MA of 26.71, and above the 200-day MA of 21.93, indicating a neutral trend. The MACD of 0.20 indicates Positive momentum. The RSI at 44.87 is Neutral, neither overbought nor oversold. The STOCH value of 13.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TATT.

Tat Techno Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ISSC	75 Outperform	$117.55M	17.55	15.23%	―	43.24%	4.37%
CODA	72 Outperform	$69.85M	17.88	7.61%	―	15.63%	64.98%
TATT	63 Neutral	$281.50M	24.76	11.02%	―	33.68%	101.78%
Sector *	63 Neutral	$4.26B	11.28	5.43%	215.24%	4.12%	-8.73%
EH	50 Neutral	$1.20B	―	-39.62%	―	285.43%	32.57%
ACHR	49 Neutral	$4.03B	―	-95.88%	―	―	17.43%
EVTL	25 Underperform	$290.02M	―	115.25%	―	―	23.26%

* Industrials Sector Average

Performance Comparison

TATT

Tat Techno

25.40

13.51

113.62%

ISSC

Innovative Solutions And Support

6.71

0.25

3.87%

CODA

Coda Octopus Group

6.71

-0.04

-0.59%

Ehang Holdings

16.94

-1.30

-7.13%

EVTL

Vertical Aerospace

3.86

-4.15

-51.81%

ACHR

Archer Aviation

8.59

4.57

113.68%

Tat Techno Earnings Call Summary

Earnings Call Date: Mar 26, 2025 | % Change Since: -0.66% | Next Earnings Date: May 28, 2025

Earnings Call Sentiment Positive

TAT Technologies demonstrated strong financial growth with significant revenue and profitability increases. New product launches and backlog growth indicate a positive trajectory. However, challenges remain with supply chain issues and increased interest and tax expenses. The company's strategic investments in inventory have impacted cash flow negatively, but these are seen as necessary for future growth.

Highlights

Significant Revenue Growth

TAT Technologies reported a 34% increase in annual revenue, reaching over $150 million, and a 29% increase in Q4 revenue to $41 million compared to Q4 2023.

Increase in Profitability

Net income grew by 139% compared to 2023, with a gross margin increase from 19.7% in 2023 to 21.7% in 2024. Adjusted EBITDA margin increased from 9.7% in 2023 to 12.2% in 2024.

New Product Launches

Launch of new APU capabilities, opening access to substantial new markets, contributing to revenue increase.

Strong Backlog Increase

Backlog and long-term agreement value increased to $429 million at the end of 2024 compared to $406 million at the end of 2023.

Trading and Leasing Expansion

Expansion in trading and leasing capabilities, providing high profitability and supporting supply chain challenges.

Lowlights

Supply Chain Challenges

Continued challenges with parts and materials availability and longer lead times, requiring strategic sourcing and inventory buildup.

Negative Operating Cash Flow

The strategic decision to invest in inventory and working capital resulted in a negative operating cash flow for the year.

Interest Expenses Impact

Interest expenses due to $20 million in loans with rates between 7.8% to 8.3%, resulting in nearly $2 million in interest expenses for 2024.

Expected Increase in Tax Expenses

Anticipated increase in tax expenses by the end of 2025, with taxes expected to be paid starting in 2026.

Company Guidance

During TAT Technologies' Fourth Quarter 2024 Earnings Conference Call, guidance highlighted the company's strong financial performance and strategic growth initiatives. In 2024, TAT Technologies achieved a 34% increase in revenue, reaching over $150 million, and a 139% increase in net income compared to 2023. The fourth quarter alone saw a 29% revenue increase to $41 million. The company improved its gross margin from 19.7% in 2023 to 21.7%, with an adjusted EBITDA margin rising from 9.7% to 12.2%. TAT Technologies reported a record backlog of $429 million, up from $406 million in 2023, indicating potential growth in 2025 and 2026. Despite supply chain challenges, the company strategically increased inventory to support future growth. The call also noted the launch of new APU capabilities and the expansion of trading and leasing activities as key growth drivers. TAT Technologies aims for continued profitability improvement, targeting a gross margin above 25% and an EBITDA margin exceeding 15% in the future.

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.