Tat Techno (TATT) AI Stock Analysis

• Market Cap: $331.81M
• Dividend Yield: N/A
• Average Volume (3M): 231.76K
• Price to Earnings (P/E): 22.1
• Beta (1Y): 0.81
• Revenue Growth: 30.58%
• EPS Growth: 83.94%
• Country: US
• Employees: 634
• Sector: Industrials
• Sector Strength: 88
• Industry: Aerospace & Defense
• EPS (TTM): 0.34
• Shares Outstanding: 12,568,595
• 10 Day Avg. Volume: 511,577
• 30 Day Avg. Volume: 231,765
• PEG Ratio: 0.50
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -2.24
• Enterprise Value/Market Cap: 0.21
• Enterprise Value/Revenue: 0.13
• Enterprise Value/Gross Profit: 2.10
• Enterprise Value/Ebitda: 1.14
• 1Y Price Target: $35.50
• Price Target Upside: 36.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 65 Neutral
• Price Target: $28.00 ▲(7.40%Upside)

Tat Techno's strong financial performance and positive earnings call outlook are offset by technical weakness and cash flow challenges. The company shows potential for growth, but macroeconomic uncertainties and supply chain issues pose risks.

Positive Factors

Earnings Performance

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

Market Expansion

TATT is just scratching the surface of the $2B APU opportunity, with the company noting the number of customer RFP’s points to years of growth ahead.

Strategic Partnerships

TATT announced an expanded MRO partnership with a leading International cargo carrier with a value of $45M-$55M over 5 years.

Negative Factors

Geopolitical and Contract Risks

Downside risks include loss of U.S. and Israeli Government contracts and approvals, supply chain disruptions, increasing labor and raw material costs, and geopolitical conflicts in Israel.

Tat Techno Business Overview & Revenue Model

Company Description

TAT 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 Money

Tat 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 exhibits strong revenue growth and improved profitability, with a significant increase in gross and net profit margins. However, cash flow challenges remain, with negative free cash flow and a negative operating cash flow to net income ratio.

Income Statement

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

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

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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 Price: 26.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 26.07 is below the 20-day moving average (MA) of 29.56, below the 50-day MA of 29.03, and above the 200-day MA of 24.50, indicating a neutral trend. The MACD of -1.11 indicates Positive momentum. The RSI at 37.95 is Neutral, neither overbought nor oversold. The STOCH value of 15.59 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ISSC	78 Outperform	$204.91M	18.93	22.77%	―	58.67%	70.38%
CODA	72 Outperform	$74.57M	19.09	7.61%	―	15.63%	64.98%
Sector *	66 Neutral	$4.51B	12.29	5.40%	3.67%	4.15%	-12.21%
TATT	65 Neutral	$331.81M	22.11	12.30%	―	30.58%	83.94%
ACHR	49 Neutral	$6.25B	―	-73.89%	―	―	17.43%
EH	48 Neutral	$1.22B	―	-43.18%	―	167.99%	22.75%
EVTL	25 Underperform	$488.16M	―	115.25%	―	―	23.26%