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Tat Technologies Ltd (TATT)
NASDAQ:TATT
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Tat Techno
(NASDAQ:TATT)
Rating:68Neutral
Price Target:
$30.00
▼(-1.77%Downside)
Positive Factors
Earnings Performance
TATT reported 1Q25 revenues of $42.1M (+24% y/y) vs. analyst's $41.7M estimate, while adj EBITDA of $5.7M (+56% y/y) also beat the $5.4M estimate.
Market Opportunities
The biggest upside potential lies in the APU MRO services for 777, 737, and A320, where TATT currently has no market share, and significant growth is anticipated.
Revenue Growth
TAT Technologies' consistent revenue growth combined with backlog expansion provides visibility of over 20% revenue growth, showcasing its strong market position.
Negative Factors
Competitive Positioning
TATT is trading at a 20% discount to its closest peers on an EV/EBITDA basis, indicating a favorable risk/reward profile but also reflecting competitive pressures.
Geopolitical 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.
Supply Chain Concerns
Despite improvements in the aerospace sector, lead times remain extended, increasing demand for capable aftermarket service providers like TAT Technologies.
Tat Techno (TATT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$380.20M
Dividend YieldN/A
Average Volume (3M)306.74K
Price to Earnings (P/E)25.9
Beta (1Y)0.88
Revenue Growth30.58%
EPS Growth83.94%
CountryUS
Employees634
SectorIndustrials
Sector Strength87
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.34
Shares Outstanding12,568,595
10 Day Avg. Volume294,507
30 Day Avg. Volume306,743
Financial Highlights & Ratios
PEG Ratio0.50
Price to Book (P/B)0.62
Price to Sales (P/S)0.00
P/FCF Ratio-2.24
Enterprise Value/Market Cap0.18
Enterprise Value/Revenue0.13
Enterprise Value/Gross Profit2.10
Enterprise Value/Ebitda1.14
Forecast
1Y Price Target
$36.00Price Target Upside17.88% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
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 (TATT) generates revenue through multiple streams. The primary revenue source is its software subscription model, where businesses pay recurring fees for access to its suite of enterprise applications. Additionally, TATT earns significant income from the sale of its hardware products, which includes high-performance computing systems and consumer electronics. The company also capitalizes on its cloud computing services, charging clients based on usage and storage needs. Strategic partnerships with other tech firms and service providers further expand TATT's market reach and contribute to its financial performance through joint ventures and integrated service offerings.
Tat Techno Earnings Call Summary
Earnings Call Date:May 19, 2025
(Q1-2025)
| % Change Since: -12.29%|
Next Earnings Date:Sep 02, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with strong revenue growth, margin expansion, and backlog increase, despite facing supply chain challenges and macroeconomic uncertainties. The company demonstrated resilience by strategically managing these challenges and maintaining a positive long-term growth outlook.Q1-2025 Updates
Positive Updates
Double-Digit Revenue Growth
First quarter revenue increased by 23.6% to $42.1 million, up from $34.1 million in the same period last year.
Gross Margin Expansion
Gross profit increased from 40.9% to $10 million, with the gross margin expanding by 290 basis points to 23.6% compared to 20.7% in the first quarter of 2024.
Adjusted EBITDA Increase
Adjusted EBITDA increased by 56.2% to $5.7 million, translating to an adjusted EBITDA margin of 13.6%, a notable improvement from 10.8% in the same period last year.
Backlog Growth
Backlog and long-term agreements rose to $439 million, providing strong visibility and a runway for continued growth.
Significant Growth in Landing Gear and APU Segments
Landing gear revenue increased by 127% to $3.3 million, and APU segment revenue increased by 34% to $12.3 million.
Negative Updates
Supply Chain Challenges
The company continues to face significant supply chain issues, leading to a strategic increase in inventory levels and resulting in a net cash outflow.
Decrease in Trading and Leasing Revenue
Trading and leasing revenue decreased by 27% to $2.1 million, attributed to the postponement of a specific deal to Q2.
Macroeconomic and Industry Volatility
The aviation sector faces macroeconomic headwinds, including policy changes, proposed tariffs, and broader economic uncertainties, impacting supply chain and customer purchase patterns.
Company Guidance
During the first quarter earnings call for 2025, TAT Technologies Ltd. provided a comprehensive update on its financial performance and strategic outlook. The company reported a 23.6% increase in revenue, reaching $42.1 million, up from $34.1 million in the same period last year. Gross profit rose by 41% to $10 million, with the gross margin expanding by 290 basis points to 23.6%. Adjusted EBITDA saw a 56.2% increase, amounting to $5.7 million, and the margin improved to 13.6%. The company's backlog and long-term agreements escalated to $439 million, indicating strong future growth prospects. Key growth areas include the APU segment, which expanded by 34% to $12.3 million, and the landing gear sector, which surged by 127% to $3.3 million. Despite challenges in the supply chain, TAT Technologies Ltd. has strategically increased inventory levels to mitigate risks and has maintained a positive outlook for the remainder of 2025, focusing on operational efficiencies and strategic market expansions.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.78
Positive
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.65
Positive
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 2024.55
Neutral
| 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 |
| EBITDA | 17.48M | 11.14M | 2.96M | 989.00K | 248.00K |
| Net Income | 11.17M | 4.67M | -1.75M | -3.91M | -3.30M |
Balance Sheet | |||||
| Total Assets | 163.36M | 145.58M | 126.65M | 110.83M | 116.12M |
| Cash, Cash Equivalents and Short-Term Investments | 7.13M | 16.64M | 7.72M | 12.87M | 24.13M |
| Total Debt | 19.66M | 29.95M | 29.82M | 15.84M | 15.34M |
| 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
Positive
30.54
Price Trends
29.15
Positive
28.01
Positive
25.32
Positive
Market Momentum
0.41
Negative
60.51
Neutral
78.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TATT, the sentiment is Positive. The current price of 30.54 is above the 20-day moving average (MA) of 27.64, above the 50-day MA of 29.15, and above the 200-day MA of 25.32, indicating a bullish trend. The MACD of 0.41 indicates Negative momentum. The RSI at 60.51 is Neutral, neither overbought nor oversold. The STOCH value of 78.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TATT.
Tat Techno Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $243.47M | 23.64 | 22.77% | ― | 58.67% | 70.38% | |
72 Outperform | $91.77M | 26.97 | 6.40% | ― | 15.63% | 64.98% | |
68 Neutral | $380.20M | 25.90 | 12.30% | ― | 30.58% | 83.94% | |
58 Neutral | $1.33B | 4.20 | -2.93% | 7.45% | 3.67% | -51.13% | |
49 Neutral | $6.26B | ― | -73.89% | ― | ― | 17.43% | |
47 Neutral | $1.21B | ― | -43.18% | ― | 167.99% | 22.75% | |
25 Underperform | $539.77M | ― | 115.25% | ― | ― | 23.26% |
* Industrials Sector Average
Performance Comparison
TATT
Tat Techno
30.54
15.79
107.05%
ISSC
Innovative Solutions And Support
14.54
8.89
157.35%
CODA
Coda Octopus Group
8.23
2.25
37.63%
EH
Ehang Holdings
16.95
2.36
16.18%
EVTL
Vertical Aerospace
6.64
-0.66
-9.04%
ACHR
Archer Aviation
9.98
5.58
126.82%
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.