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1. Company Snapshot

1.a. Company Description

Astronics 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.

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1.b. Last Insights on ATRO

Astronics Corporation's recent performance was driven by strong Q1 2025 earnings and revenue growth, with revenue increasing 11% year-over-year, driven by record aerospace sales. The company's upbeat near-term estimates and discounted valuation make it an attractive investment opportunity. Additionally, Astronics' solid contract wins, strong commercial growth, and better return on equity (ROE) compared to its peers, such as Ducommun, further support its positive performance.

1.c. Company Highlights

2. Astronics' Q3 FY2025 Earnings: A Strong Performance

Astronics Corporation reported a robust third quarter fiscal year 2025, with revenue reaching $211.4 million, the second-highest quarterly level ever. The company's operating margin was 10.9%, significantly higher than last year's 4.1%. Adjusted EBITDA was 15.5% of sales, the highest since the pandemic struck in 2020. Earnings per share (EPS) came in at $0.49, beating analyst estimates of $0.42. The Aerospace segment sales totaled $192.7 million, while Test business sales reached $18.7 million, up from the first two quarters of the year.

Publication Date: Nov -30

📋 Highlights
  • Record Revenue:: Achieved $211.4M, second-highest quarterly revenue, driven by demand and supply chain improvements.
  • Operating Margin Growth:: Operating margin rose to 10.9% (from 4.1% YoY), with Aerospace segment margin at 16.2%.
  • Adjusted EBITDA High:: 15.5% of sales, highest since 2020, reflecting cost efficiencies and pricing strength.
  • Book-to-Bill Balance:: $210M bookings matched revenue (1.0 ratio), with $647M backlog at record levels.
  • Strategic Acquisitions:: Acquired Envoy Aerospace and Bühler Motor Aviation, expanding capabilities and adding $20–25M revenue potential.

Segment Performance

The Aerospace segment operating margin reached 16.2%, driven by broad-based demand across product lines, markets, and customers, as well as improved supply chain performance and production efficiencies. The Test segment operating margin was breakeven, representing progress due to cost reduction initiatives. Total bookings were $210 million, yielding a book-to-bill ratio of 1.0, with a backlog of $647 million, a high level by historical norms.

Strategic Acquisitions and Refinancing

The company made two smaller acquisitions: Envoy Aerospace, which will enhance certification capabilities, and Bühler Motor Aviation (BMA), which will expand seat actuation systems offerings. Astronics also completed refinancing actions, issuing a new $225 million 0% convertible bond to buy back a majority of an earlier convertible bond and repurchase 80% of the previous 5.5% convertible note, reducing potential dilution and lowering the cost of debt.

Outlook and Valuation

Looking ahead, the company expects the fourth quarter to be a step change, with revenue climbing to a range of $225 million to $235 million. The company believes 2026 will be a year of solid growth, with 10% growth or better, driven by increasing OEM build rates, passenger connectivity and entertainment demand, and the adoption of technically advanced flight critical electrical power distribution systems. Analysts estimate next year's revenue growth at 11.5%. With a current P/S Ratio of 2.32 and EV/EBITDA of 108.69, the market is pricing in a significant growth premium.

Key Drivers and Risks

Key drivers of growth include the FLRAA program, expected to contribute around $38 million to $40 million in revenue for 2026, and the integration of recent acquisitions. Risks include potential delays in government programs, such as the Army test program, and the challenges associated with integrating new acquisitions. As Peter Gundermann mentioned, "we are guessing a bit and hedging, but expect the program to start late in 2025 or early 2026, with a possible delay due to the government shutdown."

3. NewsRoom

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ATRO Outperforms Industry Over the Past 3 Months: Should You Buy?

Dec -02

Source: zacks.com

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Geode Capital Management LLC Acquires 22,134 Shares of Astronics Corporation $ATRO

Nov -29

Source: defenseworld.net

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4 Stocks Trading Near 52-Week High With More Upside Potential

Nov -20

Source: zacks.com

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Private Capital's Strategic Moves: Spotlight on Matthews International Corp

Nov -14

Source: gurufocus.com

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Bull of the Day: Astronics (ATRO)

Nov -14

Source: zacks.com

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Acadian Asset Management LLC Grows Position in Astronics Corporation $ATRO

Nov -14

Source: defenseworld.net

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4 Stocks With Recent Price Strength to Enhance Your Portfolio

Nov -11

Source: zacks.com

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Recent Price Trend in Astronics (ATRO) is Your Friend, Here's Why

Nov -07

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.24%)

6. Segments

Aerospace

Expected Growth: 7%

Astronics Corporation's 7% growth in Aerospace is driven by increasing demand for in-flight entertainment and connectivity systems, growing adoption of electric aircraft systems, and rising orders from major aircraft manufacturers. Additionally, the company's focus on innovation, strategic acquisitions, and expansion into emerging markets also contribute to its growth momentum.

Test Systems

Expected Growth: 9%

Astronics' Test Systems segment growth is driven by increasing demand for advanced testing solutions in the aerospace and defense industries, fueled by rising global defense spending and growing adoption of electric and autonomous systems. Additionally, the company's strategic acquisitions and investments in research and development have expanded its product offerings and enhanced its competitive position.

7. Detailed Products

Electrical Power Systems

Astronics Corporation provides electrical power systems for aircraft, including power generation, conversion, and distribution systems.

Lighting and Safety Systems

Astronics Corporation offers a range of lighting and safety systems, including emergency lighting, exit signs, and passenger service units.

Avionics and Test Systems

Astronics Corporation provides avionics and test systems for the aerospace and defense industries, including test and simulation systems.

Aircraft Interior and Structural Components

Astronics Corporation manufactures aircraft interior and structural components, including cabin interior components and composite structures.

Seminars and Training

Astronics Corporation offers seminars and training programs for the aerospace and defense industries, including training on electrical power systems and avionics.

8. Astronics Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Astronics Corporation faces moderate threat from substitutes due to the availability of alternative products and services in the aerospace and defense industry.

Bargaining Power Of Customers

Astronics Corporation's customers, including major aerospace and defense companies, have significant bargaining power due to their large purchasing power and ability to negotiate prices.

Bargaining Power Of Suppliers

Astronics Corporation has a diverse supplier base, which reduces the bargaining power of individual suppliers, and the company's large scale of operations also gives it negotiating power over suppliers.

Threat Of New Entrants

The aerospace and defense industry has high barriers to entry, including significant capital requirements and regulatory hurdles, which reduces the threat of new entrants for Astronics Corporation.

Intensity Of Rivalry

The aerospace and defense industry is highly competitive, with several established players competing for market share, which increases the intensity of rivalry for Astronics Corporation.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 41.00%
Debt Cost 11.74%
Equity Weight 59.00%
Equity Cost 12.17%
WACC 11.99%
Leverage 69.49%

11. Quality Control: Astronics Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Planet Labs

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Growth: 5.2

Quality: 3.5

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

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Growth: 3.7

Quality: 3.2

Yield: 0.0

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Value: 8.0

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Astronics

A-Score: 3.9/10

Value: 3.5

Growth: 4.0

Quality: 3.3

Yield: 0.0

Momentum: 9.5

Volatility: 3.0

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Value: 6.6

Growth: 3.6

Quality: 4.8

Yield: 0.0

Momentum: 4.0

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Terran Orbital

A-Score: 3.9/10

Value: 9.6

Growth: 3.2

Quality: 5.0

Yield: 0.0

Momentum: 5.0

Volatility: 0.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

51.14$

Current Price

51.14$

Potential

-0.00%

Expected Cash-Flows