A strong stock as of late has been Astronics Corporation (ATRO). Shares have been marching higher, with the stock up 22.1% over the past month. The stock hit a new 52-week high of $47.5 in the previous session. Astronics has gained 195.9% since the start of the year compared to the 33.4% move for the Zacks Aerospace sector and the 32.5% return for the Zacks Aerospace - Defense Equipment industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 6, 2025, Astronics reported EPS of $0.38 versus consensus estimate of $0.33 while it missed the consensus revenue estimate by 1.17%.
For the current fiscal year, Astronics is expected to post earnings of $1.6 per share on $850.77 in revenues. This represents a 46.79% change in EPS on a 6.96% change in revenues. For the next fiscal year, the company is expected to earn $2.12 per share on $927.8 in revenues. This represents a year-over-year change of 32.5% and 9.05%, respectively.
Valuation Metrics
While Astronics has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Astronics has a Value Score of C. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 29.5X current fiscal year EPS estimates, which is not in-line with the peer industry average of 35.1X. On a trailing cash flow basis, the stock currently trades at 25.3X versus its peer group's average of 27.8X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, Astronics currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Astronics passes the test. Thus, it seems as though Astronics shares could have a bit more room to run in the near term.
How Does ATRO Stack Up to the Competition?
Shares of ATRO have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Leonardo DRS, Inc. (DRS). DRS has a Zacks Rank of #2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Leonardo DRS, Inc. beat our consensus estimate by 4.55%, and for the current fiscal year, DRS is expected to post earnings of $1.11 per share on revenue of $3.59 billion.
Shares of Leonardo DRS, Inc. have gained 7.7% over the past month, and currently trade at a forward P/E of 39.99X and a P/CF of 34.52X.
The Aerospace - Defense Equipment industry is in the top 18% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ATRO and DRS, even beyond their own solid fundamental situation.
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Astronics Corporation (ATRO): Free Stock Analysis Report Leonardo DRS, Inc. (DRS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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