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

Shares of Astronics Corporation ATRO have surged 44.5% in the past three months, outperforming both the Zacks Aerospace-Defense Equipment industry’s decline of 1.5% and the broader Zacks Aerospace sector’s decline of 2.3%. It also came above the S&P 500’s return of 7.3% in the same time frame.

Other industry players like Kratos Defense & Security Solutions KTOS and Curtiss-Wright Corp. CW have also delivered a similar stellar performance in the past three months. Shares of KTOS and CW have risen 13.5% and 14.3%, respectively, in the said period.

With ATRO’s strong performance in the market, many investors may feel encouraged to buy right away. However, before taking that step, it’s important to evaluate whether the company has the fundamental strength to support long-term growth or if the recent surge is temporary. Understanding the stability of ATRO’s growth prospects can help investors make a well-informed decision.

Tailwinds for ATRO

ATRO’s recent performance appears to be supported by its strong quarterly results and strategic acquisitions, which have helped sustain investor confidence. In November, the company reported its third-quarter 2025 results, showing revenue growth of 3.8% and a 44% rise in net adjusted earnings compared with the same period last year.

Astronics has been gaining momentum as global defense and commercial aerospace activity continues to expand. In the third quarter of 2025, its Aerospace unit recorded sales of $192.7 million, nearly 8.5% higher than last year, driven by growth in both commercial transport market sales and military aircraft sales. The drivers were increased demand for cabin power products from airlines as well as heightened demand for light and safety products from military businesses.

In October 2025, Astronics expanded its aviation business by acquiring Buhler Motor Aviation (“BMA”). BMA is a Germany-based manufacturer of aircraft seat actuation systems and offers products such as actuators, electronics, control panels, pneumatic systems and lighting.

This acquisition adds to Astronics’ existing seat actuation capabilities and brings in additional technical strength and proven product designs. BMA will work together with Astronics’ PGA subsidiary to support improved seat actuation solutions and future innovation. Overall, the deal strengthens Astronics’ position in commercial aerospace and supports steady growth in this specialized motion-control segment.

ATRO’s Estimates

The Zacks Consensus Estimate for 2025 sales implies year-over-year growth of 7.7%, while that for 2026 sales indicates an improvement of 14.5%.

The Zacks Consensus Estimate for 2025 earnings implies year-over-year growth of 63.3%, while that for 2026 earnings indicates an improvement of 36.5%.

Further, the upward revision in its near-term earnings estimate over the past 60 days suggests investors’ increasing confidence in this stock’s earnings generation capabilities.

ATRO Stock Reflects Discounted Valuation

In terms of valuation, ATRO’s forward 12-month price-to-sales (P/S) is 1.95X, a discount to the industry average of 9.29X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with its industry average.

Other industry peers, on the contrary, are trading at a premium to ATRO. While Kratos is trading at a forward 12-month P/S of 7.85X, Curtiss-Wright is trading at 5.51X.

Liquidity Position

ATRO has a current ratio of 2.87. The ratio, being more than one, indicates that ACHR possesses sufficient capital to pay off its short-term debt obligations.

ROIC

ATRO’s Return on Invested Capital stands at 15.77%, well above the industry average of 1.56%. This indicates that the company is generating strong returns on its investments and using its capital far more efficiently than most of its peers.

Risks to Consider Before Choosing ATRO

Aerospace-defense companies, such as Astronics, Kratos and Curtiss-Wright, continue to face supply-chain challenges, including shortages of raw materials, rising input costs and limited availability of skilled labor. These issues add pressure to production schedules and overall efficiency.

The recent increase in U.S. tariffs on imports from many trading partners is expected to further intensify these challenges. For Astronics, this could lead to delays in product deliveries and weigh on its operating performance.

Should You Buy ATRO Stock Now?

Astronics presents an attractive case for investors, supported by its discounted valuation, improving earnings outlook, solid growth forecasts, strong liquidity position and robust performance on the bourses, despite the industry challenges it faces. Thus, investors looking for exposure to the aerospace and defense space may consider buying this stock at current levels.

Astronics currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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