Here's How Aerospace Segment Powers Astronics' Growth Story

Astronics Corporation’s ATRO Aerospace segment is the largest contributor to revenues as well as the key driver of backlog visibility. The segment generated 89% of total revenues in 2024 and 93% in the first nine months of 2025, reflecting improving demand across multiple end markets.

The Aerospace segment earns from designing and manufacturing products for the global aerospace industry. Product lines include lighting and safety systems, electrical power generation, distribution and seat motion systems, aircraft structures, avionics products, systems certification, and other products. Revenues from the segment increased 17% in 2024 and 11% through the first nine months of 2025, driven by improvements in sales in Commercial Transport and Military Aircraft markets as well as product lines. 

Astronics is experiencing favorable demand conditions in both defense and commercial aerospace. Rising global defense budgets are driving sustained demand for military aircraft programs, while the continued expansion in air travel is prompting airlines to invest in cabin upgrades, including in-seat power and in-flight connectivity solutions. These trends directly support Astronics’ core product offerings and provide a solid foundation for growth.

A strong order book enhances revenue visibility and enables efficient production planning. Backlog reached $572.5 million, up 6.5% from year-end 2024, reinforcing confidence in medium-term growth. Rising Aerospace volumes are driving operating leverage, with improved fixed-cost absorption lifting margins. Notably, operating margin expanded 360 basis points year over year in the first nine months of 2025, reflecting stronger adjusted profitability.

What About ATRO’s Peers?

Kratos Government Solutions is the main revenue and technology engine of Kratos Defense & Security Solutions KTOS, delivering advanced electronics, C5ISR, satellite communications, and missile defense systems to U.S. and allied customers. The segment provides steady cash flow and long-term contracts, strengthening Kratos Defense & Security Solutions’ competitive position and supporting innovation. This foundation enables Kratos Defense & Security Solutions to maintain scale and drive strategic growth.

Likewise, the Space Systems segment is pivotal to Rocket Lab RKLB, providing satellite components, spacecraft platforms, and integrated mission services. By expanding Space Systems, Rocket Lab deepens vertical integration, boosts recurring revenues and supports its long-term expansion strategy.

ATRO’s Price Performance

Shares of Astronics have gained 41.5% year to date, outperforming the industry.

ATRO’s Discounted Valuation

The stock is undervalued compared with its industry. It is currently trading at a price-to-sales multiple of 2.85, lower than the industry average of 12.62.

Estimate Movement for ATRO

The Zacks Consensus Estimate for ATRO’s first-quarter 2026 EPS has witnessed no movement in the past seven days. The same holds true for 2026.

The consensus estimates for ATRO’s 2026 revenues and EPS indicate year-over-year increases. 

ATRO stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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