Shares of ATI (ATI) have been strong performers lately, with the stock up 36.7% over the past month. The stock hit a new 52-week high of $168.14 in the previous session. ATI has gained 45% since the start of the year compared to the 15.5% move for the Zacks Aerospace sector and the 15.4% 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 February 3, 2026, ATI reported EPS of $0.93 versus consensus estimate of $0.89.
For the current fiscal year, ATI is expected to post earnings of $4.12 per share on $4.96 in revenues. This represents a 27.16% change in EPS on a 8.09% change in revenues. For the next fiscal year, the company is expected to earn $4.95 per share on $5.37 in revenues. This represents a year-over-year change of 20.16% and 8.37%, respectively.
Valuation Metrics
ATI may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb 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. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
ATI has a Value Score of D. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 40.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 37.6X. On a trailing cash flow basis, the stock currently trades at 36.3X versus its peer group's average of 30.4X. Additionally, the stock has a PEG ratio of 1.67. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, ATI currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
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 ATI passes the test. Thus, it seems as though ATI shares could have potential in the weeks and months to come.
How Does ATI Stack Up to the Competition?
Shares of ATI 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 AAR Corp. (AIR). AIR 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. AAR Corp. beat our consensus estimate by 15.69%, and for the current fiscal year, AIR is expected to post earnings of $4.85 per share on revenue of $3.2 billion.
Shares of AAR Corp. have gained 10.9% over the past month, and currently trade at a forward P/E of 24.69X and a P/CF of 21.91X.
The Aerospace - Defense Equipment industry is in the top 21% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ATI and AIR, even beyond their own solid fundamental situation.
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ATI Inc. (ATI): Free Stock Analysis Report AAR Corp. (AIR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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