Astronics Surges 32% in a Year: Should You Buy the Stock Now?

Astronics Corporation’s ATRO shares have surged a solid 32.3% over the past year, outperforming the Zacks Aerospace-Defense Equipment industry’s gain of 22.4% as well as the broader Zacks Aerospace sector’s rise of 8.5%. It also came above the S&P 500’s return of 8.3% in the same time frame.

Shares of other industry players like Leonardo DRS DRS and Curtiss-Wright Corp. CW have delivered a similar stellar performance in the same period. Shares of DRS and CW have surged 67.5% and 31.7%, respectively, over the past year.

With global air travel on the rise and defense modernization accelerating significantly, aerospace technology stocks like ATRO have been gaining momentum lately, as evident from their performance at the bourses.

This might encourage investors to add ATRO to their portfolio right away. However, before making any hasty decision, let’s delve into what has been bolstering the company’s share price performance, whether there is more room for growth in the near future, and the risks (if any) to investing in it.

What’s Been Pushing ATRO Stock?

Astronics made notable strides last year on its U.S. Army Future Long Range Assault Aircraft contract. With prototype flights scheduled for 2026, the development phase of this program is expected to contribute approximately $60-$65 million in revenues over the next few years.

Additionally, in April 2025, the company secured a significant contract to supply the Frequency Converter Unit (“FCU”) for NASA and Boeing’s Transonic Truss-Braced Wing (TTBW) X-66 aircraft demonstrator. Beyond designing the FCU, Astronics will actively support both ground and flight tests, anticipated to begin in 2028.

These recent contract wins, combined with progress in mission-critical defense and aerospace programs, position the company for continued revenue growth (mirroring the solid 15% year-over-year sales increase in 2024) and reinforce its role as a key player in advanced aviation technology development.

These factors are likely to have boosted investors’ confidence in this stock lately, as evident from its solid price performance over the past year.

Can ATRO Stock Keep Its Winning Streak Alive?

Astronics ended December 2024 with cash and cash equivalents of $18 million. While its long-term debt totaled $169 million as of 2024-end, its current debt was nil. So, it is safe to conclude that the stock boasts a solid solvency position in the near term, which, in turn, should enable ATRO to invest in new product innovation. After all, technological innovation is a major growth catalyst for stocks like ATRO, as both the commercial and defense aerospace markets increasingly thrive on next-gen solutions.

Looking ahead, we may expect these trends to continue to boost ATRO’s operational results, buoyed by an impressive global air travel outlook for next year, steadily increasing defense budget funding by the United States and other nations, along with growing hostility in the Middle East, fueling demand for military programs like FLRAA.

A quick sneak peek at ATRO’s near-term earnings and sales estimates reflects the same. 

ATRO’s Upbeat Earnings Estimates

The Zacks Consensus Estimate for ATRO’s 2025 sales suggests year-over-year growth of 3.6%, while that for 2026 sales indicates an improvement of 8.2%.

The 2025 and 2026 bottom-line estimates show a similar improving trend. Moreover, the upward revision in its yearly earnings estimate indicates that investors are gaining confidence in this stock’s earnings capabilities.

ATRO Stock Trading at a Discount

In terms of valuation, ATRO’s forward 12-month price-to-earnings (P/E) is 16.63X, a discount to its peer group’s average of 23.42X. This suggests that investors will be paying a lower price than the company's expected earnings growth compared to that of its peer group.

Risks to Consider Before Choosing ATRO

While growth opportunities in the global aerospace and defense space remain immense, some challenges persist, which investors should consider before investing in Astronics. Notably, the primary challenges that ATRO continues to face include varying levels of supply-chain pressures from the residual impacts of the COVID-19 pandemic, material availability and cost increases, and a rise in the cost of labor and labor availability, particularly skilled labor. These factors might cause a delay in delivering finished products from ATRO, which, in turn, may hurt its operational results.

Should You Buy ATRO Stock Now?

To conclude, investors interested in ATRO may add this stock to their portfolio, considering its discounted valuation, upbeat near-term sales estimates, impressive share price performance and upward revision in earnings estimates.

The company’s Zacks Rank #1 (Strong Buy) further supports our thesis. 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).

Zacks Investment Research