Bull of the Day: Astronics (ATRO)

Many aerospace and defense-related stocks have continued to etch out new highs amid ongoing global conflicts, including the Russia-Ukraine war and the Iran-Israel war.

While these conflicts are heartbreaking and unfortunate, the necessary need for increased aerospace and defense spending lands Astronics stock ATRO the Zacks Bull of the Day for the second time in just over two months.

As a manufacturer of specialized lighting and electronics for jets and other airplanes, including military aircraft,  Astronics most recently held the Bull of the Day on April 9th, and has seen its stock skyrocket over +50% since then, as shown in the price performance chart below. Notably, ATRO is now sitting on gains of over +100% in 2025.

Innovative Products & Record-Breaking Backlog

Astronics’ defense aircraft products are being increasingly integrated into both manned and unmanned aerial systems (UAS), including drones used for surveillance and specialized missions.

Seeing a record backlog worth $673 million at the end of Q1, some of Astronics’ noteworthy and renowned clients include Lockheed Martin LMT and RTX Corporation RTX, along with the U.S. military branches.

Outside of its aerospace defense offerings, Astronics has also released innovative products for commercial aviation, including the SkyShow Server 4K in-flight entertainment system, and the award-winning EmPower UltraLite G2 power system, a next-generation in-seat power system that is expected to be a game changer for airline passengers.

Astronics' Attractive Valuation  

Echoing Astronics' Zacks Rank #1 (Strong Buy) rating is that despite posting unprecedented gains this year, ATRO still trades at a far more reasonable valuation than most aerospace defense stocks, which investors have been willing to pay a noticeable premium for.

Trading near its 52-week high of $35 a share, ATRO still trades at a reasonable 22.9X forward earnings multiple. This is slightly beneath the benchmark S&P 500’s average and offers a steep discount to its Zacks Aerospace-Defense Equipment Industry average of 51.7X, which includes other top-performing stocks this year, such as Elbit Systems ESLT and Bae Systems BAESY. 

Plus, ATRO trades under the optimum level of less than 2X forward sales compared to its industry average of 9.8X and the S&P 500’s 5.2X.

ATRO EPS Revisions

Most important to triggering Atronics' strong buy rating is that fiscal 2025 EPS estimates have spiked over 30% in the last 60 days to $1.50 from $1.13. Plus, FY26 EPS estimates are up nearly 6% in the last two months, with Astronics expected to post high double-digit bottom-line growth for the foreseeable future.

Conclusion & Final Thoughts

Astronics is one of the most intriguing companies to invest in when considering aerospace and defense stocks that have shown promising growth but could still have more upside.

Optimistically, the affordable stock price and reasonable valuation of  ATRO also makes it a prime buy-the-dip target compared to its peers, with it noteworthy that institutional ownership of Astronics shares has ballooned to over 70%, signaling credibility and long-term confidence.

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

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