Astronics Corp (ATRO) Stock Analysis and Metrics

Astronics

NASDAQ: ATRO

$71.17 ▲ +0.98 (+1.40%)

At close: Jul 8, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap29.36 Mn

P/E0.65

P/S0.03

Div. Yield0.00

ROIC (Qtr)0.00

Total Debt (Qtr)334.89 Mn

Revenue Growth (1y) (Qtr)11.99

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About

Astronics Corporation is a leading provider of advanced technologies to the global aerospace defense and electronics industries. Our products and services include high performance electrical power generation distribution and motion systems lighting and safety systems avionics products systems certification aircraft structures and automated test systems. We have principal operations in the United States Canada France and Germany as well as engineering offices in Ukraine and India.

The company generates revenue by designing manufacturing and selling its products and providing related services to customers in the aerospace defense and electronics sectors. Its Aerospace segment supplies items such as lighting safety systems electrical power distribution seat motion systems aircraft structures avionics and certification services to airframe manufacturers suppliers airlines and defense agencies. The Test Systems segment earns revenue from the design development manufacture and maintenance of automated test systems used in aerospace defense communications mass transit and training simulation applications.

The company operates through the following segments: Aerospace and Test Systems.

• Aerospace segment designs and manufactures products for the global aerospace and defense industry including lighting and safety systems electrical power generation distribution and seat motion systems aircraft structures avionics products systems certification and other related offerings.

• Test Systems segment designs develops manufactures and maintains automated test systems that support aerospace defense communications mass transit and training simulation markets providing solutions to OEMs prime government contractors and other industrial customers.

Astronics Corporation holds a niche position as a specialized supplier of high performance electrical and test solutions competing against larger diversified electronics and aerospace firms by emphasizing innovation responsiveness and customer support. Its competitive advantages stem from deep engineering expertise a reputation for quality and the ability to deliver customized systems on schedule.

The company serves a diverse customer base that includes major airframe manufacturers such as The Boeing Company suppliers to those OEMs commercial airlines aircraft operators and various branches of the United States Department of Defense. Additional customers arise in the communications mass transit and training simulation sectors for its test systems.

Investment Thesis

▲ Bull case

Record bookings of $290,000,000 and an all time backlog of $734,000,000 demonstrate broad based demand across all product lines rather than reliance on a single large order. The bookings figure represents a new high for the company and shows that customers are increasing their orders across aerospace test systems and related markets. This widespread strength indicates that the growth is driven by fundamental trends such as rising aircraft production rates and increased demand for connectivity solutions. The resulting backlog provides strong visibility for future revenue and reduces the risk of short term fluctuations in order flow. Investors should view the all time high backlog as a leading indicator that the current growth trajectory is sustainable over the next several years.
IFEC sales rose to $110,700,000 representing over 48% of total revenue showing the continued importance of the connectivity and entertainment market. Seat motion sales surged nearly 200% to $13,200,000 aided by the BMA acquisition reflecting the growing demand for premium seating in long haul aircraft. Both trends are underpinned by airline passengers desire to stay connected entertained and powered throughout their flights. The aerospace segment benefits from a balanced mix of new aircraft production and retrofit activity which provides stability across cycles. As a result the company is well positioned to capture double digit growth in its aerospace business for the foreseeable future.
The U.S. Army has issued a purchase order for $44,700,000 to initiate full rate production of the TS 4549 T Radio Test Sets Program. This order confirms the imminent rollout of a contract that management has highlighted as a near term catalyst for the test systems business. Management expects the order to contribute $20,000,000 in the second half of 2026 and to reach an annual run rate of $40,000,000 to $50,000,000 once full production is achieved. Such a contribution would represent a meaningful increase in revenue for a segment that has historically operated near break even. The successful execution of this program could materially improve Test Systems profitability and drive overall earnings growth.
Adjusted EBITDA margin expanded 150 basis points to 16.4% and adjusted operating margin rose 180 basis points to 12.8%. These improvements were driven by higher volume leverage productivity gains and the $2,800,000 MV 75 program adjustment which added about 120 basis points to gross margin. The company notes that litigation related costs have declined significantly providing additional support to operating results. Management indicates that further margin improvement is achievable as operating leverage increases with rising sales and as cost controls remain effective. Investors should expect the margin expansion trend to continue provided that volume growth persists and one time adjustments do not reverse.
The company anticipates releasing the valuation allowance on its deferred tax assets in the coming quarters. This release would generate a significant one time tax benefit upon recognition which could boost net income substantially. The benefit is not yet reflected in current earnings estimates and represents an upside that the market may be underestimating. The release is contingent on demonstrating sufficient earnings power to utilize the deferred tax assets which the company believes it has achieved. When realized the tax benefit could provide a meaningful increase to earnings per share and improve overall profitability metrics.

Record bookings of $290,000,000 and an all time backlog of $734,000,000 demonstrate broad based demand across all product lines rather than reliance on a single large order. The bookings figure represents a new high for the company and shows that customers are increasing their orders across aerospace test systems and related markets. This widespread strength indicates that the growth is driven by fundamental trends such as rising aircraft production rates and increased demand for connectivity solutions. The resulting backlog provides strong visibility for future revenue and reduces the risk of short term fluctuations in order flow. Investors should view the all time high backlog as a leading indicator that the current growth trajectory is sustainable over the next several years.
IFEC sales rose to $110,700,000 representing over 48% of total revenue showing the continued importance of the connectivity and entertainment market. Seat motion sales surged nearly 200% to $13,200,000 aided by the BMA acquisition reflecting the growing demand for premium seating in long haul aircraft. Both trends are underpinned by airline passengers desire to stay connected entertained and powered throughout their flights. The aerospace segment benefits from a balanced mix of new aircraft production and retrofit activity which provides stability across cycles. As a result the company is well positioned to capture double digit growth in its aerospace business for the foreseeable future.
The U.S. Army has issued a purchase order for $44,700,000 to initiate full rate production of the TS 4549 T Radio Test Sets Program. This order confirms the imminent rollout of a contract that management has highlighted as a near term catalyst for the test systems business. Management expects the order to contribute $20,000,000 in the second half of 2026 and to reach an annual run rate of $40,000,000 to $50,000,000 once full production is achieved. Such a contribution would represent a meaningful increase in revenue for a segment that has historically operated near break even. The successful execution of this program could materially improve Test Systems profitability and drive overall earnings growth.
Adjusted EBITDA margin expanded 150 basis points to 16.4% and adjusted operating margin rose 180 basis points to 12.8%. These improvements were driven by higher volume leverage productivity gains and the $2,800,000 MV 75 program adjustment which added about 120 basis points to gross margin. The company notes that litigation related costs have declined significantly providing additional support to operating results. Management indicates that further margin improvement is achievable as operating leverage increases with rising sales and as cost controls remain effective. Investors should expect the margin expansion trend to continue provided that volume growth persists and one time adjustments do not reverse.
The company anticipates releasing the valuation allowance on its deferred tax assets in the coming quarters. This release would generate a significant one time tax benefit upon recognition which could boost net income substantially. The benefit is not yet reflected in current earnings estimates and represents an upside that the market may be underestimating. The release is contingent on demonstrating sufficient earnings power to utilize the deferred tax assets which the company believes it has achieved. When realized the tax benefit could provide a meaningful increase to earnings per share and improve overall profitability metrics.

▼ Bear case

Tariff expenses increased nearly $2,000,000 year over year with no refund benefit recognized yet. This increase represents a persistent cost headwind that directly impacts gross margin and operating profitability. The company has not yet booked any potential refunds for tariffs leaving the benefit uncertain and dependent on future trade policy developments. If trade policies remain unfavorable or if recoveries are delayed the margin pressure could continue for several quarters. Investors should monitor tariff developments as they could erode the gains achieved through volume leverage and cost controls.
The reported margin expansion was partially boosted by a $2,800,000 one time MV 75 program adjustment. This adjustment added about 120 basis points to gross margin and contributed to the overall improvement in profitability metrics. Excluding this one time benefit the underlying operating performance shows a more modest improvement suggesting that core profitability may be less robust than headline numbers indicate. Future quarters may not see a similar boost if the MV 75 program adjustment does not repeat. Consequently investors should be cautious about assuming that the current margin trajectory will continue without additional one time gains.
Capital expenditures rose sharply to $11,200,000 in the quarter and full year guidance calls for $40,000,000 to $45,000,000. This elevated spending reflects the Seattle facility consolidation and catch up investments on previously deferred projects. The increase in capex combined with rising inventory and working capital to support growth could pressure free cash flow in the near term. Higher cash outflows may limit the company’s ability to fund additional initiatives or to return capital to shareholders. Investors should watch cash flow trends to ensure that the investment program does not create liquidity strain.
Total debt remains elevated at $334,900,000. While interest expense has declined to $2,300,000 following the September 2025 refinancing the absolute debt level still represents a significant financial obligation. Any increase in interest rates or tightening of credit conditions could raise financing costs and constrain the company’s flexibility. Elevated leverage may also limit the capacity to pursue additional acquisitions or to invest in growth initiatives without breaching covenants. Investors should consider the debt profile when assessing the risk reward profile of the stock.
Test Systems segment continues to operate near break even with segment operating profit of only $400,000. This low level of profitability indicates that the segment has not yet achieved sustainable earnings power on its own. Management has indicated that future profitability is contingent on the successful ramp of the Army radio test program. Execution risks in volume ramp up or delays in order receipt could postpone the anticipated contribution to earnings and keep the segment in a loss or low profit state. Until the program contributes meaningfully investors should view Test Systems as a marginal contributor to overall earnings.

Tariff expenses increased nearly $2,000,000 year over year with no refund benefit recognized yet. This increase represents a persistent cost headwind that directly impacts gross margin and operating profitability. The company has not yet booked any potential refunds for tariffs leaving the benefit uncertain and dependent on future trade policy developments. If trade policies remain unfavorable or if recoveries are delayed the margin pressure could continue for several quarters. Investors should monitor tariff developments as they could erode the gains achieved through volume leverage and cost controls.
The reported margin expansion was partially boosted by a $2,800,000 one time MV 75 program adjustment. This adjustment added about 120 basis points to gross margin and contributed to the overall improvement in profitability metrics. Excluding this one time benefit the underlying operating performance shows a more modest improvement suggesting that core profitability may be less robust than headline numbers indicate. Future quarters may not see a similar boost if the MV 75 program adjustment does not repeat. Consequently investors should be cautious about assuming that the current margin trajectory will continue without additional one time gains.
Capital expenditures rose sharply to $11,200,000 in the quarter and full year guidance calls for $40,000,000 to $45,000,000. This elevated spending reflects the Seattle facility consolidation and catch up investments on previously deferred projects. The increase in capex combined with rising inventory and working capital to support growth could pressure free cash flow in the near term. Higher cash outflows may limit the company’s ability to fund additional initiatives or to return capital to shareholders. Investors should watch cash flow trends to ensure that the investment program does not create liquidity strain.
Total debt remains elevated at $334,900,000. While interest expense has declined to $2,300,000 following the September 2025 refinancing the absolute debt level still represents a significant financial obligation. Any increase in interest rates or tightening of credit conditions could raise financing costs and constrain the company’s flexibility. Elevated leverage may also limit the capacity to pursue additional acquisitions or to invest in growth initiatives without breaching covenants. Investors should consider the debt profile when assessing the risk reward profile of the stock.
Test Systems segment continues to operate near break even with segment operating profit of only $400,000. This low level of profitability indicates that the segment has not yet achieved sustainable earnings power on its own. Management has indicated that future profitability is contingent on the successful ramp of the Army radio test program. Execution risks in volume ramp up or delays in order receipt could postpone the anticipated contribution to earnings and keep the segment in a loss or low profit state. Until the program contributes meaningfully investors should view Test Systems as a marginal contributor to overall earnings.

Subsegments Breakdown of Revenue (2025)

Peer Comparison

Companies in the Aerospace & Defense

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	BA	Boeing Co	1,106.33 Bn	575.32	12.00	47.21 Bn
2	RTX	RTX Corp	258.51 Bn	34.01	2.86	33.20 Bn
3	GD	General Dynamics Corp	174.86 Bn	40.28	3.25	8.01 Bn
4	LMT	Lockheed Martin Corp	119.99 Bn	25.03	1.60	20.70 Bn
5	HWM	Howmet Aerospace Inc.	107.26 Bn	61.54	12.44	4.69 Bn
6	TDG	TransDigm Group INC	76.18 Bn	40.87	8.02	31.28 Bn
7	NOC	Northrop Grumman Corp /De/	73.88 Bn	16.14	1.74	14.41 Bn
8	RKLB	Rocket Lab Corp	60.59 Bn	-331.77	89.15	0.00 Bn

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Investment Thesis

Geographical Breakdown of Revenue (2025)

Subsegments Breakdown of Revenue (2025)

Peer Comparison

Research Tools

Developers

About

Investment Thesis

Geographical Breakdown of Revenue (2025)

Subsegments Breakdown of Revenue (2025)

Peer Comparison

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