The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Astronics (NASDAQ: ATRO) and the rest of the aerospace stocks fared in Q1.
Aerospace companies often possess technical expertise and have made significant capital investments to produce complex products. It is an industry where innovation is important, and lately, emissions and automation are in focus, so companies that boast advances in these areas can take market share. On the other hand, demand for aerospace products can ebb and flow with economic cycles and geopolitical tensions, which can be particularly painful for companies with high fixed costs.
The 15 aerospace stocks we track reported a strong Q1. As a group, revenues missed analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 0.5% below.
Luckily, aerospace stocks have performed well with share prices up 19.7% on average since the latest earnings results.
Astronics (NASDAQ: ATRO)
Integrating power outlets into many Boeing aircraft, Astronics (NASDAQ: ATRO) is a provider of technologies and services to the global aerospace, defense, and electronics industries.
Astronics reported revenues of $205.9 million, up 11.3% year on year. This print exceeded analysts’ expectations by 7.3%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Astronics scored the biggest analyst estimates beat of the whole group. The stock is up 42.4% since reporting and currently trades at $33.44.
Is now the time to buy Astronics? Access our full analysis of the earnings results here, it’s free.
Best Q1: HEICO (NYSE: HEI)
Founded in 1957, HEICO (NYSE: HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.
HEICO reported revenues of $1.10 billion, up 14.9% year on year, outperforming analysts’ expectations by 3.5%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 10.6% since reporting. It currently trades at $303.35.
Is now the time to buy HEICO? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: AerSale (NASDAQ: ASLE)
Providing a one-stop shop that integrates multiple services and product offerings, AerSale (NASDAQ: ASLE) delivers full-service support to mid-life commercial aircraft.
AerSale reported revenues of $65.78 million, down 27.4% year on year, falling short of analysts’ expectations by 26.3%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
AerSale delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 17.6% since the results and currently trades at $5.79.
Read our full analysis of AerSale’s results here.
TransDigm (NYSE: TDG)
Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE: TDG) develops and manufactures components and systems for military and commercial aviation.
TransDigm reported revenues of $2.15 billion, up 12% year on year. This print came in 0.7% below analysts' expectations. Zooming out, it was a mixed quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but a slight miss of analysts’ organic revenue estimates.
The stock is flat since reporting and currently trades at $1,466.
Read our full, actionable report on TransDigm here, it’s free.
Redwire (NYSE: RDW)
Based in Jacksonville, Florida, Redwire (NYSE: RDW) is a provider of systems and components used in space infrastructure.
Redwire reported revenues of $61.4 million, down 30.1% year on year. This number missed analysts’ expectations by 16.5%. Taking a step back, it was still a strong quarter as it produced an impressive beat of analysts’ EPS estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Redwire pulled off the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is up 63.6% since reporting and currently trades at $18.49.
Read our full, actionable report on Redwire here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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