ATRO

Astronics' FY2025 results mark a genuine inflection: revenue grew to $862M (+8.4%), operating income jumped to $76.4M (+188.7%), and the company swung from a $16.2M loss in FY2024 to $29.4M of net income — its first profit after four consecutive loss years. Operating cash flow of $74.8M (+144.7%) and a 21.0% ROE suggest the aerospace-recovery thesis is working as Boeing/Airbus build rates normalize and cabin/lighting/power content ramps. Gross margin expanded to 29.9% and operating margin to 8.9%, both healthy for an aerospace supplier with two consecutive years of double-digit revenue growth.

The problem is what you pay for it. At $84.86, the stock trades at 104.8x trailing diluted EPS and 3.2x sales — pricing in years of further margin expansion against a business whose own MD&A flags 'varying levels of supply chain pressures, material availability and cost increases (including costs associated with the imposition of tariffs)' and labor availability as ongoing headwinds. Net margin is still only 3.4%; even doubling earnings leaves the multiple stretched. Capex more than tripled to $31.7M as the company invests for the cycle, which is rational but limits free cash flow.