Here's How Astronics Can Retain Revenue Momentum Over the Long Term

Astronics Corporation ATRO has delivered steadily improving revenue growth, driven by recovering aerospace demand, a strong product portfolio, disciplined execution and structural enhancements, achieving an approximate 18% four-year CAGR by 2025. It expects 2026 revenues between $950 million and $990 million, up 13% year over year at midpoint.

Revenue growth at Astronics is anchored by its dominant Aerospace segment, which accounted for 92% of total revenues in 2025 and remains the primary driver of backlog visibility. Demand conditions are favorable across both defense and commercial aerospace markets. Rising global defense spending is supporting military aircraft programs, while increasing air travel is prompting airlines to invest in cabin upgrades, such as in-seat power and in-flight connectivity—core areas of Astronics’ product strength.

The Test Systems segment, while smaller, is gradually becoming a meaningful contributor to long-term growth. It is well-positioned to benefit from structural tailwinds in defense modernization, aerospace expansion and advanced electronics testing. Increasing government investment in next-generation defense platforms and space technologies is expected to further support demand for these capabilities.

Operational execution has also improved significantly. The company has expanded margins through higher volumes, pricing initiatives and productivity gains. Strategic actions, including facility rationalization, portfolio simplification and restructuring efforts, have enhanced efficiency and scalability.

Strong bookings and growing backlog provide additional support for future revenues. Aerospace backlog reached $572.5 million, up 6.5% year over year, while Test Systems backlog rose 19.5% to $74 million, indicating solid demand visibility.

Overall, robust backlog, improved operational leverage and strong positioning in high-value aerospace subsystems leave Astronics well placed to sustain its revenue growth momentum.

What About ATRO’s Peers?

Revenue growth at Kratos Defense & Security Solutions KTOS is driven by Kratos Government Solutions, delivering advanced electronics, C5ISR and missile defense systems. The Unmanned Systems segment of Kratos Defense & Security (21.7% of sales) benefits from strong target drone demand and contract wins. Sustained defense spending and program execution should help maintain momentum at Kratos Defense & Security.

The Space Systems segment is pivotal to Rocket Lab's RKLB top line, providing satellite components, spacecraft platforms and integrated mission services. By expanding Space Systems, Rocket Lab deepens vertical integration, boosts recurring revenues and supports its long-term expansion strategy.

ATRO’s Price Performance

Shares of Astronics have gained 26.7% year to date, outperforming the industry.

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ATRO’s Discounted Valuation

The stock is undervalued compared with its industry. It is currently trading at a price-to-sales multiple of 2.49, lower than the industry average of 11.94.

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Estimate Movement for ATRO

The Zacks Consensus Estimate for ATRO’s first-quarter 2026 EPS has moved 11.3% south in the past 30 days, while that for the second quarter has moved 1.5% north in the same time frame. The consensus estimate for 2026 and 2027 EPS has moved 2.7% and 7.2% north, respectively, in the same time frame.

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The consensus estimates for ATRO’s 2026 and 2027 revenues and EPS indicate year-over-year increases.

ATRO stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Astronics Corporation (ATRO): Free Stock Analysis Report

Kratos Defense & Security Solutions, Inc. (KTOS): Free Stock Analysis Report

Rocket Lab Corporation (RKLB): Free Stock Analysis Report

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

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