Astronics signs supply agreement with Vertical Aerospace for Valo aircraft
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Source: seekingalpha
Astronics Corp's stock fell 6.29% as it crossed below the 20-day SMA amid a broader market decline, with the Nasdaq-100 down 1.56% and the S&P 500 down 0.18%.
The company has signed a long-term agreement with Vertical Aerospace to supply a low-voltage power distribution system for the Valo electric vertical take-off and landing aircraft. This agreement is expected to enhance Vertical's competitive position in the market and facilitate its path towards certification and scaled production, as it integrates Astronics' technology into its flight test aircraft.
This collaboration not only strengthens Vertical's supplier ecosystem but also indicates a robust market outlook with approximately 1,500 pre-orders for the Valo aircraft. The partnership showcases Astronics' technological expertise in electric aviation, which could lead to future growth opportunities.
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Analyst Views on ATRO
Wall Street analysts forecast ATRO stock price to fall
3 Analyst Rating
3 Buy
0 Hold
0 Sell
Strong Buy
Current: 76.060
Low
65.00
Averages
70.00
High
75.00
Current: 76.060
Low
65.00
Averages
70.00
High
75.00
About ATRO
Astronics Corporation is a provider of advanced technologies to the global aerospace, defense, and electronics industries. The Company’s products and services include advanced electrical power generation, distribution and seat motion systems, lighting and safety systems, avionics products, systems and certification, aircraft structures and automated test systems. The Company’s segments include Aerospace and Test Systems. The Aerospace segment designs and manufactures products for the global aerospace and defense industry. The Test Systems segment designs, develops, manufactures and maintains automated test systems that support the aerospace and defense, communications and mass transit industries as well as training and simulation devices for both commercial and military applications. It also offers FAA Organization Designation Authorization (ODA) services. Its products and solutions also include emergency systems, lighting systems, and seat actuation systems.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Growing Market Demand: As airlines and cargo carriers opt to extend the service life of existing fleets through avionics upgrades due to rising replacement costs, ISSC's expanded product portfolio positions it to better participate in larger retrofit programs, addressing increasing market demand.
- Internal Management Advantages: By managing the entire product lifecycle internally—from engineering and manufacturing to testing, certification, and aftermarket support—ISSC ensures tighter quality control and greater production flexibility, thereby improving supply chain management capabilities.
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- Strengthened Supply Agreement: Astronics has signed a long-term agreement with Vertical Aerospace to supply the low-voltage power distribution system for the Valo electric vertical take-off and landing aircraft, ensuring effective power management and protection for critical systems, thus advancing Vertical towards certification and scaled production.
- Technical Integration Advantage: The power distribution system from Astronics converts high-voltage power into low-voltage power and has already been integrated into Vertical's flight test aircraft, showcasing its deep technological expertise in electric aviation and enhancing Vertical's competitive position in the market.
- Ecosystem Enhancement: This agreement strengthens Vertical's supplier ecosystem, which includes leading suppliers like Honeywell and Aciturri, ensuring that Valo's key systems are supported by efficient and reliable technologies, facilitating a smoother market entry.
- Robust Market Outlook: Vertical has secured approximately 1,500 pre-orders for Valo, with customers across four continents, indicating strong demand in the electric aviation market, and the collaboration with Astronics is expected to accelerate the product's time to market.
See More
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See More
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- Voting Rights Differentiation: Class B Stock carries ten votes per share compared to one vote for Common Stock, and while both have equivalent economic value, Class B shares are non-tradable but can be converted into tradable Common Stock at no cost, providing shareholders with flexibility.
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See More
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See More
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- Business Transformation: ISSC has successfully transitioned from an avionics specialist to a provider of end-to-end cockpit solutions by acquiring Honeywell's autopilot product portfolio and Moog S-TEC Model 3100 autopilot business, significantly enhancing its technological capabilities.
- Growing Market Demand: As airlines and cargo carriers opt to extend the service life of existing fleets through avionics upgrades due to rising replacement costs, ISSC's expanded product portfolio positions it to better participate in larger retrofit programs, addressing increasing market demand.
- Internal Management Advantages: By managing the entire product lifecycle internally—from engineering and manufacturing to testing, certification, and aftermarket support—ISSC ensures tighter quality control and greater production flexibility, thereby improving supply chain management capabilities.
- Future Growth Potential: Management believes that combining strategic acquisitions with ongoing in-house innovation will expand ISSC's addressable market across commercial, military, and special mission aircraft, supporting larger contract wins and a growing stream of aftermarket revenues.
See More
Astronics to Supply Low-Voltage Power System for Vertical's Valo Aircraft
- Strengthened Supply Agreement: Astronics has signed a long-term agreement with Vertical Aerospace to supply the low-voltage power distribution system for the Valo electric vertical take-off and landing aircraft, ensuring effective power management and protection for critical systems, thus advancing Vertical towards certification and scaled production.
- Technical Integration Advantage: The power distribution system from Astronics converts high-voltage power into low-voltage power and has already been integrated into Vertical's flight test aircraft, showcasing its deep technological expertise in electric aviation and enhancing Vertical's competitive position in the market.
- Ecosystem Enhancement: This agreement strengthens Vertical's supplier ecosystem, which includes leading suppliers like Honeywell and Aciturri, ensuring that Valo's key systems are supported by efficient and reliable technologies, facilitating a smoother market entry.
- Robust Market Outlook: Vertical has secured approximately 1,500 pre-orders for Valo, with customers across four continents, indicating strong demand in the electric aviation market, and the collaboration with Astronics is expected to accelerate the product's time to market.
See More
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- Market Rebound Signal: On Friday, BMO, Astronics, DaVita, and Intercorp Financial all reached new stock highs, indicating signs of market stabilization and recovery after recent volatility, which may attract more investor interest.
- BMO's Strong Performance: As one of Canada's largest banks, BMO's stock increase reflects its robust financial performance and market confidence, potentially further boosting its market share in the financial services sector.
- Astronics Growth Momentum: The new high in Astronics' stock price indicates sustained demand in the aerospace electronics and power systems sectors, enhancing the company's competitiveness in the recovering aviation industry.
- DaVita and Intercorp's Market Performance: The stock price increases for DaVita and Intercorp Financial demonstrate a strong recovery in the healthcare and financial services industries, potentially providing new investment opportunities for investors.
See More
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- Significant Revenue Growth: Astronics reported Q1 revenues of $230.6 million, marking a 12% year-over-year increase that exceeded analysts' expectations by 1.2%, showcasing the company's strong performance and sustained demand in the aerospace market.
- High Adjusted EBITDA: The company achieved an adjusted EBITDA margin of 16.4%, driven by improved operational execution and higher volumes, indicating effective strategies in cost control and profitability.
- Record Bookings and Backlog: Astronics' record bookings and backlog highlight robust market demand, particularly in aerospace and testing sectors, with expectations for a noticeable uptick in activity levels in the coming quarters, further solidifying its market position.
- Stock Price Recovery: Since the earnings report, Astronics' stock has risen by 6.8%, currently trading at $83.61, reflecting investor confidence in the company's growth potential moving forward.
See More
Astronics Announces 20% Stock Distribution Plan
- Stock Distribution Plan: Astronics Corporation announced a 20% stock distribution of Class B Stock to both Common and Class B shareholders, providing one Class B share for every five shares held, with distribution expected around June 29, 2026, aimed at enhancing long-term shareholder interest.
- Historical Distribution Tradition: Since the initial distribution of Class B Stock in 1987, Astronics has conducted 15 distributions, furthering the company's commitment to rewarding shareholders and emphasizing its focus on shareholder value.
- Voting Rights Differentiation: Class B Stock carries ten votes per share compared to one vote for Common Stock, and while both have equivalent economic value, Class B shares are non-tradable but can be converted into tradable Common Stock at no cost, providing shareholders with flexibility.
- Market Reaction Expectations: The distribution is expected to result in approximately 32.1 million Common shares and 10.9 million Class B shares outstanding post-distribution, potentially increasing market attention on Astronics and solidifying its position in the aerospace and defense sectors.
See More
Astronics Secures $44.7 Million U.S. Army Order
- Significant Order Value: The U.S. Army has issued a $44.7 million purchase order to Astronics Test Systems, marking the initiation of full-rate production for the TS-4549/T Radio Test Sets Program, which is expected to enhance the company's revenue stream over the next 20 months.
- Contract Background: The program was originally awarded an Indefinite Delivery, Indefinite Quantity (IDIQ) contract in June 2024, with initial funding of $215 million, of which $145 million remains, indicating the project's long-term value and potential.
- Production Challenges and Readiness: Jim Mulato, President of Astronics Test Systems, stated that while ramping up production volume will be challenging, the team is prepared, aiming to execute the current order efficiently, thereby paving the way for additional future production orders and demonstrating responsiveness to customer needs.
- Strategic Development Focus: Astronics aims to enhance its market value by developing innovative technologies and capabilities, having collaborated closely with clients in the aerospace, defense, and other critical industries for over 50 years, showcasing its ability to solve complex challenges.
See More
