Blue Bird (BLBD - Free Report) ended the recent trading session at $62.97, demonstrating a +1.96% change from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily loss of 0.24%. Meanwhile, the Dow experienced a drop of 0.01%, and the technology-dominated Nasdaq saw a decrease of 0.26%.
The stock of school bus maker has risen by 15.59% in the past month, leading the Auto-Tires-Trucks sector's gain of 2.91% and the S&P 500's gain of 6.42%.
Investors will be eagerly watching for the performance of Blue Bird in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.81, marking a 15.63% fall compared to the same quarter of the previous year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $4.56 per share and a revenue of $0 million, signifying shifts of +4.11% and 0%, respectively, from the last year.
It is also important to note the recent changes to analyst estimates for Blue Bird. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Currently, Blue Bird is carrying a Zacks Rank of #3 (Hold).
Digging into valuation, Blue Bird currently has a Forward P/E ratio of 13.56. This valuation marks a discount compared to its industry average Forward P/E of 16.46.
It's also important to note that BLBD currently trades at a PEG ratio of 2.28. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Automotive - Domestic industry had an average PEG ratio of 1.06 as trading concluded yesterday.
The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. With its current Zacks Industry Rank of 191, this industry ranks in the bottom 22% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
MACON, Ga.--(BUSINESS WIRE)--Blue Bird Corporation (Nasdaq: BLBD), the leader in electric and cleaner-emission school buses, will release its fiscal 2026 second quarter results on May 6, 2026. The public is invited to attend an audio webcast in which Blue Bird executives John Wyskiel, President and CEO, and Razvan Radulescu, CFO, will discuss results. This webcast will take place at 4:30PM ET on May 6, 2026. A slide presentation will be available to support the webcast. Dial-in details and the.
In partnership with Highland Electric Fleets and Blue Bird Corporation, the district will deploy buses and charging infrastructure to support daily operations
, /PRNewswire/ -- Bibb County School District will introduce 15 electric school buses and support charging infrastructure, marking the district's first step toward fleet electrification. Fifteen Type C electric school buses manufactured by Blue Bird Corporation will be deployed as part of a broader effort to strengthen day-to-day fleet operations. Highland Electric Fleets is supporting the charging infrastructure and managing daily charging to help ensure the fleet is ready for regular routes without requiring additional oversight from district staff.
Bibb County School District
Blue Bird Corporation (PRNewsfoto/Highland Electric Fleets) Blue Bird, headquartered in Macon, has been manufacturing school buses in Georgia for nearly a century and is known for its focus on safety, durability, and reliability. The company is a leader in alternative-powered school transportation, with more than 25,000 propane, natural gas, and electric buses in operation across North America. Its electric buses are designed to meet the demands of daily routes while incorporating advanced battery and drivetrain technology.
"Bibb County School District's investment in electric buses demonstrates its commitment to cleaner, safer student transportation," said Albert Burleigh, vice president of bus sales in North America for Blue Bird. "These buses not only enhance the health of students and the community but also provide exceptional performance and long-term cost savings."
The buses are expected to provide a more comfortable ride for students, with electric models up to four times quieter than diesel, helping create a calmer environment on the way to and from school. They also reduce exposure to diesel exhaust, improving air quality inside the bus. With fewer moving parts than traditional vehicles, electric buses can help lower maintenance costs over time while offering more predictable day-to-day operations.
"Having these chargers on our property will create an ease of access for our drivers to make sure these buses remain fully available for our students and our schools," said Anthony Jackson, Executive Director of Transportation, Bibb County School District. "This provides the only available option for refueling without the fumes and mess of other alternatives."
"At Highland, our mission is to make the health and operational benefits of electric school buses more accessible and affordable for every community," said Duncan McIntyre, CEO of Highland Electric Fleets. "Replacing just five diesel buses with electric ones can reduce the risk of pediatric asthma for approximately 1,500 students. Students riding electric buses are also exposed to cleaner air, which has been linked to improved attendance and better focus in the classroom."
Bibb County School District will host a ribbon-cutting event on April 23 at 11:00 a.m. at the district's bus depot, located at 4580 Cavalier Drive in Macon. Following the event, district officials and project partners will be available for media interviews and attendees will be invited to take a ride on one of the electric school buses.
About Bibb County School District
The Bibb County School District maximizes student achievement and social-emotional well-being by building a sense of community in safe, equitable learning environments. Students are empowered to learn, lead, innovate, and serve as productive and caring citizens within their chosen paths of success.
About Blue Bird Corporation
Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. School buses carry the most precious cargo in the world – 25 million children twice a day – making them the most trusted mode of student transportation. The company is the proven leader in low- and zero-emission school buses with more than 25,000 propane, natural gas, and electric powered buses sold. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird's complete product and service portfolio, visit www.blue-bird.com.
About Highland Electric Fleets
Highland Electric Fleets is North America's leading provider of Electrification-as-a-Service. Founded in 2019, Highland partners with school districts, municipalities, and fleet operators to make the transition to electric fleets simple and affordable. Highland proudly serves as the Official Electric School Bus Provider of the LA28 Olympic and Paralympic Games and Team USA. From pioneering vehicle-to-grid technology to managing some of the nation's largest electric school bus fleets, Highland delivers reliable, cost-effective solutions that support local communities and drive the future of transportation. Learn more at www.highlandfleets.com.
Media Contacts
Chris Orlando
Highland Electric Fleets
[email protected]
In the latest trading session, Blue Bird (BLBD - Free Report) closed at $62.93, marking a -2.37% move from the previous day. This change lagged the S&P 500's 0.49% loss on the day. On the other hand, the Dow registered a loss of 0.05%, and the technology-centric Nasdaq decreased by 0.9%.
The stock of school bus maker has risen by 18.45% in the past month, leading the Auto-Tires-Trucks sector's gain of 5.12% and the S&P 500's gain of 12.8%.
Investors will be eagerly watching for the performance of Blue Bird in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on May 6, 2026. The company's earnings per share (EPS) are projected to be $0.81, reflecting a 15.63% decrease from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $4.56 per share and a revenue of $0 million, demonstrating changes of +4.11% and 0%, respectively, from the preceding year.
Investors should also pay attention to any latest changes in analyst estimates for Blue Bird. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Blue Bird is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, Blue Bird is presently being traded at a Forward P/E ratio of 14.15. This valuation marks a discount compared to its industry average Forward P/E of 15.65.
Investors should also note that BLBD has a PEG ratio of 2.38 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. As the market closed yesterday, the Automotive - Domestic industry was having an average PEG ratio of 1.06.
The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. With its current Zacks Industry Rank of 95, this industry ranks in the top 39% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Blue Bird (BLBD - Free Report) .
Blue Bird currently has an average brokerage recommendation (ABR) of 1.38, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by eight brokerage firms. An ABR of 1.38 approximates between Strong Buy and Buy.
Of the eight recommendations that derive the current ABR, six are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 75% and 12.5% of all recommendations.
Brokerage Recommendation Trends for BLBD
Check price target & stock forecast for Blue Bird here>>>
While the ABR calls for buying Blue Bird, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Should You Invest in BLBD?Looking at the earnings estimate revisions for Blue Bird, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $4.56.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Blue Bird. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Blue Bird.
Blue Bird (BLBD - Free Report) closed at $63.20 in the latest trading session, marking a -1.42% move from the prior day. This move lagged the S&P 500's daily gain of 0.29%. At the same time, the Dow lost 0.31%, and the tech-heavy Nasdaq gained 0.89%.
Shares of the school bus maker have appreciated by 9.35% over the course of the past month, outperforming the Auto-Tires-Trucks sector's gain of 2.86%, and lagging the S&P 500's gain of 10.54%.
The investment community will be closely monitoring the performance of Blue Bird in its forthcoming earnings report. The company is scheduled to release its earnings on May 6, 2026. On that day, Blue Bird is projected to report earnings of $0.81 per share, which would represent a year-over-year decline of 15.63%.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.56 per share and revenue of $0 million. These totals would mark changes of +4.11% and 0%, respectively, from last year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Blue Bird. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. At present, Blue Bird boasts a Zacks Rank of #3 (Hold).
Investors should also note Blue Bird's current valuation metrics, including its Forward P/E ratio of 14.07. This denotes a discount relative to the industry average Forward P/E of 16.14.
We can also see that BLBD currently has a PEG ratio of 2.37. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Automotive - Domestic industry had an average PEG ratio of 1.1.
The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 69, putting it in the top 29% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
District begins transition to electric buses with charging infrastructure in partnership with Highland Electric Fleets
, /PRNewswire/ -- Rio Bravo-Greeley Union School District will break ground on a new electric school bus initiative, marking an early step in a transition to electric student transportation supported by on-site charging infrastructure. The project is being delivered in partnership with Highland Electric Fleets, North America's leading provider of Electrification-as-a-Service (EaaS), which will provide the electric buses, charging infrastructure, and ongoing support as part of a long-term electrification program. This effort reflects the district's focus on maintaining reliable, consistent service for students while beginning to integrate new technology into daily operations.
Rio Bravo-Greeley Union School District The district plans to deploy eight Blue Bird Corporation electric school buses as part of this initiative, with a dedicated charging depot currently under development and expected to be completed in early 2027. Charging infrastructure is being designed around the district's transportation schedule, ensuring buses are ready for daily routes once the site is complete while allowing for future expansion as the fleet grows.
"Our priority is always the safety, health, and reliability of the services we provide to our students," said Jennifer Hedge, District Superintendent, Rio Bravo-Greeley USD. "This project allows us to thoughtfully modernize our transportation program while maintaining the consistency families depend on. By investing in electric buses and on-site infrastructure, we are taking a responsible step toward cleaner air, more efficient operations, and a stronger future for our school community."
Electric school buses help improve the in-cabin environment for students and staff during daily rides while reducing overall emissions across the district's transportation system. With fewer moving parts than traditional diesel vehicles, electric buses can reduce long-term maintenance needs and help districts avoid fuel price volatility, supporting more predictable operations over time.
"This is the next step in Rio Bravo-Greeley's electrification journey," said Brian Buccella, Chief Commercial Officer, Highland Electric Fleets. "As these buses come online, they will reduce students' exposure to air pollution by up to 16%, leading to a quieter ride and a healthier environment inside the bus."
Rio Bravo-Greeley Union School District will host a groundbreaking ceremony on May 6 at 10:00 a.m. at 6521 Enos Lane, Bakersfield, CA, where district leaders, project partners, and community stakeholders will gather to mark the milestone. The media will have the opportunity to attend, with interviews and on-site access.
About Rio Bravo-Greeley Union School District
Since 1891, the heritage of the Rio Bravo-Greeley Union School District has passed from one generation to another, and today that century-old tradition continues in the hands of the community it serves.
The Rio Bravo-Greeley School District Educational Foundation, established in 1991, helps fund and support educational programs and activities within the district. The foundation supports programs, materials, and activities that significantly enhance the quality of education students receive.
About Blue Bird Corporation
Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. School buses carry the most precious cargo in the world – 25 million children twice a day – making them the most trusted mode of student transportation. The company is the proven leader in low- and zero-emission school buses with more than 25,000 propane, natural gas, and electric powered buses sold. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird's complete product and service portfolio, visit www.blue-bird.com.
About Highland Electric Fleets
Highland Electric Fleets is North America's leading provider of Electrification-as-a-Service. Founded in 2019, Highland partners with school districts, municipalities, and fleet operators to make the transition to electric fleets simple and affordable. Highland proudly serves as the Official Electric School Bus Provider of the LA28 Olympic and Paralympic Games and Team USA. From pioneering vehicle-to-grid technology to managing some of the nation's largest electric school bus fleets, Highland delivers reliable, cost-effective solutions that support local communities and drive the future of transportation. Learn more at www.highlandfleets.com.
Media Contacts
Chris Orlando
Highland Electric Fleets
[email protected]
MACON, Ga.--(BUSINESS WIRE)--Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2026 second quarter financial results.
Highlights
(in millions except Unit Sales and EPS data)
Three Months Ended
March 28, 2026
B/(W) Prior
Year
Six Months Ended
March 28, 2026
B/(W) Prior
Year
Unit Sales
2,148
(147
)
4,283
(142
)
GAAP Measures:
Revenue
$
352.6
$
(6.2
)
$
685.7
$
13.0
Net Income
$
29.3
$
3.3
$
60.1
$
5.3
Diluted EPS
$
0.90
$
0.11
$
1.84
$
0.19
Non-GAAP Measures1:
Adjusted EBITDA
$
50.8
$
1.6
$
100.9
$
5.9
Adjusted Net Income
$
32.5
$
1.0
$
65.0
$
2.9
Adjusted Diluted EPS
$
1.00
$
0.04
$
2.00
$
0.13
1 Reconciliation to relevant GAAP metrics shown below
“I am incredibly proud of our team in delivering another outstanding quarterly result,” said John Wyskiel, President & CEO of Blue Bird Corporation. “The Blue Bird team continued to exceed expectations, improving operations, navigating tariffs, and expanding our leadership in alternative-powered buses. We delivered an exceptional Adj. EBITDA of $51M / 14% for the second fiscal quarter of 2026, a new all-time second-quarter record for the Company.
“In our push to expand our leadership in alternative-powered school buses, we delivered 201 electric-powered buses this quarter. As of the end of the quarter, we had more than 900 EV buses in our firm order backlog, which supports our EV sales target for 2026.
"Additionally, we are very pleased with the timely closing and integration progress of our recently announced acquisition of Micro Bird. The acquisition strengthens Blue Bird’s position with the industry’s most comprehensive bus portfolio and expands our addressable market with the Buy America–compliant shuttle bus market.
“Based on our strong first half of 2026 and final closing of the Micro Bird acquisition, we are raising our 2026 full-year Adjusted EBITDA guidance to $245 million. We look forward to sustained profitable growth in the coming years as we march towards ~$2.5B in revenue and a 15%+ Adjusted EBITDA margin.”
FY2026 Guidance and Long-Term Outlook
“We are very pleased with our second quarter results, with our highest ever Q2 Adj. EBITDA and Free Cash Flow,” said Razvan Radulescu, CFO of Blue Bird Corporation. “Our business is in a very strong position and we continue to deliver ahead of the plan we have been messaging. With the strong first half we delivered, we are raising all full-year 2026 guidance metrics, as well as building in consolidated results for Micro Bird for the second half. 2026 Guidance is being raised to Net Revenue at ~$1.75 Billion and Adj. EBITDA to ~$245 million. Additionally, we are raising our long-term profit outlook towards an Adjusted EBITDA margin of $375+ million, or 15%+, on $2.5+ billion in revenue. We are confident in our profitable growth plans.”
Fiscal 2026 Second Quarter Results
Net Sales
Net sales were $352.6 million for the second quarter of fiscal 2026, a decrease of $6.2 million, or 1.7%, compared to $358.9 million for the second quarter of fiscal 2025. The decrease in net sales is primarily due to a 6.4% decrease in units sold resulting from a 6.7% decrease in the number of production days in the second quarter of fiscal 2026 when compared with the same period in fiscal 2025, which primarily resulted from the timing of holidays, and our corresponding plant shutdown, in our production calendar. As a result of producing fewer buses, we had fewer units that were available to sale. However, the decrease resulting from selling fewer units was partially offset by Bus customer and product mix changes and cumulative Bus price increases, including increases that were intended to mitigate the impact of increased procurement costs for certain of our imported inventory as a result of the imposition of tariffs beginning during the second half of fiscal 2025 and continuing into the first half of fiscal 2026, as well as an increase in Parts sales.
Bus sales decreased $7.6 million, or 2.3%, reflecting a 6.4% decrease in unit bookings that was partially offset by a 4.4% increase in average sales price per unit. In the second quarter of fiscal 2026, 2,148 units booked compared to 2,295 units booked for the same period in fiscal 2025. The increase in unit price for the second quarter of fiscal 2026 compared to the same period in fiscal 2025 was primarily due to customer and product mix changes as well as price increases implemented to offset increases in inventory costs.
Parts sales increased $1.4 million, or 5.4%, for the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025. This increase is primarily attributed to price increases that were implemented to offset increases in inventory costs as well as higher fulfillment volumes and slight variations due to product and channel mix.
Gross Profit
Second quarter gross profit of $70.6 million represented a decrease of $0.2 million from the second quarter of last year. The decrease was primarily driven by the $6.2 million decrease in net sales, discussed above, and partially offset by a corresponding decrease of $6.0 million in cost of goods sold.
Net Income
Net income was $29.3 million for the second quarter of fiscal 2026, an increase of $3.3 million from the second quarter of last year. Among other smaller fluctuations, the increase in net income was largely driven by a decrease of $5.6 million in selling, general and administrative expenses, primarily due to the significant amount of share-based compensation expense recorded in the second quarter of fiscal 2025 resulting from the retirement of our former President and Chief Executive Officer, with no similar significant expense recorded for the acceleration of vesting of stock awards in the second quarter of fiscal 2026. Partially offsetting the decrease in selling general, and administrative expenses was a decrease of $3.4 million in other (expense) income, net, primarily due to $2.7 million in pretax costs relating to the acquisition of the remaining 50% of the outstanding common stock of Micro Bird effective April 1, 2026, with no such costs incurred during the second quarter of fiscal 2025.
Adjusted Net Income
Adjusted net income of $32.5 million represented an increase of $1.0 million from the second quarter of last year. The increase was primarily driven by the $3.3 million increase in Net Income, discussed above, when adjusting for the impact of expenses that are excluded in calculating Adjusted Net Income, including share-based compensation and Micro Bird acquisition costs, discussed above.
Adjusted EBITDA
Adjusted EBITDA was $50.8 million, which was an increase of $1.6 million compared with the second quarter of fiscal 2025. The increase primarily relates to the increase in Micro Bird earnings, when adjusted for the impact of expenses that are excluded in calculating Adjusted EBITDA, that was partially offset by a decrease in other income, net, when adjusted for the impact of expenses that are excluded in calculating Adjusted EBITDA, as discussed above.
Year-to-Date Fiscal 2026 Results
Net Sales
Net sales were $685.7 million for the six months ended March 28, 2026, an increase of $13.0 million, or 1.9%, compared to $672.7 million for the six months ended March 29, 2025. The increase in net sales is primarily due to Bus customer and product mix changes and cumulative Bus price increases, including increases that were intended to mitigate the impact of increased procurement costs for certain of our imported inventory as a result of the imposition of tariffs beginning during the second half of fiscal 2025 and continuing into the first half of fiscal 2026, as well as an increase in Parts sales. The Bus increases described above were partially offset by a decrease in Bus units sold resulting from a 4.3% decrease in the number of production days during the six months ended March 28, 2026 when compared with the same period in fiscal 2025, which primarily resulted from the timing of holidays, and our corresponding plant shutdown, in our production calendar. As a result of producing fewer buses, we had fewer units that were available to sale.
Bus sales increased $11.9 million, or 1.9%, reflecting a 5.3% increase in average sales price per unit that was partially offset by a 3.2% decrease in units booked. The increase in unit price for the first six months of fiscal 2026 compared to the same period in fiscal 2025 was primarily due to customer and product mix changes as well as price increases implemented to offset increases in inventory costs. This increase was partially offset by the impact of booking 4,283 units in the six months ended March 28, 2026 compared with 4,425 units during the same period in fiscal 2025.
Parts sales increased $1.1 million, or 2.1%, for the six months ended March 28, 2026 compared to the six months ended March 29, 2025. This increase is primarily attributed to price increases that were implemented to offset increases in inventory costs as well as higher fulfillment volumes and slight variations due to product and channel mix.
Gross Profit
Gross profit for the six months ended March 28, 2026 was $141.9 million, an increase of $10.7 million compared with the same period in the prior year. The increase was primarily driven by the $13.0 million increase in net sales. This was partially offset by an increase of $2.3 million in cost of goods sold, primarily corresponding the increase net sales.
Net Income
Net income was $60.1 million for the six months ended March 28, 2026, which was a $5.3 million increase from the same period in the prior year. Among other smaller fluctuations, the increase in net income was primarily driven by the $10.7 million increase in gross profit, discussed above, and partially offset by a $6.5 million increase in other expense. During the second quarter of fiscal 2026, the Company incurred approximately $2.7 million of pretax costs relating to the acquisition of the remaining 50% of the outstanding common stock of Micro Bird effective April 1, 2026, with no such costs incurred during the six months ended March 29, 2025. Additionally, during the first quarter of fiscal 2025, the Company sold certain state emissions credits that it was not projecting to use for approximately $2.6 million, with no similar income recorded during the first six months of fiscal 2026.
Adjusted Net Income
Adjusted net income for the six months ended March 28, 2026 was $65.0 million, an increase of $2.9 million compared with the same period last year, primarily due to the $5.3 million increase in net income, discussed above, when adjusting for the impact of expenses that are excluded in calculating Adjusted Net Income.
Adjusted EBITDA
Adjusted EBITDA was $100.9 million for the six months ended March 28, 2026, an increase of $5.9 million compared with the same period in the prior year. The increase primarily relates to the increase in (i) gross profit, when adjusted for the impact of expenses that are excluded in calculating Adjusted EBITDA, as discussed above and (ii) Micro Bird earnings, when adjusted for the impact of expenses that are excluded in calculating Adjusted EBITDA, that were partially offset by (iii) an increase in selling, general and administrative expenses, when adjusting for the impact of expenses that are excluded in calculating Adjusted EBITDA, and (iv) a decrease in other income, net, when adjusted for the impact of expenses that are excluded in calculating Adjusted EBITDA, as discussed above.
Conference Call Details
Blue Bird will discuss its fiscal 2026 second quarter and year to date financial results in a conference call at 4:30 PM ET today. Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company's website or by telephone. The slide presentation and webcast can be accessed via the Investor Relations portion of Blue Bird's website at www.blue-bird.com.
Webcast participants should log on and register at least 15 minutes prior to the start time on the Investor Relations homepage of Blue Bird’s website at http://investors.blue-bird.com. Click the link in the events box on the Investor Relations landing page. Participants desiring audio only should dial 646-844-6383 or 833-470-1428. The access code is 005726. A replay of the webcast will be available approximately two hours after the call concludes via the same link on Blue Bird’s website.
About Blue Bird Corporation
Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. School buses carry the most precious cargo in the world – 25 million children twice a day – making them the most trusted mode of student transportation. The company is the proven leader in low- and zero-emission school buses with more than 25,000 propane, natural gas, and electric powered buses sold. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird’s complete product and service portfolio, visit www.blue-bird.com.
Key Non-GAAP Financial Measures We Use to Evaluate Our Performance
This press release includes the following non-GAAP financial measures “Adjusted EBITDA,” "Adjusted EBITDA Margin," "Adjusted Net Income," "Adjusted Diluted Earnings per Share," “Free Cash Flow” and “Adjusted Free Cash Flow”. Adjusted EBITDA and Free Cash Flow are financial metrics that are utilized by management and the board of directors, as and when applicable, to determine (a) the annual cash bonus payouts, if any, to be made to certain employees based upon the terms of the Company’s Management Incentive Plan, and (b) whether the performance criteria have been met for the vesting of certain equity awards granted annually to certain members of management based upon the terms of the Company’s Omnibus Equity Incentive Plan. Additionally, consolidated EBITDA, which is an adjusted EBITDA metric defined by our Credit Agreement that could differ from Adjusted EBITDA discussed above as the adjustments to the calculations are not uniform, is used to determine the Company's ongoing compliance with several financial covenant requirements, including being utilized in the denominator of the calculation of the Total Net Leverage Ratio. Accordingly, management views these non-GAAP financial metrics as key for the above purposes and as a useful way to evaluate the performance of our operations as discussed further below.
Adjusted EBITDA is defined as net income or loss prior to interest income; interest expense including the component of operating lease expense (which is presented as a single operating expense within cost of goods sold or selling, general and administrative expenses in our U.S. GAAP financial statements) that represents interest expense on lease liabilities; income taxes; and depreciation and amortization including the component of operating lease expense (which is presented as a single operating expense within cost of goods sold or selling, general and administrative expenses in our U.S. GAAP financial statements) that represents amortization charges on right-of-use lease assets; as adjusted for certain non-cash charges or credits that we may record on a recurring basis such as share-based compensation expense and unrealized gains or losses on certain derivative financial instruments as well as certain charges such as (i) transaction related costs or (ii) discrete expenses related to major cost cutting and/or operational transformation initiatives. While certain of the charges that are added back in the Adjusted EBITDA calculation, such as transaction related costs and major cost cutting and/or operational transformation initiatives, represent operating expenses that may be recorded in more than one annual period, the significant project or transaction giving rise to such expenses is not considered to be indicative of the Company’s normal operations. Accordingly, we believe that these, as well as the other credits and charges that comprise the amounts utilized in the determination of Adjusted EBITDA described above, should not be used in evaluating the Company’s ongoing annual operating performance.
We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA and Adjusted EBITDA Margin are not measures of performance defined in accordance with U.S. GAAP. The measures are used as a supplement to U.S. GAAP results in evaluating certain aspects of our business, as described below.
We believe that Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors in evaluating our performance because the measures consider the performance of our ongoing operations, excluding decisions made with respect to capital investment, financing, and certain other significant initiatives or transactions as outlined in the preceding paragraphs. We believe the non-GAAP measures offer additional financial metrics that, when coupled with the U.S. GAAP results and the reconciliation to U.S. GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business.
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Diluted Earnings per Share should not be considered as alternatives to net income or GAAP earnings per share as an indicator of our performance or as alternatives to any other measure prescribed by GAAP as there are limitations to using such non-GAAP measures. Although we believe the non-GAAP measures may enhance an evaluation of our operating performance because they exclude the impact of prior decisions made about capital investment, financing, and other expenses, (i) other companies in Blue Bird’s industry may define Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share differently than we do and, as a result, they may not be comparable to similarly titled measures used by other companies in Blue Bird’s industry, and (ii) Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share exclude certain financial information that some may consider important in evaluating our performance.
We compensate for these limitations by providing disclosure of the differences between Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share and GAAP results, including providing a reconciliation to GAAP results, to enable investors to perform their own analysis of our operating results.
Our measures of “Free Cash Flow” and "Adjusted Free Cash Flow" are used in addition to and in conjunction with results presented in accordance with GAAP and Free Cash Flow and Adjusted Free Cash Flow should not be relied upon to the exclusion of GAAP financial measures. Free Cash Flow and Adjusted Free Cash Flow reflect an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. We strongly encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
We define Free Cash Flow as total cash provided by/used in operating activities as adjusted for net cash paid for the acquisition of fixed assets and intangible assets. We use Free Cash Flow, and ratios based on Free Cash Flow, to conduct and evaluate our business because, although it is similar to cash flow from operations, we believe it is a more conservative measure of cash flow since purchases of fixed assets and intangible assets are a necessary component of ongoing manufacturing operations. Accordingly, we expect Free Cash Flow to be less than operating cash flows.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. Specifically, forward-looking statements include statements in this press release regarding guidance, seasonality, product mix and gross profits and may include statements relating to:
Inherent limitations of internal controls impacting financial statements Growth opportunities Future profitability Ability to expand market share Customer demand for certain products Economic conditions (including tariffs) that could affect fuel costs, commodity costs, industry size and financial conditions of our dealers and suppliers Labor or other constraints on the Company’s ability to maintain a competitive cost structure Volatility in the tax base and other funding sources that support the purchase of buses by our end customers Lower or higher than anticipated market acceptance for our products Other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The factors described above, as well as risk factors described in reports filed with the SEC by us (available at www.sec.gov), could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements.
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of dollars, except for share data)
March 28, 2026
September 27, 2025
Assets
Current assets
Cash and cash equivalents
$
275,893
$
229,313
Accounts receivable, net
12,940
20,650
Inventories
144,765
139,470
Other current assets
32,969
22,195
Total current assets
$
466,567
$
411,628
Property, plant and equipment, net
$
117,868
$
108,541
Goodwill
18,825
18,825
Intangible assets, net
40,750
41,685
Equity investment in affiliates
39,204
35,197
Deferred tax assets
—
2,697
Pension
4,664
4,889
Other assets
1,486
1,793
Total assets
$
689,364
$
625,255
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable
$
127,124
$
151,479
Warranty
7,235
7,494
Accrued expenses
53,752
55,164
Deferred warranty income
12,015
11,329
Other current liabilities
49,156
6,333
Current portion of long-term debt
5,000
5,000
Total current liabilities
$
254,282
$
236,799
Long-term liabilities
Revolving credit facility
$
—
$
—
Long-term debt
82,982
85,324
Warranty
9,540
9,681
Deferred warranty income
23,292
22,368
Deferred tax liabilities
8,189
5,439
Other liabilities
13,151
10,229
Total long-term liabilities
$
137,154
$
133,041
Guarantees, commitments and contingencies
Stockholders' equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding at March 28, 2026 and September 27, 2025
$
—
$
—
Common stock, $0.0001 par value, 100,000,000 shares authorized, 31,646,589 and 31,884,721 shares issued and outstanding at March 28, 2026 and September 27, 2025, respectively
3
3
Additional paid-in capital
197,690
195,466
Retained earnings
128,302
88,193
Accumulated other comprehensive loss
(28,067
)
(28,247
)
Total stockholders' equity
$
297,928
$
255,415
Total liabilities and stockholders' equity
$
689,364
$
625,255
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
Six Months Ended
(in thousands of dollars except for share data)
March 28, 2026
March 29, 2025
March 28, 2026
March 29, 2025
Net sales
$
352,635
$
358,851
$
685,719
$
672,723
Cost of goods sold
281,988
287,997
543,843
541,552
Gross profit
$
70,647
$
70,854
$
141,876
$
131,171
Operating expenses
Selling, general and administrative expenses
31,529
37,143
65,081
64,418
Operating profit
$
39,118
$
33,711
$
76,795
$
66,753
Interest expense
(1,545
)
(1,813
)
(3,111
)
(3,728
)
Interest income
1,929
1,258
3,910
2,826
Other (expense) income, net
(2,922
)
444
(3,133
)
3,360
Income before income taxes
$
36,580
$
33,600
$
74,461
$
69,211
Income tax expense
(9,102
)
(9,129
)
(18,221
)
(17,822
)
Equity in net income of non-consolidated affiliates
1,823
1,575
3,817
3,379
Net income
$
29,301
$
26,046
$
60,057
$
54,768
Earnings per share:
Basic weighted average shares outstanding
31,629,376
31,917,407
31,703,272
32,072,354
Diluted weighted average shares outstanding
32,430,122
32,885,993
32,558,241
33,152,066
Basic earnings per share
$
0.93
$
0.82
$
1.89
$
1.71
Diluted earnings per share
$
0.90
$
0.79
$
1.84
$
1.65
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
(in thousands of dollars)
March 28, 2026
March 29, 2025
Cash flows from operating activities
Net income
$
60,057
$
54,768
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense
8,045
7,710
Non-cash interest expense
158
167
Share-based compensation expense
4,027
9,940
Equity in net income of non-consolidated affiliates
(3,817
)
(3,379
)
Loss on disposal of fixed assets
51
285
Deferred income tax expense (benefit)
5,390
(3,962
)
Amortization of deferred actuarial pension losses
236
139
Changes in assets and liabilities:
Accounts receivable
7,710
43,313
Inventories
(5,295
)
(36,034
)
Other assets
(10,241
)
(10,955
)
Accounts payable
(25,101
)
9,929
Accrued expenses, pension and other liabilities
43,120
(17,741
)
Total adjustments
$
24,283
$
(588
)
Total cash provided by operating activities
$
84,340
$
54,180
Cash flows from investing activities
Cash paid for fixed assets
$
(13,319
)
$
(13,616
)
Equity investment in affiliates
(190
)
(500
)
Total cash used in investing activities
$
(13,509
)
$
(14,116
)
Cash flows from financing activities
Term loan repayments
$
(2,500
)
$
(2,500
)
Principal payments on finance leases
—
(604
)
Repurchase of common stock in connection with repurchase programs
(19,948
)
(30,053
)
Repurchase of common stock in connection with stock award exercises
(2,574
)
(4,412
)
Cash received from stock option exercises
771
567
Total cash used in financing activities
$
(24,251
)
$
(37,002
)
Change in cash and cash equivalents
46,580
3,062
Cash and cash equivalents at beginning of period
229,313
127,687
Cash and cash equivalents at end of period
$
275,893
$
130,749
Reconciliation of Net Income to Adjusted EBITDA
Three Months Ended
Six Months Ended
(in thousands of dollars)
March 28, 2026
March 29, 2025
March 28, 2026
March 29, 2025
Net income
$
29,301
$
26,046
$
60,057
$
54,768
Adjustments:
Interest (income) expense, net (1)
(233
)
633
(486
)
1,066
Income tax expense
9,102
9,129
18,221
17,822
Depreciation, amortization, and disposals (2)
4,673
4,251
9,244
8,494
Micro Bird acquisition costs
2,673
—
2,673
—
Share-based compensation expense
1,670
7,434
4,027
9,940
Micro Bird Holdings, Inc. total interest expense, net; income tax expense or benefit; depreciation expense and amortization expense
3,628
1,713
7,136
2,869
Adjusted EBITDA
$
50,814
$
49,206
$
100,872
$
94,959
Adjusted EBITDA margin (percentage of net sales)
14.4
%
13.7
%
14.7
%
14.1
%
Reconciliation of Free Cash Flow to Adjusted Free Cash Flow
Three Months Ended
Six Months Ended
(in thousands of dollars)
March 28, 2026
March 29, 2025
March 28, 2026
March 29, 2025
Net cash provided by operating activities
$
47,761
$
27,770
$
84,340
$
54,180
Cash paid for fixed assets
(7,854
)
(9,022
)
(13,319
)
(13,616
)
Free cash flow
$
39,907
$
18,748
$
71,021
$
40,564
Cash paid for Micro Bird acquisition costs
2,673
—
2,673
—
Adjusted free cash flow
$
42,580
$
18,748
$
73,694
$
40,564
Reconciliation of Net Income to Adjusted Net Income
Three Months Ended
Six Months Ended
(in thousands of dollars)
March 28, 2026
March 29, 2025
March 28, 2026
March 29, 2025
Net income
$
29,301
$
26,046
$
60,057
$
54,768
Adjustments, net of tax expense or benefit (1)
Micro Bird acquisition costs
1,978
—
1,978
—
Share-based compensation expense
1,236
5,501
2,980
7,356
Adjusted net income, non-GAAP
$
32,515
$
31,547
65,015
62,124
_____________ (1) Amounts are net of estimated tax rates of 26%.
Reconciliation of Diluted EPS to Adjusted Diluted EPS
Three Months Ended
Six Months Ended
March 28, 2026
March 29, 2025
March 28, 2026
March 29, 2025
Diluted earnings per share
$
0.90
$
0.79
$
1.84
$
1.65
One-time charge adjustments, net of tax benefit or expense
0.10
0.17
0.16
0.22
Adjusted diluted earnings per share, non-GAAP
$
1.00
$
0.96
$
2.00
$
1.87
Adjusted weighted average dilutive shares outstanding
Blue Bird acquired the remaining 50% of Micro Bird for $201.8M, implying 10.7x FY2026 forecast EBITDA, which is below the 12.3x sector median. The FY2026 EBITDA guidance raise of 8.9% is largely inorganic, while the organic raise is only 2.2%. Management has beaten guidance for 14 consecutive quarters, supporting credibility of midterm EBITDA targets.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Blue Bird (BLBD - Free Report) .
Blue Bird currently has an average brokerage recommendation (ABR) of 1.88, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by eight brokerage firms. An ABR of 1.88 approximates between Strong Buy and Buy.
Of the eight recommendations that derive the current ABR, five are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 62.5% and 12.5% of all recommendations.
Brokerage Recommendation Trends for BLBD
Check price target & stock forecast for Blue Bird here>>>
While the ABR calls for buying Blue Bird, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is BLBD Worth Investing In?Looking at the earnings estimate revisions for Blue Bird, the Zacks Consensus Estimate for the current year has declined 3.8% over the past month to $4.67.
Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for Blue Bird. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, it could be wise to take the Buy-equivalent ABR for Blue Bird with a grain of salt.
On May 19, 2026, Blue Bird Corp BLBD shares fell 11.1% to a current price of $64.68. This decline comes amid a 52-week trading range of $37.68 to $81.51, highlighting significant volatility in the stock's performance.
GF Value™ verdict: Currently priced at $64.68, which is 32.5% above the GF Value™ of $48.81, indicating the stock is overvalued.GF Score™ of 81/100 suggests a strong overall assessment, indicating solid fundamentals.Most notable signal: The momentum rank of 10/10 reflects strong recent price performance. Is BLBD Overvalued or Undervalued? Blue Bird Corp BLBD is currently trading at $64.68, significantly above its GF Value™ of $48.81. This overvaluation of 32.5% indicates a lack of margin of safety for potential investors. The GF Valuation label classifies the stock as significantly overvalued, which raises concerns about the sustainability of the current stock price amid market fluctuations.
Investors should be cautious when considering entering or holding positions in BLBD at this price, as the high valuation suggests that the stock may be susceptible to corrections. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
How Does BLBD's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 15.9x 15.2x Forward P/E 13.3x N/A Currently, Blue Bird Corp's P/E ratio of 15.9x is above its 5-year median P/E of 15.2x, indicating that the stock is trading at a premium compared to its historical valuation. The forward P/E of 13.3x suggests that future earnings may be expected to improve, but this still does not align with the GF Value™ verdict that indicates the stock is overvalued. Therefore, the P/E analysis agrees with the GF Value™ assessment, highlighting potential risks in the current valuation.
What Does BLBD's GF Score™ Tell Us? The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns (backtested 2006-2021).
Metric Rating GF Score™ 81 Financial Strength 8/10 Profitability 7/10 Growth 7/10 Valuation 3/10 Momentum 10/10 Overall, BLBD's GF Score™ of 81/100 indicates strong fundamentals, with particularly robust financial strength and momentum, scoring 8/10 and 10/10 respectively. However, the valuation score of 3/10 reveals significant concerns regarding the stock's current price relative to its intrinsic value, emphasizing that while the company shows promise in profitability and growth, its elevated valuation may pose risks for potential investors.
What Are Insiders Doing with BLBD Stock? In recent months, insider activity at Blue Bird Corp has shown that insiders sold a total of $0.5 million worth of stock, with no recorded buying activity. This pattern of selling may suggest a lack of confidence among insiders regarding the current stock price and its future performance. A lack of insider buying during a period of stock price decline can be perceived as a negative signal, potentially indicating that insiders do not view the current valuation as attractive.
What This Means for Investors Based on the GF Value™ of $48.81 and the current price of $64.68, Blue Bird Corp is assessed as overvalued. This overvaluation, combined with insider selling and a low valuation score, suggests that potential investors may want to exercise caution and reassess the stock's fundamentals before making investment decisions.
For the complete analysis, visit the Blue Bird Corp BLBD stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is BLBD's GF Score™?
BLBD's GF Score™ is 81/100, indicating strong fundamentals and a solid ranking compared to its peers.
Is BLBD overvalued or undervalued?
BLBD is currently overvalued according to the GF Value™, which estimates the stock's fair value at $48.81, indicating a significant premium at the current price.
What is BLBD's P/E ratio?
BLBD's P/E ratio (TTM) is 15.9x, which is above its 5-year median P/E of 15.2x, suggesting that the stock is trading at a premium compared to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Blue Bird's latest 11% drop makes it a bargain, in my opinion, given that the termination of the pension plan has zero impact on its cash balance and adjusted EBITDA. Blue Bird's Q2 results highlighted its operational excellence as its margins expanded YoY despite selling fewer units and diesel buses representing a majority of its sales mix. The TAM expansion brought by fully acquiring Micro Bird could help Blue Bird maintain its growth trajectory in case school bus replacement activity slows down in the early 2030s.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Blue Bird (BLBD - Free Report) .
Blue Bird currently has an average brokerage recommendation (ABR) of 1.88, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by eight brokerage firms. An ABR of 1.88 approximates between Strong Buy and Buy.
Of the eight recommendations that derive the current ABR, five are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 62.5% and 12.5% of all recommendations.
Brokerage Recommendation Trends for BLBD
Check price target & stock forecast for Blue Bird here>>>
The ABR suggests buying Blue Bird, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Should You Invest in BLBD?In terms of earnings estimate revisions for Blue Bird, the Zacks Consensus Estimate for the current year has declined 3.8% over the past month to $4.67.
Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Blue Bird. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, it could be wise to take the Buy-equivalent ABR for Blue Bird with a grain of salt.
Extending its 19.5% rise through the first half of May, Astera Labs (ALAB 3.08%) stock is soaring this week. Investors are bidding shares of the artificial intelligence (AI) infrastructure specialist higher after a firm established a new, auspicious price target.
According to data provided by S&P Global Market Intelligence, shares of Astera Labs are up 34.3% from the end of trading last Friday through 11:01 a.m. ET today.
Image source: Getty Images.
One firm has a more optimistic outlook than most others do Maintaining an outperform rating on Astera Labs stock, Evercore ISI boosted its price target more than 38% to $297 from $215 on Tuesday. Based on Astera Labs stock closing at $215.58 on Monday, the new price target implied 38% upside.
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According to Thefly.com, Evercore ISI based its upwardly revised price target on the belief that demand for Astera Labs' connectivity solutions is growing.
Evercore ISI's optimism regarding Astera Labs stock mirrors that of several other firms. Earlier this month, for example, Barclays raised its price target to $200 from $165, and Needham lifted its price target to $260 from $220.
Is it too late to pick up shares of Astera Labs? From companies specializing in AI software to those that provide the infrastructure that enables AI computing, there are a variety of options for investors interested in AI stocks. Trading today at 91 times forward earnings, Astera Labs stock is hardly inexpensive, but the company is flourishing. It recently reported record quarterly revenue of $308.4 million, a 93% year-over-year increase in Q1 2026.
Those seeking a compelling AI stock with plenty of growth potential left in the tank should certainly consider Astera Labs, and not be deterred by the stock's current valuation.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool recommends Astera Labs and Barclays Plc. The Motley Fool has a disclosure policy.
Quantum computing and artificial intelligence-linked stocks led large-cap gainers last week as investors rotated into semiconductor, data center and next-generation computing names amid fresh government funding, analyst optimism and product expansion announcements.
Companies tied to quantum infrastructure, AI hardware and advanced connectivity drew strong momentum, while healthcare and space technology names also advanced on regulatory approvals and strategic execution updates.
These ten large-cap stocks were top performers last week. Are they a part of your portfolio?
Astera Labs, Inc. (NASDAQ:ALAB) gained 40.61% this week. The move comes after multiple Form 144 filings disclosed proposed sales totaling 280,000 Astera Labs shares worth roughly $60.4 million.
Credo Technology Group Holding Ltd (NASDAQ:CRDO) jumped 27.64% this week.
Dell Technologies Inc. (NYSE:DELL) increased 24.03% this week after Wall Street analysts raised price forecasts ahead of the company's upcoming earnings report on May 28.
HP Inc. (NYSE:HPQ) jumped 20.48% this week.
Photo: Poetra.RH / Shutterstock
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Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
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VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
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Stock to Watch: Astera Labs, Inc. (ALAB - Free Report) Astera Labs develops semiconductor-based connectivity solutions tailored for cloud and AI infrastructure. Its Intelligent Connectivity Platform includes high-speed, mixed-signal semiconductor products combined with COSMOS, a proprietary system management and optimization software suite. The company’s solutions are designed to enhance performance, bandwidth, and reliability in next-generation data centers.
ALAB is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Computer and Technology stock. ALAB has a Momentum Style Score of B, and shares are up 44.2% over the past four weeks.
For fiscal 2026, nine analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.53 to $2.92 per share. ALAB boasts an average earnings surprise of +21.4%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, ALAB should be on investors' short list.
Nvidia (NVDA 3.39%) has been one of the biggest beneficiaries of the artificial intelligence (AI) boom. Shares have already soared by more than 1,300% in the past five years. However, the next big AI stock gains may come from less obvious players.
Image source: Getty Images.
As AI infrastructure spending expands, demand is rising not just for AI chips but also for high-speed connectivity technologies that enable the movement of massive amounts of data between servers and across data centers.
Against this backdrop, here's why these three AI-powered tech stocks are worth watching for a potential Nvidia-style run in the coming years.
Astera Labs Astera Labs (ALAB 3.08%) designs high-speed connectivity chips and hardware that enable AI chips, servers, and memory to communicate efficiently within modern data centers. AI spending is increasingly shifting away from training large models toward running AI applications at scale. Subsequently, demand for connectivity solutions that enable faster and more efficient data movement across data centers is also growing significantly. Astera is well-positioned to capitalize on this opportunity.
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Astera's recent financials highlight its growing momentum. Revenue surged 93% year over year to $308.4 million, while adjusted earnings per share (EPS) rose 84.8% year over year to $0.61 in the first quarter of fiscal 2026 (ending March 31, 2026). Management now expects Q2 revenue in the range of $355 million to $365 million, up 15% to 18% sequentially.
Astera has already shipped millions of PCIe Gen 6 ports, high-speed connections that help move data quickly between AI chips, memory, and servers. These products accounted for more than one-third of the company's Q1 revenue. The company's Scorpio switch family (connectivity chips that help large groups of AI processors communicate faster) is also ramping quickly. The company expects Scorpio to become Astera's largest product line by the end of 2026 even though it accounted for just 15% of the total revenue in fiscal 2025.
The long-term opportunity could be even larger. Astera estimates it can generate more than $1,000 in revenue per AI processor deployed on a server. The company is also developing connectivity products for Nvidia's NVLink Fusion ecosystem, which is designed to help different AI processors communicate efficiently within large AI systems.
Astera's stock has already soared 225% in the past year. However, if the company continues expanding its role in next-generation AI infrastructure, the stock may soar even higher.
Marvell Technology Marvell Technology (MRVL 4.77%) designs custom AI chips, networking products, and optical interconnect technologies that help move massive amounts of data between processors, servers, and data centers.
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Marvell's growth outlook is impressive. Management expects the company's fiscal 2027 revenue to grow year over year by more than 30% to nearly $11 billion. Revenue is then projected to grow another 40% year over year to $15 billion in fiscal 2028. Marvell's custom AI silicon business is expected to at least double year over year, while its high-speed connectivity, Ethernet switching, and optical networking businesses should also continue to expand in fiscal 2028. As a result, the company expects its overall data center revenue to grow nearly 50% year over year in fiscal 2028.
Nvidia recently invested $2 billion in the company, highlighting the strategic value of Marvell's semi-custom chips and advanced optical networking capabilities. The partnership aims to help customers integrate custom AI chips into Nvidia's AI infrastructure. As hyperscalers increasingly develop their own AI processors, this could create a major opportunity for Marvell's high-speed connectivity and optical technologies.
Marvell is also expanding into AI scale-up networking, a rapidly emerging market focused on connecting large AI systems more efficiently. The company's recent acquisitions of Celestial AI and Polariton Technologies strengthen its optical networking capabilities. Hence, as AI infrastructure grows larger and demands faster, more power-efficient connectivity, Marvell's optical networking business could become a key growth catalyst.
Marvell trades at almost 61.7 times trailing-12-month earnings, indicating that investor expectations are already high. But with data movement emerging as a key bottleneck to scaling AI systems, Marvell could prove to be one of the strongest long-term AI infrastructure picks, alongside Nvidia.
Credo Technology Credo Technology (CRDO +1.59%) designs high-speed connectivity solutions that enable data movement between AI processors, servers, and networking equipment in modern data centers. One of its key businesses is active electrical cables (AEC), increasingly used for short-distance server connections due to their power efficiency and reliability.
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Credo's revenue surged 201% year over year to $407 million in fiscal 2026 Q3. The company has guided revenue between $425 million and $435 million in Q4. Management also expects fiscal 2027 revenue to grow year over year by more than 50%, driven by continued demand from hyperscalers and newer cloud AI infrastructure providers. Credo also recently highlighted a fifth hyperscaler win, suggesting its customer base is continuing to expand.
Credo is trying to expand beyond being just a cable supplier by focusing on AI system reliability. The company's ZeroFlap technology is designed to reduce connection failures in large AI clusters where downtime can become extremely expensive. Management now expects its ZeroFlap optics business to ramp earlier than previously anticipated in fiscal 2027.
Credo is also preparing for the next phase of AI connectivity. The company announced a $750 million acquisition of DustPhotonics to strengthen its optical networking capabilities as AI data centers move toward faster, next-generation networking architectures.
Credo, however, is exposed to high customer concentration risk, with its top three customers accounting for 88% of its Q3 revenue. The company also trades at a very rich valuation of around 107.2 times trailing-12-month earnings.
Despite the risks, if Credo manages to expand from an AEC leader into a broader AI connectivity platform, the stock could still grow even at these elevated valuations.
TAIPEI, Taiwan, May 26, 2026 (GLOBE NEWSWIRE) -- Astera Labs, Inc. (Nasdaq: ALAB), a leader in semiconductor-based connectivity solutions for rack-scale AI infrastructure, will host press and industry analysts at Computex 2026 in the company’s room at the Taipei Nangang Exhibition Center, Hall 1 (TaiNEX 1), Room 303, third floor.
WHAT: Astera Labs will use its Computex program to highlight the company’s latest news, rack-scale AI connectivity strategy, and collaboration with leading AI platform providers and Taiwan system and manufacturing partners.
Attendees will get a look at Astera Labs’ complete connectivity portfolio, including the first public demonstration of the Scorpio™ X-Series 320 Lane Smart Fabric Switch, ultra-low latency linear optical connectivity, COSMOS-enabled rack-level validation, and production-ready systems from Astera Labs and ecosystem partners.
Demonstrations will highlight:
Open scale-up AI platforms built on Scorpio Fabric Switches, including MGX-based reference designs for rapid AI platform deployment.Rack-scale validation for scale-up fabrics, including rigorous PCIe 6 testing with active electrical cables, CPUs and GPUs, plus rack-scale observability and diagnostics with COSMOS Explorer.Copper and optical connectivity for next-generation AI infrastructure, including active electrical cables, linear optical connectivity and 200G/lane technology with high-fidelity SerDes diagnostics.Silicon, validation platforms, and partner systems spotlighting how Astera Labs accelerates the customer journey from bring-up to deployment—spanning interop, performance testing, and production-ready platforms During a featured fireside chat on Wednesday, June 3, Thad Omura, SVP and GM, Compute Connectivity Group, Astera Labs, will share insights into Astera Labs’ custom connectivity solutions.
Technical talks will include:
The Evolving Boundary of Copper and OpticalNext-Gen Retimers for AI SystemsInference Tokenomics: Making Every Token Count with KV Cache OptimizationThe New Engine Driving Frontier AI ForwardStreamline, Automate, & Accelerate Your Hardware Workflows with COSMOS ToolsScaling 200G/Lane Ethernet: Advantages of Standard Footprint Designs WHEN: Computex 2026: June 2-5, 2026 (all times listed are in Taipei time)
Press conference, demo tour, and audience Q&A: Wednesday, June 3, 10:00 a.m.-11:00 a.m.Fireside Chat with Ecosystem Partner: Wednesday, June 3, 11:00 a.m.-11:30 a.m.Happy hour reception: Wednesday, June 3, 3:00 p.m.-5:00 p.m. WHERE: Taipei Nangang Exhibition Center, Hall 1 (TaiNEX 1), Room 303, Third Floor
WHO: Press and industry analysts covering AI infrastructure, hyperscale systems, and connectivity innovation.
WHY: The event is designed to give media and industry analysts direct access to Astera Labs leaders, latest announcements, live technical demonstrations, and ecosystem conversations around accelerating AI infrastructure deployment.
About Astera Labs
Astera Labs (Nasdaq: ALAB) provides rack-scale AI infrastructure through purpose-built connectivity solutions. By collaborating with hyperscalers and ecosystem partners, Astera Labs enables organizations to unlock the full potential of modern AI. Astera Labs’ Intelligent Connectivity Platform integrates CXL®, Ethernet, NVLink Fusion, PCIe®, and UALink™ semiconductor-based technologies with the company’s COSMOS software suite to unify diverse components into cohesive, flexible systems that deliver end-to-end scale-up and scale-out connectivity. The company’s custom connectivity solutions business complements its standards-based portfolio, enabling customers to deploy tailored architectures to meet their unique infrastructure requirements. Discover more at www.asteralabs.com.
Forward-Looking Statements
This communication contains certain forward-looking statements regarding Astera Lab’s expectations with respect to the parties that it will host, the subject of its fireside chat and technical talks, and the matters that will be demonstrated at the Computex 2026 program, including Astera Lab’s complete connectivity portfolio (e.g., the Scorpio X-Series 320 Lane Smart Fabric Switch, optical connectivity innovation, SerDes diagnostics and COSMOS-enabled validation), features and capabilities; its rack-scale AI connectivity strategy; as well as the systems produced as part of and impact of its collaborations. Such forward-looking statements are introduced using words such as “designed,” “strategy,” “will” and variations of such words and similar expressions. Such statements involve risks and uncertainties, many of which are beyond the control of Astera Labs, that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, among others, the risk that the expected components of the program may not occur; the anticipated market opportunities may not materialize; we may be unable to achieve, incorporate or validate the expected product features or capabilities; delays, disruptions, challenges or increased costs in the ability to incorporate product features or achieve the expected product roadmap within the expected timelines; the complexities and uncertainties in developing and implementing solutions based on new features and technologies; litigation or disputes related to our products; macroeconomic conditions, including general semiconductor industry economic conditions; regulatory restrictions; international conflict and other risks and uncertainties described in Astera Lab’s Form 10-K, Form 10-Q and other filings with the SEC.
Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and no person assumes any obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent that disclosure may be required by law.
5 Stocks Positioned to Benefit From the AI Inference BoomAstera Labs NASDAQ: ALAB is seeing robust demand across its connectivity portfolio and expects multiple product lines to contribute to growth through the back half of the year and into 2027, Nick Aberle, vice president of finance and investor relations, said at the 54th Annual TD Cowen TMT Conference.
Aberle said the company had reported “good results” about a month earlier and guided for an acceleration in growth in the second quarter, with optimism for continued growth inflection later in the year. He said demand remains strong from a secular standpoint as Astera seeks to build out what he described as a “connectivity backbone” for AI infrastructure.
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Nuts and Bolts AI Play Gains Momentum: Astera Labs Targets RaisedHe said the company has expanded beyond its core I/O connectivity products, Aries and Taurus, into more complex offerings including the Leo CXL Memory Controller and the Scorpio Smart Fabric Switch portfolio, which targets both scale-out and scale-up opportunities.
Scorpio X-Series Expected to Be a Key Growth Catalyst Aberle said Scorpio X-Series is expected to be “a great catalyst” for revenue for the remainder of the year and into 2027 as the company broadens across additional customers. He said all of Astera’s product lines are growing sequentially into the second quarter, and the company expects every product line to keep growing into the third quarter, fourth quarter and next year.
5 AI Infrastructure Stocks Smart Money Is Buying Before the Next SurgeAccording to Aberle, Scorpio X-Series addresses a market opportunity of more than $10 billion, which he said represents nearly half of the company’s total addressable market. He said the product carries “extremely rich” content and average selling prices, allowing it to move the needle more than some other parts of the portfolio.
Aberle said Scorpio X-Series has been in development for a long period of time, with pre-production volumes shipping in the second half of 2025 and early volume production beginning in the first quarter. He said the portfolio now includes both smaller-radix and larger-radix solutions, which are shipping in the second quarter.
While acknowledging that volume deployment in complex AI systems remains challenging, Aberle said the company is confident in its current position and expects Scorpio X-Series to be a “nice driver” in the back half.
Taurus and Aries Remain Important Pieces of the Portfolio On Taurus, Astera’s active electrical cable product for Ethernet connectivity, Aberle said the company views optical connectivity as incremental and additive to copper, rather than a direct replacement. He said copper continues to have a long life cycle due to its power, reliability and cost characteristics, and should remain preferred wherever the needed reach can be achieved.
Aberle said the Ethernet-based AEC market is still in early stages as the industry transitions toward 800G and eventually 1.6T. He said Astera sees an opportunity for AEC to take share from passive copper, while also expanding Taurus to additional customers.
Aries, Astera’s PCI Express retimer portfolio, also remains a significant contributor. Aberle said Aries grew roughly 70% year over year in 2025, even as it fell as a percentage of total revenue because other products grew faster. He said Aries once represented more than 90% of revenue and is now roughly in the range discussed by the TD Cowen moderator, around two-thirds of revenue.
Aberle said Astera is in the early stages of transitioning to PCI Express Gen 6 and that Gen 6 represented a little more than one-third of total revenue in the first quarter. He said he was not aware of anyone else shipping PCI Express Gen 6 products in volume today. On a like-for-like basis, he said Astera expects about a 20% ASP increase generation over generation, along with higher attach rates as faster speeds require retimers in more locations.
Optical Roadmap and NVLink Fusion Aberle said Astera has been building its optical capabilities for at least a couple of years, including assembling a team, developing resources and mapping out how to address the opportunity. He said the work is being done closely with customers and aligned with their roadmaps.
The company has discussed optical-based revenue in 2027, including from a standalone fiber coupler and from near-packaged optics applications, Aberle said. He described the XScale acquisition as meaningful because coupler technology is important to the scalability of an optical engine and was outside Astera’s typical internal capabilities.
Aberle said Astera is developing an electrical IC, photonic IC and related packaging, test and manufacturing flow internally. The company’s goal is to create an optical engine that can be built around Scorpio X to create a co-packaged optics solution for customers, while also being usable on the other side of the link around a customer’s AI accelerator.
He also discussed Astera’s role in NVIDIA’s NVLink Fusion concept, saying the company provides a bridge or translation layer between a customer accelerator and NVIDIA’s backend scale-up topology. Aberle said the work requires deep collaboration and is a custom solution rather than a multi-sourced product. He said the company has discussed one collaboration publicly, with others “percolating.”
Supply Chain and CXL Activity On supply chain, Aberle said Astera has been building its backend operations with scale and volume in mind for a long time. He said the company has a good understanding of its allocation profile on both the front end and back end through 2027 and feels comfortable with its supply position, including room for upside.
However, he noted that other components in AI racks could still create bottlenecks outside Astera’s control and potentially delay program rollouts. Aberle said Astera typically builds buffer into expectations around timing and ramps to stay conservative.
Aberle also said interest in the Leo CXL Memory Controller has increased, particularly for AI inferencing applications, as memory prices rise and supply tightens. He said hyperscalers are evaluating ways to optimize memory performance and cost. Astera has discussed a new design win with a hyperscaler customer for a customized version of Leo to be used for CXL connectivity within an AI inferencing appliance, which Aberle called a potential first step toward meaningful revenue momentum in CXL.
Customer Conversations Focus on Longer-Term Connectivity Challenges Asked how customer conversations differ from investor discussions, Aberle said customers are focused on a three- to five-year horizon, including future accelerator capabilities, rack architectures and scale-up requirements. He said those plans create significant challenges for the connectivity backbone of AI infrastructure.
Aberle said Astera’s discussions with customers are not only about revenue opportunities in 2026 or 2027, but about solving next-generation connectivity challenges in 2028, 2029 and 2030 across both optical and copper technologies.
About Astera Labs NASDAQ: ALABAstera Labs is a fabless semiconductor company that develops connectivity solutions for data center and cloud infrastructure. The firm focuses on addressing signal integrity and link management challenges that arise as server architectures incorporate higher-bandwidth processors and accelerators. Its technology is aimed at improving reliability and performance for high-speed interconnects used in servers, storage systems and compute accelerators.
The company's product portfolio centers on silicon devices and accompanying firmware and software that enhance and manage high-speed links.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Expanded Cloud-Scale Interop Lab and growing engineering presence to strengthen AI system integration with leading AI platform providers and Taiwan system manufacturers June 02, 2026 21:00 ET | Source: ASTERA LABS, INC.
TAIPEI, Taiwan, June 03, 2026 (GLOBE NEWSWIRE) -- Astera Labs, Inc. (Nasdaq: ALAB), a leader in semiconductor-based connectivity solutions for rack-scale AI infrastructure, today announced a significant expansion of its Taiwan operations and Cloud-Scale Interop Lab, deepening the company’s engineering, operational footprint, and strategic coordination with customers and ecosystem partners in one of the world’s most important semiconductor ecosystems.
As AI labs race to stand up training and inference capacity for frontier models, time-to-deployment increasingly depends on how quickly silicon, systems, and manufacturing partners can qualify designs, resolve issues, and move platforms into production. In that environment, proximity in Taiwan becomes a strategic advantage, bringing platform interop and validation closer to the semiconductor supply chain, specialized engineering talent, and the local AI infrastructure ecosystem that helps turn designs into deployable infrastructure.
Astera Labs’ expanded Taiwan presence positions the company to bring together broader engineering, cross-functional support, and closer business coordination with the ecosystem building rack-scale AI systems. In collaboration with AI platform providers AMD, Arm, Intel, and NVIDIA and Taiwan original design manufacturers (ODMs) including GIGABYTE, Ingrasys (a subsidiary of Foxconn), Inventec, Quanta Cloud Technology, and Wiwynn, Astera Labs will strengthen the validation and system integration work required to bring purpose-built AI infrastructure to market faster. The expanded presence will also broaden cross-functional capabilities in engineering operations, hardware engineering, quality, and technical support to help customers reduce iteration cycles during product development, debugging, diagnostics, and qualification. The work builds on the momentum of Astera Labs’ recently announced Scorpio fabric switch family, whose expanded 32-to-320-lane portfolio further embeds Astera Labs in the rack-scale platforms now being developed with ODM partners.
"Taiwan is where the global AI supply chain gets built, and the programs driving the most ambitious AI buildouts run through this ecosystem,” said Campbell Kan, vice president of Asia Sales and Taiwan general manager at Astera Labs. “Expanding our footprint here will help customers shorten the path from qualification to deployment, so new training and inference capacity comes online at the speed of the AI race.”
Astera Labs is also highlighting its expanded Taiwan footprint and ecosystem momentum this week at Computex 2026.
Ecosystem Support:
AI Platform Providers:
Ravi Pendekanti, Corporate Vice President, Data Center Solutions Group, AMD.
"AMD is committed to working with partners to give customers choice and help bring AI infrastructure to market faster. The Astera Labs Taiwan Cloud-Scale Interop Lab supports validation across AMD Instinct GPUs, EPYC CPUs, and Pensando advanced networking solutions in the environments customers use to scale their AI infrastructure.”
Eddie Ramirez, Vice President of Go-to-Market, Cloud AI Business Unit, Arm
“As AI infrastructure becomes increasingly complex, close ecosystem collaboration is essential to accelerate platform readiness. Astera Labs’ expanded presence in Taiwan, together with its connectivity portfolio validated on Arm compute platforms like Arm AGI CPU, will help streamline system integration so customers can move from development to deployment faster.”
Taiwan System and Manufacturing Collaborators:
Chris Pai, Engineering VP, Ingrasys, a subsidiary of Foxconn
"Moving AI infrastructure from design into volume production takes fast execution across the manufacturing chain. Astera Labs’ deeper investment in Taiwan strengthens the engineering coordination needed to bring validated platforms into manufacturing on tighter customer schedules.”
Benny Lan, Chief Operation Officer at Giga Computing
“Speed and time-to-market matter more than ever in this industry. GIGABYTE is shipping rack-scale AI systems that integrate high speed fabric and PCIe signals that demand quick validation turnarounds. Astera Labs' expanded Taiwan footprint puts their team where ours is, and that translates directly into faster, better-validated platforms for our customers.”
Vincent Lin, President of Enterprise Business Group, Inventec Corp
“The largest AI infrastructure programs require close coordination across silicon, system design, and manufacturing. Astera Labs’ expanded Taiwan presence and Cloud-Scale Interop Lab give the Taiwan ecosystem a shared environment to validate platforms earlier and move from design win to deployable system faster.”
Mike Yang, Executive VP of Quanta Computer Inc. & President of Quanta Cloud Technology
“For hyperscalers and AI labs, time lost in platform qualification directly delays usable compute capacity. The Taiwan Cloud-Scale Interop Lab gives Quanta Cloud Technology and Astera Labs a closer path for system integration work, helping shorten debugging and qualification cycles before systems reach production.”
Tony Wen, Vice President, Wiwynn
"In hyperscale AI infrastructure, validation velocity is key to bringing new capacity online faster. Our close engineering collaboration with Astera Labs in Taiwan tightens the feedback loop across system design and qualification, accelerating the path to high-volume deployment at hyperscaler speed."
About Astera Labs
Astera Labs (Nasdaq: ALAB) provides rack-scale AI infrastructure through purpose-built connectivity solutions. By collaborating with hyperscalers and ecosystem partners, Astera Labs enables organizations to unlock the full potential of modern AI. Astera Labs’ Intelligent Connectivity Platform integrates CXL®, Ethernet, NVLink Fusion, PCIe®, and UALink™ semiconductor-based technologies with the company’s COSMOS software suite to unify diverse components into cohesive, flexible systems that deliver end-to-end scale-up and scale-out connectivity. The company’s custom connectivity solutions business complements its standards-based portfolio, enabling customers to deploy tailored architectures to meet their unique infrastructure requirements. Discover more at www.asteralabs.com.
Forward-Looking Statements
This communication contains certain forward-looking statements regarding Astera Lab’s expectations with respect to the impact of its Taiwan operations expansion. Such forward-looking statements are introduced using words such as “positions,” “to,” “will” and variations of such words and similar expressions. Such statements involve risks and uncertainties, many of which are beyond the control of Astera Labs, that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, among others, the risk that the expected capabilities and impact of the expansion may not materialize (including strengthened AI system integration and validation, strategic customer and partner coordination, cross-functional capabilities, speed and reduced iteration cycles, and shortened path from qualification to deployment); delays, disruptions, challenges or increased costs in the ability to integrate and bring into effect such expanded operations or achieve the expected results within the expected timelines; the complexities and uncertainties in developing and implementing solutions based on new features and technologies; litigation or disputes related to our products; macroeconomic conditions, including general semiconductor industry economic conditions; regulatory restrictions; international conflict and other risks and uncertainties described in Astera Lab’s Form 10-K, Form 10-Q and other filings with the SEC.
Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and no person assumes any obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent that disclosure may be required by law.
It has been about a month since the last earnings report for Astera Labs, Inc. (ALAB - Free Report) . Shares have added about 70% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Astera Labs, Inc. due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Astera Labs, Inc. before we dive into how investors and analysts have reacted as of late.
Astera Labs Q1 Earnings Beat Estimates, Revenues Increase Y/YAstera Labs reported first-quarter 2026 non-GAAP earnings of 61 cents per share, up 84.8% year over year. The results beat the Zacks Consensus Estimate by 13.66%.
Revenues totaled $308 million, up 93.4% from the year-ago quarter and surpassed the Zacks Consensus Estimate by 5.42%. Results reflected robust demand tied to the company’s PCIe 6 connectivity portfolios, which contributed more than one-third of total revenue in the quarter.
ALAB Posts Broad-Based Growth Across Core PortfoliosALAB’s top line increased 14% sequentially, supported by strength across signal conditioning and switch fabric offerings that enable both scale-up and scale-out connectivity in AI platforms. Management highlighted continued diversification, with multiple customers and product categories contributing to growth.
PCIe Gen 6 momentum remained a central theme. The company noted it has shipped millions of PCIe Gen 6 ports to date, underscoring both portfolio maturity and the pace of adoption as AI infrastructure transitions to higher-speed interconnect standards.
Astera Labs Deepens Scorpio Lineup for AI FabricsAstera Labs emphasized progress in its Scorpio family, with Scorpio X-Series products beginning to ship in initial production volumes during the quarter. Management expects Scorpio X-Series shipments to rise in the second quarter, alongside initial shipments of the newly announced 320-lane Scorpio X device, before ramping up to full volume production in the second half of 2026.
The company also expanded the Scorpio P-Series PCIe 6 switch family to span 32 to 320 lanes. Leadership positioned the broader Scorpio portfolio as a platform for higher-value AI fabric deployments, citing features such as Hypercast and in-network compute aimed at improving collective operations and reducing networking overhead in large-scale training and inference workloads.
ALAB’s Operating DetailsNon-GAAP gross margin was 76.4% in the first quarter, expanding 150 basis points year over year, primarily due to a lower mix of hardware sales within the signal conditioning portfolio. This result points to solid underlying profitability despite the ongoing product ramp and expanding portfolio.
Research and development expenses surged 94.6% year over year to $125.6 million. Sales and marketing expenses increased 0.9% year over year to $21.9 million. General and administrative expenses increased 17.9% year over year to $25.8 million.
The non-GAAP operating margin was 36.2% compared with 33.7% in the year-ago quarter.
Astera Labs Maintains Strong Liquidity and Operating CashAs of March 31, 2026, cash and cash equivalents and marketable securities were $1.18 billion.
Cash flow from operations was $74.6 million in the first quarter.
ALAB Posts 2Q26 GuidanceFor the second quarter of 2026, ALAB expects revenues between $355 million and $365 million, implying 15% to 18% sequential growth. The outlook is driven by the continued adoption of PCIe 6 across AI platforms, rising Taurus volumes for AI scale-out connectivity and a sustained early-stage ramp-up of Scorpio X-Series products for large-scale XPU clustering.
Non-GAAP gross margin is expected to be approximately 73%, including an estimated 200-basis-point noncash impact tied to a recently executed warrant agreement with a customer.
The company expects non-GAAP operating expenses in the range of $128 million-$131 million, with non-GAAP diluted earnings projected to be between 68 cents and 70 cents per share.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 30.62% due to these changes.
VGM ScoresCurrently, Astera Labs, Inc. has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Astera Labs, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerAstera Labs, Inc. is part of the Zacks Internet - Software industry. Over the past month, F5 Networks (FFIV - Free Report) , a stock from the same industry, has gained 19%. The company reported its results for the quarter ended March 2026 more than a month ago.
F5 reported revenues of $811.7 million in the last reported quarter, representing a year-over-year change of +11%. EPS of $3.90 for the same period compares with $3.42 a year ago.
F5 is expected to post earnings of $3.98 per share for the current quarter, representing a year-over-year change of -4.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for F5. Also, the stock has a VGM Score of D.
Shares of AI connectivity provider Astera Labs (ALAB 3.08%) rallied 76.1% in May, according to data from S&P Global Market Intelligence.
Astera has become one of the leading names in connectivity for artificial intelligence systems, as networking between servers, chips, and memory is increasingly important in the age of agentic AI.
Thus, it's no surprise Astera rose last month, as it reported strong earnings and gave a bullish outlook amid a strong month for AI chip stocks generally.
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Astera was stellar in May In its fiscal first quarter, Astera Labs saw revenue jump 93.5% to $308.4 million, with adjusted (non-GAAP) earnings jumping 84.8% to $0.61. Both figures handily beat analyst estimates. Management also strongly guided to $360 million in revenue at the midpoint for the current quarter, which would amount to very strong 26% quarter-over-quarter growth.
Aside from the strong results, Astera stock jumped again on May 19, rising over 17% at one point on the day, after the company presented at an industry conference and a sell-side analyst raised its price target.
At the J.P. Morgan Global Technology, Media and Communications Conference, CEO Jitendra Mohan gave very positive commentary on the company's growth outlook, particularly the ramp for Astera's new data center switch chipset, the Scorpio X fabric switch. Mohan said the product should ramp to become the company's largest product by sales by the end of the year. That's an exciting feat, given that Astera just introduced the Scorpio X in early May.
That same day, tech analysts at Evercore ISI raised the firm's price target on Astera shares from $215 to $297. The analysts cited positive channel checks, noting that the progression of agentic AI is placing an onus on low-cost-per-token inference, which requires several types of chips, not just expensive training-oriented GPUs. The optimization across GPUs, CPUs, ASICs, and memory requires ever-increasing connectivity, which benefits Astera's product portfolio.
Image source: Getty Images.
Put Astera in the AI winner basket Astera is up 250% over the past year, and currently trades at a lofty 105 times this year's earnings estimates. Like several other semiconductor stocks that produce GPUs, CPUs, memory, connectivity, or the machines that build these chips, just about every company exposed to the agentic AI build-out has had a fantastic year.
Still, at these levels, valuations are quite high, and a pullback is to be expected. One might have begun, in fact, on Friday. That being said, Astera should be a part of any investor's "basket" of AI beneficiaries to buy on any large dips.
That's because the AI build-out seems set to continue. Given the massive investment news we have seen recently, including Alphabet's announcement that it will raise $80 billion in stock to fund its AI build-out, the chip bull market seems set to continue over the next couple of years.
Anthropic filed confidentially for a U.S. initial public offering (IPO) on June 1, 2026, days after closing a $65 billion Series H financing round that valued the company at nearly $1 trillion. The maker of Claude is officially coming to public markets, and Wall Street's initial beneficiary list starts with Amazon and Alphabet, both of which hold substantial equity stakes.
But the more interesting question isn't who holds Anthropic equity. It's who holds Anthropic's infrastructure contracts. Claude isn't a software business, it's a compute business. And the companies building the machines Claude runs on could be the quieter beneficiaries of this IPO moment.
Image source: Getty Images.
Why the IPO changes the calculus When Anthropic goes public near a $1 trillion valuation, it will need to show investors a credible path to supporting that number. That means building more capacity, faster. Anthropic has already committed to spending more than $100 billion with Amazon Web Services over the next decade, securing up to 5 gigawatts of compute capacity. Separate agreements with Google lock in another 5 gigawatts. That is 10 gigawatts of contracted artificial intelligence (AI) compute demand from a single company -- before the IPO even happens.
Here are five companies that are positioned to benefit from the infrastructure build-out that follows.
1. Celestica Celestica (CLS 2.15%) is the company that integrates GPUs, custom silicon, and networking gear into finished, tested racks that hyperscalers actually deploy. As of April 2026, the company has made its DS6000-series 1.6 terabit Ethernet switches -- hardware designed to handle the cluster density that Anthropic's training runs demand -- available to order. In March 2026, Celestica also announced a strategic collaboration with AMD to bring the open-standards Helios rack-scale AI platform to market. When Anthropic builds out capacity, someone has to assemble and deliver the racks. Celestica does that for some of the largest hyperscalers.
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2. Credo Technology Group Credo Technology (CRDO +1.59%) supplies the Active Electrical Cables connecting GPUs inside AI clusters. Anthropic's $100 billion AWS compute commitment will translate into physical servers that need Credo's cables. The company's three confirmed hyperscaler customers all have direct Anthropic relationships. The connection is indirect, but structurally real.
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3. Astera Labs Astera Labs (ALAB 3.08%) designs the semiconductor connectivity silicon that lives inside the AI rack -- PCIe retimers, CXL memory controllers, and Ethernet fabric switches. In May 2026, the company launched the Scorpio X-Series 320 Lane AI Fabric Switch, the largest open memory-semantic fabric switch available, now shipping to leading cloud customers. Astera's technology manages signal integrity between chips inside a cluster, making it a critical layer in the infrastructure Anthropic needs at scale.
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4. Coherent Coherent (COHR +0.15%) provides the optical transceivers that connect servers across a data center. Nvidia invested $2 billion in Coherent in March 2026 and signed a multibillion-dollar purchase commitment for optical networking and laser products. As Anthropic's clusters grow, optical demand grows with them. Coherent's data center and communications segment posted $1.36 billion in revenue for the third quarter of fiscal 2026.
5. Marvell Technology Anthropic's compute expansion depends heavily on Amazon's Trainium custom AI accelerators. Marvell Technology (MRVL 4.77%) is one of the primary architects of custom silicon for hyperscalers, with 18 confirmed XPU sockets in its pipeline. When Amazon scales Trainium to honor its Anthropic commitments, Marvell's design wins convert to revenue.
At Computex on June 2, Nvidia CEO Jensen Huang said that Marvell Technology is a potential trillion-dollar company. Investors responded enthusiastically, sending Marvell shares soaring 33% in a single trading session, the largest one-day gain in the company's history. The rally added approximately $56 billion to Marvell's market capitalization, lifting its total value above $250 billion.
The risk across this theme is real. Anthropic's IPO could be delayed or scaled back, slowing the pace of infrastructure commitments. And with capital spending on AI at record highs, there's a genuine question about how much of this build-out is already priced into each of these stocks. None of these are hidden gems in the traditional sense, but they are structurally tied to a demand driver that just became very public.
Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Celestica, Coherent, Marvell Technology, and Nvidia. The Motley Fool recommends Astera Labs. The Motley Fool has a disclosure policy.
Key Takeaways CRWD said Charlotte AI usage jumped more than sixfold as Threat Graph handles 1T events daily. SNOW is seeing faster AI-led platform demand, helped by Cortex Code and Snowflake Intelligence.ALAB said PCIe Gen 6 AI fabric and signal conditioning topped one-third of first-quarter revenues. U.S. stock markets have been witnessing an astonishing bull run supported by artificial intelligence (AI) trade. For the past three and a half years, AI trade has single-handedly driven Wall Street. What is surprising is that as days progress, AI trade is gaining more strength despite the highly overstretched valuation of this space.
Here, we recommend three AI-powered infrastructure giants for investors to keep in focus for long-term investment purposes. These stocks have provided more than 25% returns in the past month. These stocks are: CrowdStrike Holdings Inc. (CRWD - Free Report) , Snowflake Inc. (SNOW - Free Report) and Astera Labs Inc. (ALAB - Free Report) . Each of these stocks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of the above-mentioned three stocks in the past month.
Image Source: Zacks Investment Research
CrowdStrike Holdings Inc.CrowdStrike Holdings continues to leverage AI and machine learning to drive superior security outcomes and operational efficiency. CRWD’s Charlotte AI, its generative AI-powered platform, is gaining traction by automating security operations, improving response times and enhancing overall protection.
Charlotte AI also achieved FedRAMP high authorization in fiscal 2026. The platform is witnessing strong adoption. During the fourth quarter of fiscal 2026 earnings call, CRWD highlighted that Charlotte AI usage has soared more than six times year over year, while annual recurring revenues tripled in fiscal 2026. This positions CrowdStrike as a frontrunner in applying AI to cybersecurity, a key differentiator in the market.
CRWD’s Threat Graph, a proprietary data-driven engine, now processes more than one trillion security events per day, significantly enhancing its threat detection capabilities. This data-centric approach strengthens CRWD’s ability to identify and neutralize threats effectively, boosting customer confidence and retention.
CrowdStrike Holdings has an expected revenue and earnings growth rate of 23.4% and 30.6%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.4% over the last seven days.
Snowflake Inc.Snowflake is seeing faster AI-led platform demand, helped by Cortex Code and Snowflake Intelligence that expand use cases and support higher fiscal 2027 product revenue guidance. Customer growth and retention remain healthy, and contracted backlog continues to provide revenue visibility for the consumption model.
Rapid product releases and deeper partnerships with hyperscalers and model providers should reinforce adoption and lower unit costs over time. AI is accelerating SNOW’s core platform consumption as customers migrate workloads to access governed data and context for AI at scale, while first-party AI products create new monetization.
SNOW raised full-year fiscal 2027 product revenue guidance to $5.84 billion, implying 31% year-over-year growth, and guided second-quarter fiscal 2027 product revenues to $1.415-$1.420 billion, implying 30% growth. Remaining performance obligations were $9.21 billion at the end of the first quarter of fiscal 2027, up 38% year over year, which reflects customer commitments even as recognized revenues follow usage patterns.
Snowflake has an expected revenue and earnings growth rate of 29.6% and 54.4%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 6.6% over the last 30 days.
Astera Labs Inc.Astera Labs is benefiting from rising demand for PCIe 6 signal conditioning and AI fabric switching as hyperscalers expand rack-scale AI deployments. In first-quarter 2026, PCIe Gen 6 revenues across AI fabric and signal conditioning contributed more than one-third of revenue, highlighting early adoption.
First-quarter results showed demand broadening across ALAB’s PCIe Gen 6 portfolio, with Gen 6 revenues across AI fabric and signal conditioning contributing more than one-third of the company's revenues. ALAB cited continued strength in smart cable modules for Ethernet AECs as program designs ship in volume and additional designs ramp across GPU, XPU, and general-purpose systems.
ALAB expects the AI fabric portfolio to expand into 2027 with UALink-based products for AI scale-up platforms. It highlighted the publication of a new UALink specification in early April, adding features such as manageability and 200-gig performance, which reinforces an open, vendor-neutral approach to scale-up fabrics.
In parallel, ALAB is progressing through qualification at a large AI platform provider for an ultra-high precision optical fiber coupler, with volume shipments targeted to begin in 2027. Success in these programs would broaden the company beyond copper interconnects and extend its content opportunity into optical and custom solutions.
Astera Labs has an expected revenue and earnings growth rate of 80% and 58.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 22.2% over the last 60 days.
SummaryAstera Labs is at the forefront of the AI revolution, benefiting from surging semiconductor demand.ALAB has consistently beaten earnings estimates since its IPO, with accelerating bottom-line growth and near triple-digit revenue expansion.Exposure to hyperscalers and data center clients positions ALAB for multi-year secular growth in cloud computing markets.I remain bullish on ALAB, viewing its quality and growth as justifying a buy rating despite valuation considerations. imaginima/iStock via Getty Images
Now, I view the current AI development as revolutionary. And I also view semiconductor companies as being at the forefront of this revolution. So, I have decided to initiate coverage on Astera Labs (ALAB
1.85K Followers
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Astera Labs stock price has gone parabolic in the past few months, mirroring the performance of the semiconductor industry. ALAB jumped to $346 on Monday, up by 253% from its lowest point this year, with its valuation jumping from $16.6 billion in April to $60 billion today. Still, the company faces some major risks, with analysts predicting a pullback.
Astera Labs is a top player in the technology industry, where it builds the connective tissue inside data centers. Instead of making GPUs, the company makes chips and software that enable GPUs, CPUs, memory, and networking gear to communicate with each other well.
The company solves a major problem that has existed in the data center industry for a while. Modern AI platforms use thousands of chips that work together, and moving data between them is a key bottleneck.
Astera Labs stock price has, therefore, surged this year because of the ongoing data center boom in the United States and other countries. Top companies like Meta Platforms, Microsoft, Google, and Amazon are spending over $750 billion in their data centers this year.
The most recent numbers showed that Astera Labs’ business was firing on all cylinders. Its revenue jumped by 14% sequentiually and 93% on a YoY basis, making it one of the fastest-growing companies in the industry. It made over $304 million in revenue, beating what analysts were expecting by far.
This growth happened as the company announced the Scorpio X-Series 320-lane Smart Fabric Switch. It also expanded its Scorpio P-Series PCIe-6 Fabric family that now spans from 32 to 320 lane configurations.
Astera Labs made a net income of $110 million, representing an operating margin of 36.2%. Analysts believe that this growth momentum will continue as the data center boom gains steam.
The average estimate is that the company’s revenue jumped by 87% to $360 million. It will then grow by 78% YoY to over $410 million. As a result, the annual revenue growth is expected to grow by 81% this year followed by 42% next year. This means that it will make $1.55 billion this year, followed by $2.19 billion next year.
Still, the main challenge for Astera Labs stock is that it is highly overvalued. Data shows that it trades with a forward price-to-earnings ratio of 153, much higher than the sector median of 32. The forward PEG ratio stands at 2.31, also higher than the sector median of 1.36.
Astera Labs stock chart | Source: TradingView
The daily chart shows that the ALAB share price has surged from a low of $98.17 in March to a high of $372 this year. It recently surged above the crucial resistance level at $262, its highest point in September last year.
The Relative Strength Index has moved from the overbought level of 83 to the current 65. In some instances, it is common for a highly overbought stock to retreat amid profit-taking.
Astera Labs stock has also moved further away from its historical moving averages. For example, its current price of $346 is much higher than the 100-day Exponential Moving Average (EMA) of $203. This means that it may retreat because of a concept known as mean reversion.
If this happens, the next key level to watch will be at $262, its highest point in September. This target is slightly above the average estimate among analysts, which stands at $233.
Key Takeaways Astera Labs posted Q1 FY2026 revenues of $308M, up 14% sequentially and 93% year over year. ALAB expanded its Taiwan operations and its Cloud-Scale Interop Lab to accelerate AI deployments. ALAB expects Q2 FY2026 revenues of $355M-$365M, implying 15%-18% sequential growth. Astera Labs (ALAB - Free Report) is benefiting from the accelerating demand for AI infrastructure, which is driving robust growth across its product portfolio and positioning the company for further upside. In the first quarter of fiscal 2026, ALAB reported revenues of $308 million, up 14% sequentially and an impressive 93% year over year.
The company’s leadership in high-speed connectivity, expanding product portfolio and deep customer partnerships position it to capture a growing share of the AI infrastructure market. ALAB recently announced a major expansion of its operations in Taiwan and its Cloud-Scale Interop Lab. This expansion will speed up the deployment of rack-scale AI infrastructure.
The move improves the company’s engineering, operations, quality, and technical support. It also boosts collaboration with key partners, including AMD, Arm, Intel, NVIDIA, and leading Taiwan ODMs such as GIGABYTE, Ingrasys, Inventec, Quanta Cloud Technology, and Wiwynn. Astera Labs expects to speed up platform validation, system integration, debugging and qualification processes by strengthening its presence in Taiwan’s semiconductor ecosystem. This will help customers shorten development cycles and launch AI infrastructure solutions to market more quickly.
The company benefits from strong growth in UALink, an open-standard scale-up connectivity protocol designed to address the increasing demands of AI infrastructure. In the first quarter of 2026, ALAB collaborated with UALink Consortium to publish the new UALink 2.0 specification, introducing advanced capabilities such as In-Network Compute, confidential computing and multi-path routing while preserving its foundational memory-semantic model. These enhancements strengthen scalability, security and resiliency, further supporting an open, vendor-neutral AI compute fabric designed to meet evolving industry demands.
ALAB’s rising demand for AI reinforces its leadership in connectivity solutions, which are expected to drive growth in the second quarter of 2025. For the same quarter, ALAB expects revenues between $355 million and $365 million, implying 15% to 18% sequential growth.
ALAB Faces Stiff CompetitionALAB is facing stiff competition from other industry players like Marvell Technology (MRVL - Free Report) and Cisco Systems (CSCO - Free Report) . Both Marvell Technology and Cisco Systems are expanding their footprints in the AI infrastructure space.
Marvell Technology’s expanding portfolio has been noteworthy. In June 2026, Marvell Technology introduced the Teralynx T100, the industry’s first 102.4 Tbps AI-optimized switch silicon, delivering up to 25% lower power consumption and ultra-low latency to improve efficiency and scalability in large AI data center networks.
Cisco Systems has been integrating AI into its product portfolios across networking, security, collaboration and observability. Strong demand for Cisco’s products in developing AI infrastructure has been a game-changer for the company. In the third quarter of fiscal 2026, AI infrastructure orders taken from hyperscalers totaled $1.9 billion compared with $600 million in the year-ago quarter. Cisco raised its fiscal 2026 hyperscaler AI infrastructure order outlook from $5 billion to $9 billion and increased expected AI infrastructure revenues from $3 billion to $4 billion.
ALAB’s Share Price Performance, Valuation, and EstimatesALAB shares have surged 105.4% in the year-to-date period, outperforming the broader Zacks Computer & Technology sector’s increase of 17.2%. The Zacks Internet - Software industry has decreased 11.4% in the same time frame.
ALAB Stock’s Performance
Image Source: Zacks Investment Research
ALAB stock is trading at a premium, with a forward 12-month Price/Sales of 32.5X compared with the Internet - Software industry’s 3.76X. ALAB has a Value Score of F.
ALAB’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $2.92 per share, which has been unchanged over the past 30 days. This suggests 58.70% year-over-year growth.
ALAB’s Zacks RankAstera Labs currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways Astronics shares rose 10.3% in three months, beating industry and sector declines.ATRO benefits from defense demand, air travel recovery and a Boeing 737 MAX contract win.ATRO shows strong estimates growth, discounted valuation, solid liquidity and rising earnings outlook. Shares of Astronics Corporation (ATRO - Free Report) have surged 10.3% in the past three months, outperforming both the Zacks Aerospace-Defense Equipment industry’s decrease of 9.1% and the broader Zacks Aerospace sector’s decline of 4.4%. It also came above the S&P 500’s decline of 5.2% in the same time frame.
Image Source: Zacks Investment Research
Other industry players like Hexcel (HXL - Free Report) and Curtiss-Wright Corp. (CW - Free Report) have also delivered a similar stellar performance in the past three months. Shares of HXL and CW have risen 0.2% and 20%, respectively, in the said period.
With ATRO’s strong performance in the market, many investors may feel encouraged to buy right away. However, before taking that step, it’s important to evaluate whether the company has the fundamental strength to support long-term growth or if the recent surge is temporary. Understanding the stability of ATRO’s growth prospects can help investors make a well-informed decision.
Tailwinds for ATROAstronics’ recent performance reflects a combination of solid industry demand, strategic positioning and contract wins. The company is a specialized provider of advanced electrical power, connectivity, lighting and test systems for the global aerospace and defense industry, serving both commercial and military aviation markets. This diversified exposure allows it to benefit from rising defense budgets as well as the continued recovery in global air travel.
Favorable demand trends are supporting growth across its end markets. Increasing defense spending is driving sustained demand for military aircraft, while airlines are investing in cabin upgrades, including in-seat power and in-flight connectivity systems. These trends align well with Astronics’ core offerings. The company secured a contract from Boeing in March 2026 to supply fuel tank access doors for the 737 MAX program, strengthening its long-standing relationship with the aircraft manufacturer and enhancing revenue visibility.
Astronics also benefits from structural advantages such as long product life cycles and high switching costs, which help build durable customer relationships and support recurring revenue streams. With the aerospace industry continuing to recover, these factors provide a solid foundation for long-term growth and margin improvement.
Moreover, management remains focused on improving profitability through cost discipline, supply-chain stabilization and prudent capital allocation. As production volumes increase, the company is expected to gain from operating leverage, leading to gradual margin expansion and improved free cash flow. A strong backlog, particularly within its aerospace segment, further supports visibility into future revenues.
ATRO’s EstimatesThe Zacks Consensus Estimate for 2026 sales implies year-over-year growth of 11.6%, while that for 2027 sales indicates an improvement of 7.1%.
The consensus estimate for 2026 earnings implies year-over-year growth of 30.4%, while that for 2027 earnings indicates an improvement of 20%.
Image Source: Zacks Investment Research
Further, the upward revision in its 2026 and 2027 earnings estimates over the past 60 days suggests investors’ increasing confidence in this stock’s earnings generation capabilities.
Image Source: Zacks Investment Research
ATRO Stock Reflects Discounted ValuationIn terms of valuation, ATRO’s forward 12-month price-to-sales (P/S) is 2.59X, a discount to the industry average of 11.73X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with its industry average.
Image Source: Zacks Investment Research
Other industry peers, on the contrary, are trading at a premium to ATRO. While Hexcel is trading at a forward 12-month P/S of 2.77X, Curtiss-Wright is trading at 6.80X.
ATRO’s Liquidity PositionATRO has a current ratio of 3.10. The ratio, being more than one, indicates that ATRO possesses sufficient capital to pay off its short-term debt obligations.
Hexcel has a current ratio of 5.07, while Curtiss-Wright has a current ratio of 12.52.
ATRO’s ROICATRO’s Return on Invested Capital stands at 17.29%, well above the industry average of 5.80%. This indicates that the company is generating strong returns on its investments and using its capital far more efficiently than most of its peers.
Should You Buy ATRO Stock Now?Astronics presents an attractive case for investors, supported by its discounted valuation, improving earnings outlook, solid growth forecasts, strong liquidity position and robust performance on the bourses. Thus, investors looking for exposure to the aerospace and defense space may consider buying this stock at current levels.
Astronics currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Most of us have heard the dictum "the trend is your friend." And this is undeniably the key to success when it comes to short-term investing or trading. But it isn't easy to ensure the sustainability of a trend and profit from it.
Often, the direction of a stock's price movement reverses quickly after taking a position in it, making investors incur a short-term capital loss. So, it's important to ensure that there are enough factors -- such as sound fundamentals, positive earnings estimate revisions, etc. -- that could keep the momentum in the stock going.
Investors looking to make a profit from stocks that are currently on the move may find our "Recent Price Strength" screen pretty useful. This predefined screen comes handy in spotting stocks that are on an uptrend backed by strength in their fundamentals, and trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.
There are several stocks that passed through the screen and Astronics Corporation (ATRO - Free Report) is one of them. Here are the key reasons why this stock is a solid choice for "trend" investing.
A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. ATRO is quite a good fit in this regard, gaining 1.9% over this period.
However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 8.8% over the past four weeks ensures that the trend is still in place for the stock of this company.
Moreover, ATRO is currently trading at 84.1% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout.
Looking at the fundamentals, the stock currently carries a Zacks Rank #2 (Buy), which means it is in the top 20% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance.
So, the price trend in ATRO may not reverse anytime soon.
In addition to ATRO, there are several other stocks that currently pass through our "Recent Price Strength" screen. You may consider investing in them and start looking for the newest stocks that fit these criteria.
This is not the only screen that could help you find your next winning stock pick. Based on your personal investing style, you may choose from over 45 Zacks Premium Screens that are strategically created to beat the market.
However, keep in mind that the key to a successful stock-picking strategy is to ensure that it produced profitable results in the past. You could easily do that with the help of the Zacks Research Wizard. In addition to allowing you to backtest the effectiveness of your strategy, the program comes loaded with some of our most successful stock-picking strategies.
Click here to sign up for a free trial to the Research Wizard today.
For those looking to find strong Aerospace stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Astronics Corporation (ATRO - Free Report) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Aerospace sector should help us answer this question.
Astronics Corporation is a member of our Aerospace group, which includes 67 different companies and currently sits at #5 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. Astronics Corporation is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for ATRO's full-year earnings has moved 6.1% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
Based on the latest available data, ATRO has gained about 37% so far this year. Meanwhile, the Aerospace sector has returned an average of 6.3% on a year-to-date basis. This means that Astronics Corporation is performing better than its sector in terms of year-to-date returns.
Another Aerospace stock, which has outperformed the sector so far this year, is BWX Technologies (BWXT - Free Report) . The stock has returned 34.7% year-to-date.
The consensus estimate for BWX Technologies' current year EPS has increased 8.1% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
Looking more specifically, Astronics Corporation belongs to the Aerospace - Defense Equipment industry, a group that includes 37 individual stocks and currently sits at #142 in the Zacks Industry Rank. This group has gained an average of 6.6% so far this year, so ATRO is performing better in this area. BWX Technologies is also part of the same industry.
Going forward, investors interested in Aerospace stocks should continue to pay close attention to Astronics Corporation and BWX Technologies as they could maintain their solid performance.
Key Takeaways Astronics and HEICO benefit from rising air travel, fleet expansion and higher defense spending demand.ATRO drives growth via new in-seat and wireless charging solutions targeting evolving passenger needs.ATRO outperforms HEI in stock gains, valuation and ROE, making it a more attractive investment choice. Growing global air travel is leading to larger aircraft fleet, while older planes are increasing the need for maintenance and aftermarket services. These trends are supporting demand for aerospace companies like Astronics Corporation (ATRO - Free Report) and HEICO Corporation (HEI - Free Report) . At the same time, higher defense spending is driving demand for advanced avionics, electronics and power systems used in military aircraft.
Overall, fleet expansion, defense upgrades and ongoing technological developments are key growth drivers for both companies.
Astronics focuses on electrical power systems, lighting, connectivity and cabin electronics for commercial and defense aircraft. In comparison, HEICO is a major global supplier of aircraft parts, including jet engines and other critical components.
With trends like aircraft electrification, digitalization and continued fleet growth, investors may wonder which company is better positioned for long-term growth. A closer look at ATRO and HEI can help identify which stock offers stronger potential.
Tailwinds for ATROAstronics continues to strengthen its position in the aerospace market through ongoing product innovation aimed at enhancing passenger experience and meeting evolving airline needs.
In April 2026, the company introduced its EmPower 1327-27 Dual USB-Type-C In-Seat Power Outlet, offering high-speed charging to support the increasing power demands of modern air travelers. As passengers rely more on personal electronic devices during flights, such advanced in-seat power solutions are becoming a key differentiator for airlines.
Astronics also launched the EmPower Qi21 Wireless Charging Module, marking a significant step forward in onboard power technology. This new solution enables efficient and reliable wireless charging for both passengers and crew, aligning with the broader industry shift toward more seamless and cable-free cabin experiences.
These product launches highlight Astronics’ focus on innovation and its ability to adapt to changing customer preferences. By expanding its portfolio of advanced cabin power solutions, the company is well-positioned to capture growing demand in the commercial aerospace market and support long-term growth.
Tailwinds for HEIHEICO continues to strengthen its market position through strategic acquisitions and participation in high-profile aerospace programs, supporting long-term growth and investor confidence.
In April 2026, HEICO highlighted its involvement in the Artemis II mission led by NASA, with its subsidiaries supplying mission-critical electronic components. 3D PLUS provided advanced memory devices for both the Space Launch System and the Orion spacecraft, while Exxelia contributed capacitors and magnetics used in the Orion spacecraft. This participation underscores HEICO’s capabilities in delivering high-reliability components for complex space missions.
HEICO has also remained active on the acquisition front. In April 2026, the company’s Electronic Technologies Group acquired a majority stake in Southwest Antennas, expanding its presence in advanced communication systems.
These strategic initiatives are expected to enhance HEICO’s product portfolio, expand its technological expertise and support steady growth across both its electronic technologies and aviation services businesses.
How Does the Zacks Consensus Estimate Compare for ATRO & HEI?The Zacks Consensus Estimate for ATRO’s 2026 sales and EPS implies an improvement of 11.6% and 30.4%, respectively, from the year-ago quarter’s reported figures. ATRO’s 2027 EPS estimates have improved over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HEI’s fiscal 2026 sales and EPS implies an improvement of 12.7% and 13.5%, respectively, from the year-ago quarter’s reported figures. The stock’s fiscal 2026 and 2027 EPS estimates have improved over the past 60 days.
Image Source: Zacks Investment Research
Stock Price Performance: ATRO vs. HEIIn the past year, ATRO has outperformed HEI. While ATRO’s shares surged 224.2%, HEI rose 6.5%.
Image Source: Zacks Investment Research
Astronics’ Valuation More Attractive Than HeicoAstronics is trading at a discount, with its forward 12-month price/earnings (P/E F12M) of 26.31X being lower than HEI’s P/E F12M of 45.28X.
Image Source: Zacks Investment Research
ATRO’s ROE Better Than HEIA comparison of Return on Equity (ROE) shows that ATRO is more efficient at generating profits from its equity, with an ROE of 39.95% compared with HEI’s 16.57%.
ConclusionRising global air traffic, ongoing fleet expansion and higher defense spending are expected to support steady demand for aerospace service providers such as Astronics and HEICO.
While both companies are positioned to deliver solid revenue and earnings growth, Astronics stands out in terms of valuation and profitability metrics. Its better valuation, along with a stronger ROE, makes ATRO a more attractive choice for investors seeking a balanced combination of long-term growth and value.
ATRO currently carries a Zacks Rank #2 (Buy) at present, while HEI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
EAST AURORA, N.Y.--(BUSINESS WIRE)--Astronics Corporation (Nasdaq: ATRO) Announces Fiscal Year 2026 First Quarter Financial Results Conference Call and Webcast.
The Aerospace group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has Astronics Corporation (ATRO - Free Report) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.
Astronics Corporation is one of 67 companies in the Aerospace group. The Aerospace group currently sits at #6 within the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. Astronics Corporation is currently sporting a Zacks Rank of #2 (Buy).
The Zacks Consensus Estimate for ATRO's full-year earnings has moved 2.5% higher within the past quarter. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
According to our latest data, ATRO has moved about 23.5% on a year-to-date basis. Meanwhile, the Aerospace sector has returned an average of -4.2% on a year-to-date basis. As we can see, Astronics Corporation is performing better than its sector in the calendar year.
Another stock in the Aerospace sector, BWX Technologies (BWXT - Free Report) , has outperformed the sector so far this year. The stock's year-to-date return is 20.4%.
Over the past three months, BWX Technologies' consensus EPS estimate for the current year has increased 8%. The stock currently has a Zacks Rank #2 (Buy).
Looking more specifically, Astronics Corporation belongs to the Aerospace - Defense Equipment industry, a group that includes 37 individual stocks and currently sits at #155 in the Zacks Industry Rank. This group has lost an average of 1.2% so far this year, so ATRO is performing better in this area. BWX Technologies is also part of the same industry.
Astronics Corporation and BWX Technologies could continue their solid performance, so investors interested in Aerospace stocks should continue to pay close attention to these stocks.
Most of us have heard the dictum "the trend is your friend." And this is undeniably the key to success when it comes to short-term investing or trading. But it isn't easy to ensure the sustainability of a trend and profit from it.
Often, the direction of a stock's price movement reverses quickly after taking a position in it, making investors incur a short-term capital loss. So, it's important to ensure that there are enough factors -- such as sound fundamentals, positive earnings estimate revisions, etc. -- that could keep the momentum in the stock going.
Our "Recent Price Strength" screen, which is created on a unique short-term trading strategy, could be pretty useful in this regard. This predefined screen makes it really easy to shortlist the stocks that have enough fundamental strength to maintain their recent uptrend. Also, the screen passes only the stocks that are trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.
Astronics Corporation (ATRO - Free Report) is one of the several suitable candidates that passed through the screen. Here are the key reasons why it could be a profitable bet for "trend" investors.
A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. ATRO is quite a good fit in this regard, gaining 3.7% over this period.
However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 7.3% over the past four weeks ensures that the trend is still in place for the stock of this company.
Moreover, ATRO is currently trading at 90.2% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout.
Looking at the fundamentals, the stock currently carries a Zacks Rank #2 (Buy), which means it is in the top 20% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance.
So, the price trend in ATRO may not reverse anytime soon.
In addition to ATRO, there are several other stocks that currently pass through our "Recent Price Strength" screen. You may consider investing in them and start looking for the newest stocks that fit these criteria.
This is not the only screen that could help you find your next winning stock pick. Based on your personal investing style, you may choose from over 45 Zacks Premium Screens that are strategically created to beat the market.
However, keep in mind that the key to a successful stock-picking strategy is to ensure that it produced profitable results in the past. You could easily do that with the help of the Zacks Research Wizard. In addition to allowing you to backtest the effectiveness of your strategy, the program comes loaded with some of our most successful stock-picking strategies.
Click here to sign up for a free trial to the Research Wizard today.
Key Takeaways Astronics launched new in-seat and wireless charging solutions for commercial aerospace customers.ATRO's 2026 sales and earnings estimates indicate 11.6% and 30.4% year-over-year growth.ATRO trades below industry valuation averages while maintaining strong liquidity and ROIC levels. Astronics Corporation (ATRO - Free Report) stock has gained 1.9% in the past month, outperforming the Zacks Aerospace-Defense Equipment industry’s growth of 1.2% and the broader Zacks Aerospace sector’s decline of 4.6%. However, it came below the S&P 500’s return of 8.5% in the same time frame.
Image Source: Zacks Investment Research
Other industry players like Hexcel (HXL - Free Report) and Rocket Lab Corporation (RKLB - Free Report) have also delivered a similar stellar performance in the past month. HXL and RKLB shares have risen 14.9% and 13.7%, respectively, in the said period.
ATRO’s recent gains may draw investor attention. However, before investing, it is important to evaluate whether the company’s fundamentals are strong enough to support sustained long-term growth or if the recent rally may be temporary. A closer look at ATRO’s growth stability can help investors make a more informed decision.
Tailwinds for ATROAstronics is strengthening its presence in the aerospace market through continuous product innovation focused on improving passenger experience and addressing evolving airline requirements.
In April 2026, the company launched its EmPower 1327-27 Dual USB-Type-C In-Seat Power Outlet, designed to deliver faster charging capabilities to meet the rising power needs of modern travelers. With passengers increasingly depending on personal electronic devices during flights, advanced in-seat charging solutions have become an important feature for airlines.
The company also introduced the EmPower Qi21 Wireless Charging Module, representing another advancement in onboard power technology. This solution provides efficient wireless charging for both passengers and crew, supporting the industry’s growing preference for more convenient and cable-free cabin environments.
These new product introductions reflect Astronics’ commitment to innovation and its ability to respond to changing customer demands. By broadening its portfolio of advanced cabin power solutions, the company remains well-positioned to benefit from increasing demand in the commercial aerospace market and support its long-term growth prospects.
ATRO’s EstimatesThe Zacks Consensus Estimate for 2026 sales implies year-over-year growth of 11.6%. The consensus estimate for 2026 earnings implies year-over-year growth of 30.4%.
Image Source: Zacks Investment Research
Further, the upward revision in the company’s 2027 earnings estimates over the past 60 days suggests investors’ increasing confidence in this stock’s earnings generation capabilities.
Image Source: Zacks Investment Research
ATRO Stock Reflects Discounted ValuationIn terms of valuation, ATRO’s forward 12-month price-to-sales (P/S) is 2.74X, a discount to the industry average of 12.09X. This suggests that investors will pay a lower price than the company's expected sales growth compared with its industry average.
Image Source: Zacks Investment Research
Other industry peers, on the contrary, are trading at a premium to ATRO. While Hexcel is trading at a forward 12-month P/S of 3.33X, Rocket Lab is trading at 49.49X.
Liquidity PositionATRO has a current ratio of 3.10. The ratio, being more than one, indicates that ATRO possesses sufficient capital to pay off its short-term debt obligations.
Its industry peers, Hexcel and Rocket Lab, also maintain current ratios above one. HXL has a current ratio of 2.45, while RKLB holds 4.08.
ROICATRO’s Return on Invested Capital stands at 17.29%, well above the industry average of 5.83%. This indicates that the company is generating strong returns on its investments and using its capital far more efficiently than most of its peers.
Should You Buy ATRO Stock Now?Astronics’ discounted valuation, improving earnings outlook, healthy liquidity position and strong return on invested capital highlight its solid financial position and growth potential. Its continued focus on product innovation and expanding aerospace offerings should further support long-term business growth.
Considering these factors, ATRO appears to be a solid choice for investors seeking long-term growth opportunities in the aerospace market.
Astronics currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
EAST AURORA, N.Y.--(BUSINESS WIRE)--Astronics Corporation (Nasdaq: ATRO) (“Astronics” or the “Company”), a leading supplier of advanced technologies and products to the global aerospace, defense, and other mission critical industries, today reported financial results for the three months ended April 4, 2026. Financial results include the acquisition of Bühler Motor Aviation (“BMA”) on October 13, 2025.
Peter J. Gundermann, Chairman, President and Chief Executive Officer, commented, “We are off to a strong start in 2026 with strong growth, expanded margins and record bookings and backlog. Our team’s focus on operational execution combined with higher volume delivered adjusted EBITDA1 margin of 16.4%. Demand across markets for our products remains robust, as evidenced by record bookings that were driven by strength in both Aerospace and Test. Our activity level is expected to pick up noticeably in the coming quarters and we believe we are well-positioned to capitalize on the opportunities ahead.”
First Quarter Results
Three Months Ended
($ in thousands)
April 4, 2026
March 29, 2025
% Change
Sales
$
230,619
$
205,936
12.0
%
Gross profit
$
75,133
$
60,849
23.5
%
Gross margin
32.6
%
29.5
%
Income from operations
$
27,230
$
13,137
107.3
%
Operating margin %
11.8
%
6.4
%
Net income
$
25,540
$
9,528
168.1
%
Net income %
11.1
%
4.6
%
Adjusted operating income2
$
29,560
$
22,619
30.7
%
Adjusted operating margin %2
12.8
%
11.0
%
Adjusted net income2
$
22,501
$
16,973
32.6
%
Adjusted EBITDA2
$
37,901
$
30,739
23.3
%
Adjusted EBITDA margin %2
16.4
%
14.9
%
First Quarter 2026 Results (compared with the prior-year period, unless noted otherwise)
Growth in sales was driven by the Aerospace segment’s continued strength in demand primarily from the Commercial Transport market. Aerospace sales increased $22.4 million, or 11.7%, while Test Systems sales grew $2.2 million, or 15.4%.
Gross profit increased $14.3 million to $75.1 million, or 32.6% of sales, an improvement over gross margin of 29.5% in the comparator quarter. Gross profit growth and margin expansion were primarily attributable to higher volume, improved productivity, and a $2.8 million catch-up of profit on the MV-75 program based on revised program estimates. This was partially offset by a $1.7 million increase in tariff expenses. In the prior year, first quarter consolidated sales and gross profit was negatively impacted by a $1.9 million revision of estimated costs to complete a long-term mass transit contract in the Test Systems segment.
Selling, general and administrative expenses (“SG&A”) decreased $0.8 million. Litigation-related expenses were down $1.2 million, and the prior-year period included a $6.2 million reserve adjustment to the damage award relating to the patent infringement dispute in the UK. Appeals to the UK damage award are scheduled to be heard in July 2026. These decreases were mostly offset by higher wages and benefits, higher incentive-based compensation expenses driven by increased profitability, and incremental expenses related to the acquired BMA business. R&D was up $1.0 million reflecting the timing of projects.
Operating margin expanded 540 basis points and adjusted operating margin2 expanded 180 basis points as a result of higher volume and improved productivity in the Aerospace segment, coupled with savings from the recent Test Systems cost rationalization activities.
Interest expense was down $0.8 million, or 25.8%, on lower rates following the September 2025 refinancing activities. Tax benefit in the quarter of $0.8 million was related to a $2.7 million discrete adjustment for the expected benefit of a stock-based compensation deduction, a valuation allowance reversal, and research and development costs expected to be expensed. Tax expense in the prior year period was partially offset by a $1.1 million discrete adjustment to reverse certain federal and state deferred tax liabilities.
Consolidated net income of $0.67 per diluted share improved from $0.26 per diluted share in the prior-year period from stronger operating profit, lower interest expense and lower tax. Adjusted EBITDA2 increased 23.3% to $37.9 million, and adjusted EBITDA margin2 expanded 150 basis points to 16.4% of consolidated sales.
Record bookings of $290.4 million in the quarter resulted in a book-to-bill ratio of 1.26:1. For the trailing twelve months, bookings totaled $935.1 million and the book-to-bill ratio was 1.05:1. Backlog at the end of the quarter was $734.3 million, the highest in the Company’s history.
Aerospace Segment Review (compared with the prior-year period, unless noted otherwise)
Aerospace segment sales of $213.8 million increased $22.4 million, or 11.7%. Sales in the Commercial Transport market increased $18.9 million, or 13.7%. Growth was primarily related to increased demand for seat motion and lighting and safety products. General Aviation sales increased $6.2 million, or 40.7%, to $21.4 million due to higher inflight entertainment & connectivity (“IFEC”) product sales to the VVIP market. Military Aircraft sales remained consistent with the prior-year period. Other sales decreased $2.9 million as the Company has wound down its non-core contract manufacturing arrangements.
Aerospace segment operating profit of $35.3 million, or 16.5% of sales, improved over the prior-year period reflecting the leverage gained on higher volume, improving production efficiencies, the cumulative catch-up of profit on the MV-75 program based on revised program estimates, and a $7.0 million decrease in litigation-related expenses and legal reserve adjustments related to the UK patent dispute previously discussed. Adjusted Aerospace operating profit2 increased 20.0% to $37.2 million, or 17.4% of sales, a 120-basis point expansion over the comparator quarter.
Aerospace bookings were $264.4 million for a book-to-bill ratio of 1.24:1. Record backlog for the Aerospace segment was $651.4 million at quarter end.
Mr. Gundermann commented, “Our Aerospace business had a solid first quarter with our second-highest quarterly sales total, trailing only the preceding fourth quarter. Strong sales led to a 16.5% operating margin. Market demand for our products remains strong and we are well positioned to set new records in the coming periods.”
Test Systems Segment Review (compared with the prior-year period, unless noted otherwise)
Test Systems segment sales of $16.8 million were up $2.2 million from the comparator quarter in 2025. Segment sales in the prior-year period were negatively impacted by a $1.9 million revision of estimated costs to complete a certain long-term mass transit Test contract reducing revenue recognized in the period.
Test Systems segment operating profit was $0.4 million, compared with an operating loss of $2.2 million in the first quarter of 2025. Test Systems profitability, while improving, continues to be negatively affected by mix and under absorption of fixed costs at current volume levels.
Bookings for the Test Systems segment in the quarter were $26.1 million. The book-to-bill ratio for the quarter was 1.55:1. Backlog for the Test Systems segment was $83.0 million at quarter end.
Mr. Gundermann commented, “Results in our Test business continue to confirm that our significant cost-cutting and efficiency actions have been effective, and we expect results to improve significantly as the radio test program for the U.S. Army begins. We understand that a production award is on track to be issued in the coming weeks, with the production phase of the program accelerating in the second half of the year.”
Balance Sheet and Liquidity
Cash provided by operations in the first quarter of 2026 was $10.6 million, reflecting higher cash earnings offset by higher working capital requirements, including higher inventory levels to support anticipated revenue growth in the coming quarters. Capital expenditures in the quarter were $11.2 million. Elevated capital expenditures reflect necessary catch-up investments on previously deferred spending as well as the consolidation of operations and capacity improvement in a new Seattle facility. The Company expects to be free cash flow positive for the remainder of the year.
Long-term debt was relatively unchanged at quarter-end at $334.9 million. The Company had available liquidity of $231.8 million at quarter-end, including $19.1 million in available cash.
2026 Outlook
Astronics expects 2026 revenue for the year to be in the range of $970 million to $1 billion, which would surpass the record level sales of 2025. The midpoint of the revised range would be a 14% increase over 2025 sales.
Record backlog at the end of the first quarter was $734.3 million, of which approximately 81% is expected to drive revenue over the next twelve months. Mr. Gundermann concluded, “We expect second quarter sales of $245 million to $250 million, which will be a new record for the Company, and we expect our revenue rate in the second half to rise further from there. Demand remains strong for our products and capabilities, and all indications point to a very strong 2026 for our Company.”
Planned capital expenditures in 2026 are expected to be in the range of $40 million to $45 million driven largely by costs associated with the Seattle operation consolidation, which will conclude in the second quarter. In addition, the Company is in the early phases of implementing a new global resource planning system. Astronics expects to spend approximately $15 million to $17 million on this project in 2026, excluding reallocated internal operating costs. Approximately $2 million to $3 million of the investment will be incremental operating expense with the remainder to be capitalized and reported as a cash outflow from operations. The total cost of the project over five years, excluding reallocated internal operating expenses, is expected to be approximately $35 million to $40 million of which $25 million is expected to be capitalized.
First Quarter 2026 Webcast and Conference Call
The Company will host a teleconference today at 4:45 p.m. ET. During the teleconference, management will review the financial and operating results for the period and discuss Astronics’ corporate strategy and outlook. A question-and-answer session will follow.
The Astronics conference call can be accessed by calling (201) 493-6784. The listen-only audio webcast can be monitored at investors.astronics.com. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 13759858. The telephonic replay will be available from 8:00 p.m. on the day of the call through Tuesday, May 26, 2026. The webcast replay can be accessed via the investor relations section of the Company’s website where a transcript will also be posted once available.
About Astronics Corporation
Astronics Corporation (Nasdaq: ATRO) serves the world’s aerospace, defense, and other mission-critical industries with proven innovative technology solutions. Astronics works side-by-side with customers, integrating its array of power, connectivity, lighting, structures, interiors, and test technologies to solve complex challenges. For over 50 years, Astronics has delivered creative, customer-focused solutions with exceptional responsiveness. Today, global airframe manufacturers, airlines, military branches, completion centers, and Fortune 500 companies rely on the collaborative spirit and innovation of Astronics. The Company’s strategy is to increase its value by developing technologies and capabilities that provide innovative solutions to its targeted markets.
Safe Harbor Statement
This news release contains forward-looking statements as defined by the Securities Exchange Act of 1934. One can identify these forward-looking statements by the use of the words “expect,” “anticipate,” “plan,” “may,” “will,” “estimate,” “feeling” or other similar expressions and include all statements with regard to the Company’s 2026 outlook including the level of activity in coming quarters, the expectation of setting new records in coming periods, the timing of the receipt of production orders for U.S. Army radio test set program, the level of profitability contribution from the Test segment with its onset, and the rate of revenue growth in the second half of 2026. The forward-looking statements also include all statements related to achieving any revenue or profitability expectations, expectations of continued growth, the level of liquidity, the level of cash generation and free cash flow, the level of demand by customers and markets and the amount of expected capital expenditures, the amount of investment in an ERP system, the amount of backlog to be recognized as revenue over the next twelve months, and statements regarding the amount of opportunities available to be executed. Because such statements apply to future events, they are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements. Important factors that could cause actual results to differ materially from what may be stated here include the trend in growth with passenger power and connectivity on airplanes, the state of the aerospace and defense industries, the market acceptance of newly developed products, internal production capabilities, the timing of orders received, the status of customer certification processes and delivery schedules, the demand for and market acceptance of new or existing aircraft which contain the Company’s products, the impact of regulatory activity and public scrutiny on production rates of a major U.S. aircraft manufacturer, the need for new and advanced test equipment, customer preferences and relationships, the effectiveness of the Company’s supply chain and execution on opportunities, and other factors which are described in filings by Astronics with the Securities and Exchange Commission. Except as required by applicable law, the Company assumes no obligation to update forward-looking information in this news release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.
Use of Non-GAAP Financial Metrics and Additional Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Astronics provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from non-GAAP financial measures used by other companies. Astronics management uses these measures for reviewing the financial results of Astronics for budget planning purposes and for making operational and financial decisions. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, help investors evaluate Astronics core operating and financial performance and business trends consistent with how management evaluates such performance and trends.
FINANCIAL TABLES FOLLOW
ASTRONICS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(Unaudited, $ in thousands except per share amounts)
Three Months Ended
4/4/2026
3/29/2025
Sales
$
230,619
$
205,936
Cost of products sold
155,486
145,087
Gross profit
75,133
60,849
Gross margin
32.6
%
29.5
%
Research and development expenses
12,089
11,067
Selling, general and administrative
35,814
36,645
SG&A % of sales
15.5
%
17.8
%
Income from operations
27,230
13,137
Operating margin
11.8
%
6.4
%
Other expense (income)
109
(187
)
Interest expense, net
2,336
3,150
Income before tax
24,785
10,174
Income tax (benefit) expense
(755
)
646
Net income
$
25,540
$
9,528
Net income % of sales
11.1
%
4.6
%
Basic earnings per share:
$
0.71
$
0.27
Diluted earnings per share:3
$
0.67
$
0.26
Weighted average diluted shares outstanding (in thousands)
38,223
42,957
ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEETS
($ in thousands)
(unaudited)
4/4/2026
12/31/2025
ASSETS
Cash and cash equivalents
$
11,867
$
18,180
Accounts receivable, net of allowance for estimated credit losses
217,024
204,672
Inventories
211,945
196,860
Prepaid expenses and other current assets
27,792
18,027
Total current assets
468,628
437,739
Property, plant and equipment, net of accumulated depreciation
115,481
107,078
Operating right-of-use assets
32,626
32,269
Other assets
13,742
11,316
Intangible assets, net of accumulated amortization
52,320
55,353
Goodwill
64,346
62,923
Total assets
$
747,143
$
706,678
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
55,873
$
41,080
Current operating lease liabilities
5,986
5,802
Accrued expenses and other current liabilities
66,183
68,324
Customer advances and deferred revenue
29,666
26,069
Total current liabilities
157,708
141,275
Long-term debt
334,885
334,451
Long-term operating lease liabilities
38,239
38,101
Other liabilities
54,609
52,777
Total liabilities
585,441
566,604
Shareholders’ equity:
Common stock
386
385
Accumulated other comprehensive loss
(5,438
)
(4,410
)
Other shareholders’ equity
166,754
144,099
Total shareholders’ equity
161,702
140,074
Total liabilities and shareholders’ equity
$
747,143
$
706,678
ASTRONICS CORPORATION
CONSOLIDATED CASH FLOWS DATA
Three Months Ended
(Unaudited, $ in thousands)
4/4/2026
3/29/2025
Cash flows from operating activities:
Net income
$
25,540
$
9,528
Adjustments to reconcile net income to cash from operating activities:
Non-cash items:
Depreciation and amortization
5,894
5,588
Amortization of deferred financing fees
607
602
Provisions for non-cash losses on inventory and receivables
1,441
1,728
Equity-based compensation expense
2,556
2,345
Deferred tax expense (benefit)
62
(1,125
)
Operating lease non-cash expense
1,463
1,550
Non-cash litigation provision adjustment
—
6,228
Other
681
(214
)
Cash flows from changes in operating assets and liabilities:
Accounts receivable
(13,420
)
(2,037
)
Inventories
(16,404
)
515
Accounts payable
14,997
2,867
Operating lease liabilities
(1,515
)
(1,071
)
Accrued expenses
(6,655
)
(11,514
)
Income taxes
(982
)
959
Cloud computing implementation costs
(2,370
)
—
Customer advance payments and deferred revenue
3,614
2,776
Supplemental retirement plan liabilities
(181
)
(101
)
Other assets and liabilities
(4,722
)
2,018
Net cash provided by operating activities
10,606
20,642
Cash flows from investing activities:
Capital expenditures
(11,160
)
(2,105
)
Net cash used by investing activities
(11,160
)
(2,105
)
Cash flows from financing activities:
Proceeds from long-term debt
30,000
1,143
Principal payments on long-term debt
(30,000
)
(10,000
)
Financing-related costs
—
(740
)
Stock award activity
(5,441
)
(1,730
)
Other
(60
)
(44
)
Net cash used by financing activities
(5,501
)
(11,371
)
Effect of exchange rates on cash
(258
)
354
(Decrease) increase in cash and cash equivalents and restricted cash
(6,313
)
7,520
Cash and cash equivalents and restricted cash at beginning of period
18,180
18,428
Cash and cash equivalents and restricted cash at end of period
$
11,867
$
25,948
Supplemental disclosure of cash flow information
Non-cash investing activities:
Capital expenditures in accounts payable
$
425
$
—
Interest paid
$
2,668
$
2,724
Income taxes refunded, net of payments
$
195
$
827
ASTRONICS CORPORATION
SEGMENT SALES AND PROFIT
(Unaudited, $ in thousands)
Three Months Ended
4/4/2026
3/29/2025
Sales
Aerospace
$
213,843
$
191,388
Less inter-segment
(23
)
(13
)
Total Aerospace
213,820
191,375
Test Systems
16,824
14,592
Less inter-segment
(25
)
(31
)
Total Test Systems
16,799
14,561
Total consolidated sales
230,619
205,936
Segment gross profit and margins
Aerospace
70,693
58,483
33.1
%
30.6
%
Test Systems
4,440
2,366
26.4
%
16.2
%
Total gross profit
75,133
60,849
32.6
%
29.5
%
Segment operating profit and margins
Aerospace
35,332
22,264
16.5
%
11.6
%
Test Systems
403
(2,223
)
2.4
%
(15.3
)%
Total segment operating profit
35,735
20,041
Interest expense
2,336
3,150
Corporate expenses and other
8,614
6,717
Income before taxes
$
24,785
$
10,174
Beginning in the current year, the Company reorganized its product line structure to align with changes in internal reporting. Refer to the Supplemental Prior Period Tables within this release for prior-year recast of disaggregation of sales by product line to conform with the updated, current-period presentation. Please refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 4, 2026 for additional details.
ASTRONICS CORPORATION
SALES BY MARKET
(Unaudited, $ in thousands)
Three Months Ended
2026 YTD
4/4/2026
3/29/2025
% Change
% of Sales
Aerospace Segment
Commercial Transport
$
156,419
$
137,542
13.7
%
67.8
%
Military Aircraft
33,502
33,263
0.7
%
14.5
%
General Aviation
21,449
15,243
40.7
%
9.3
%
Other
2,450
5,327
(54.0
)%
1.1
%
Aerospace Total
213,820
191,375
11.7
%
92.7
%
Test Systems Segment
Government & Defense
16,799
14,561
15.4
%
7.3
%
Total Sales
$
230,619
$
205,936
12.0
%
SALES BY PRODUCT LINE4
(Unaudited, $ in thousands)
Three Months Ended
Recast
2026 YTD
4/4/2026
3/29/2025
% Change
% of Sales
Aerospace Segment
Inflight Entertainment & Connectivity
$
110,748
$
103,110
7.4
%
48.1
%
Lighting & Safety
52,807
51,957
1.6
%
22.9
%
Flight Critical Electrical Power
24,763
21,314
16.2
%
10.7
%
Seat Motion
19,879
6,672
197.9
%
8.6
%
Other
5,623
8,322
(32.4
)%
2.4
%
Aerospace Total
213,820
191,375
11.7
%
92.7
%
Test Systems
16,799
14,561
15.4
%
7.3
%
Total
$
230,619
$
205,936
12.0
%
ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
(Unaudited, $ in thousands)
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Trailing Twelve Months
6/28/2025
9/27/2025
12/31/2025
4/4/2026
4/4/2026
Sales
Aerospace
$
193,626
$
192,725
$
219,593
$
213,820
$
819,764
Test Systems
11,052
18,722
20,474
16,799
67,047
Total Sales
$
204,678
$
211,447
$
240,067
$
230,619
$
886,811
Bookings
Aerospace
$
150,636
$
191,859
$
237,327
$
264,381
$
844,203
Test Systems
26,390
18,532
19,902
26,067
90,891
Total Bookings
$
177,026
$
210,391
$
257,229
$
290,448
$
935,094
Backlog5
Aerospace
$
570,913
$
572,459
$
600,803
$
651,364
Test Systems
74,454
74,264
73,692
82,960
Total Backlog
$
645,367
$
646,723
$
674,495
$
734,324
N/A
Book:Bill Ratio
Aerospace
0.78
1.00
1.08
1.24
1.03
Test Systems
2.39
0.99
0.97
1.55
1.36
Total Book:Bill
0.86
1.00
1.07
1.26
1.05
ASTRONICS CORPORATION
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(Unaudited, $ in thousands)
Consolidated
Three Months Ended
4/4/2026
3/29/2025
Net income
$
25,540
$
9,528
Add back (deduct):
Interest expense
2,336
3,150
Income tax (benefit) expense
(755
)
646
Depreciation and amortization expense
5,894
5,588
Equity-based compensation expense
2,556
2,345
Restructuring-related charges including severance
—
279
ERP implementation consulting expenses
174
—
Legal reserve, settlements and recoveries
—
6,228
Litigation-related legal expenses
1,779
2,975
Acquisition-related expenses
186
—
Warranty reserve
191
—
Adjusted EBITDA
$
37,901
$
30,739
Sales
$
230,619
$
205,936
Adjusted EBITDA margin %
16.4
%
14.9
%
Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by sales. Adjusted EBITDA and Adjusted EBITDA Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted EBITDA and Adjusted EBITDA Margin as used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA Margin, are important for investors and other readers of the Company’s financial statements.
ASTRONICS CORPORATION
RECONCILIATION OF OPERATING INCOME TO ADJUSTED OPERATING INCOME
(Unaudited, $ in thousands)
Consolidated
Three Months Ended
4/4/2026
3/29/2025
Income from operations
$
27,230
$
13,137
Add back:
Restructuring-related charges including severance
—
279
ERP implementation consulting expenses
174
—
Legal reserve, settlements and recoveries
—
6,228
Litigation-related legal expenses
1,779
2,975
Acquisition-related expenses
186
—
Warranty reserve
191
—
Adjusted operating income
$
29,560
$
22,619
Sales
$
230,619
$
205,936
Operating margin
11.8
%
6.4
%
Adjusted operating margin
12.8
%
11.0
%
Adjusted Operating Income is defined as income from operations as reported, adjusted for certain items. Adjusted Operating Margin is defined as Adjusted Operating Income divided by sales. Adjusted Operating Income and Adjusted Operating Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Operating Income and Adjusted Operating Margin as used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as Adjusted Operating Income and Adjusted Operating Margin, are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current periods’ income from operations to the historical periods’ income from operations and operating margin, as well as facilitates a more meaningful comparison of the Company’s income from operations and operating margin to that of other companies.
ASTRONICS CORPORATION
RECONCILIATION OF NET INCOME AND DILUTED EARNINGS PER SHARE
TO ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE
(Unaudited, $ in thousands except per share amounts)
Consolidated
Three Months Ended
4/4/2026
3/29/2025
Net income
$
25,540
$
9,528
Add back (deduct):
Amortization of intangibles
2,887
2,975
Restructuring-related charges including severance
—
279
ERP implementation consulting expenses
174
—
Legal reserve, settlements and recoveries
—
6,228
Litigation-related legal expenses
1,779
2,975
Acquisition-related expenses
186
—
Warranty reserve
191
—
Normalize tax rate6
(8,256
)
(5,012
)
Adjusted net income
$
22,501
$
16,973
Weighted average diluted shares outstanding (in thousands)
38,223
42,957
Diluted earnings per share
$
0.67
$
0.26
Adjusted diluted earnings per share7
$
0.59
$
0.44
Adjusted Net Income and Adjusted Diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items, including amortization of intangibles, and also adjusted for a normalized tax rate. Adjusted Net Income and Adjusted Diluted EPS are not measures determined in accordance with GAAP and may not be comparable with the measures used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as Adjusted Net Income and Adjusted Diluted EPS, are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current periods’ net income and diluted EPS to the historical periods’ net income and diluted EPS, as well as facilitates a more meaningful comparison of the Company’s net income and diluted EPS to that of other companies. The Company believes that presenting Adjusted Diluted EPS provides a better understanding of its earnings power inclusive of adjusting for the non-cash amortization of intangible assets, reflecting the Company’s strategy to grow through acquisitions as well as organically.
ASTRONICS CORPORATION
RECONCILIATION OF SEGMENT OPERATING PROFIT (LOSS)
TO ADJUSTED SEGMENT OPERATING PROFIT (LOSS)
(Unaudited, $ in thousands)
Three Months Ended
4/4/2026
3/29/2025
Aerospace operating profit
$
35,332
$
22,264
Restructuring-related charges including severance
—
279
ERP implementation consulting expenses
174
—
Legal reserve, settlements and recoveries
—
6,228
Litigation-related legal expenses
1,511
2,244
Warranty reserve
191
—
Adjusted Aerospace operating profit
$
37,208
$
31,015
Aerospace sales
$
213,820
$
191,375
Aerospace margin
16.5
%
11.6
%
Adjusted Aerospace margin
17.4
%
16.2
%
Test Systems operating profit (loss)
$
403
$
(2,223
)
Litigation-related legal expenses
48
731
Adjusted Test Systems operating profit (loss)
$
451
$
(1,492
)
Test Systems sales
$
16,799
$
14,561
Test Systems margin
2.4
%
(15.3
)%
Adjusted Test Systems margin
2.7
%
(10.2
)%
Adjusted Segment Operating Profit is defined as segment operating profit as reported, adjusted for certain items. Adjusted Segment Margin is defined as Adjusted Segment Operating Profit divided by segment sales. Adjusted Segment Operating Profit and Adjusted Segment Margin are not measures determined in accordance with GAAP and may not be comparable with Adjusted Segment Operating Profit and Adjusted Segment Margin as used by other companies. Nevertheless, the Company believes that providing non-GAAP financial measures, such as Adjusted Segment Operating Profit and Adjusted Segment Margin, are important for investors and other readers of the Company’s financial statements and assists in understanding the comparison of the current periods’ segment operating profit to the historical periods’ segment operating profit and segment margin, as well as facilitates a more meaningful comparison of the Company’s segment operating profit and segment margin to that of other companies.
Supplemental Prior Period Tables
The following tables provide a prior-year recast of the disaggregation of sales by product line by quarter for the years ending December 31, 2025 and 2024, to conform with the updated, current-period presentation.
SALES BY PRODUCT LINE8
(Unaudited, $ in thousands)
Recast
Three Months Ended
Year Ended
2025 YTD
3/29/2025
6/28/2025
9/27/2025
12/31/2025
12/31/2025
% of Sales
Aerospace Segment
Inflight Entertainment & Connectivity
$
103,110
$
105,902
$
105,780
$
119,447
$
434,239
50.4
%
Lighting & Safety
51,957
56,100
52,807
55,719
216,583
25.1
%
Flight Critical Electrical Power
21,314
15,832
16,747
19,813
73,706
8.5
%
Seat Motion
6,672
10,217
11,721
18,632
47,242
5.5
%
Other
8,322
5,575
5,670
5,982
25,549
3.0
%
Aerospace Total
191,375
193,626
192,725
219,593
797,319
92.5
%
—
Test Systems
14,561
11,052
18,722
20,474
64,809
7.5
%
—
Total
$
205,936
$
204,678
$
211,447
$
240,067
$
862,128
100.0
%
Recast
Three Months Ended
Year Ended
2024 YTD
3/30/2024
6/29/2024
9/28/2024
12/31/2024
12/31/2024
% of Sales
Aerospace Segment
Inflight Entertainment & Connectivity
$
89,620
$
94,065
$
94,838
$
105,156
$
383,679
48.2
%
Lighting & Safety
44,067
48,654
48,874
46,760
188,355
23.7
%
Flight Critical Electrical Power
14,396
19,045
17,871
17,056
68,368
8.6
%
Seat Motion
6,870
7,353
9,416
11,590
35,229
4.4
%
Other
8,685
7,826
6,555
7,987
31,053
3.9
%
Aerospace Total
163,638
176,943
177,554
188,549
706,684
88.8
%
—
Test Systems
21,436
21,171
26,144
19,991
88,742
11.2
%
—
Total
$
185,074
$
198,114
$
203,698
$
208,540
$
795,426
100.0
%
1 Adjusted EBITDA, adjusted EBITDA margin, and adjusted segment operating margin are Non-GAAP financial measures. Please see the reconciliation of GAAP to non-GAAP financial measures in the tables that accompany this release. 2 Adjusted operating income, adjusted operating margin, adjusted segment operating profit, adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted diluted earnings per share (“EPS”) are Non-GAAP financial measures. Please see the reconciliation of GAAP to non-GAAP financial measures in the tables that accompany this release. 3 In addition to incremental shares from stock awards, weighted average diluted shares for the quarter ended April 4, 2026 reflects 0.992 million assumed shares underlying the premium on the 0% convertible bonds, to the extent the average stock price for the quarter ($72.38) exceeded the $54.87 conversion price. Note that because of the capped call, there is no effective dilution to shareholders resulting from the 0% convertible bonds unless and until the share price exceeds $83.41. The diluted EPS calculation for the quarter ended April 4, 2026 excludes the effect of the 5.5% Notes because the effect is anti-dilutive. The diluted EPS calculation for the quarter ended March 29, 2025 reflects 7.208 million assumed shares underlying the 5.5% convertible bonds. 4 Inflight Entertainment & Connectivity (“IFEC”) is a combination of the previous Avionics and Systems Certification product lines, as well as cabin power products which were included in the previous Electrical Power & Motion product line. The remainder of the previous Electrical Power & Motion product line is now split into two discrete product lines, Flight Critical Electrical Power and Seat Motion. Lighting and Safety remains consistent and Structures is now reported within Other Aerospace revenue. 5 Aerospace backlog of approximately $2.4 million and $10.6 million was added in the third and fourth quarters of 2025, respectively, in connection with the acquisitions of Envoy Aerospace and Bühler Motor Aviation. 6 Applies a normalized tax rate of 25% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax. 7 In addition to incremental shares from stock awards, weighted average diluted shares for the quarter ended April 4, 2026 reflects 0.992 million assumed shares underlying the premium on the 0% convertible bonds, to the extent the average stock price for the quarter ($72.38) exceeded the $54.87 conversion price. Note that because of the capped call, there is no effective dilution to shareholders resulting from the 0% convertible bonds unless and until the share price exceeds $83.41. The diluted EPS calculation for the quarter ended April 4, 2026 excludes the effect of the 5.5% Notes because the effect is anti-dilutive. The diluted EPS calculation for the quarter ended March 29, 2025 reflects 7.208 million assumed shares underlying the 5.5% convertible bonds. 8 Inflight Entertainment & Connectivity (“IFEC”) is a combination of the previous Avionics and Systems Certification product lines, as well as cabin power products which were included in the previous Electrical Power & Motion product line. The remainder of the previous Electrical Power & Motion product line is now split into two discrete product lines, Flight Critical Electrical Power and Seat Motion. Lighting and Safety remains consistent and Structures is now reported within Other Aerospace revenue.
Let the Good Times Roll: 2 Stocks Showing No Signs of SlowingAstronics NASDAQ: ATRO raised its full-year 2026 revenue outlook after reporting a stronger first quarter marked by record bookings and backlog, higher margins and broad demand across its aerospace and test systems businesses.
Chairman, President and CEO Peter Gunderman said the company viewed the quarter as “a strong start to the year,” citing revenue at the high end of its guidance range and the second-highest quarterly total in Astronics’ history, behind only the fourth quarter of 2025. Chief Financial Officer Nancy Hedges reported first-quarter sales of $231 million, up 12% from $206 million in the prior-year period. The total included $4.6 million from the BMA acquisition.
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Astronics Corporation: Up 100% YTD in May and Heading HigherThe company increased its 2026 revenue guidance to a range of $970 million to $1 billion, up from its prior outlook of $950 million to $990 million. Gunderman said the midpoint of the new range would represent a 14% increase over 2025 sales, while the high end would represent 16% growth. He said the forecast assumes organic growth.
Bookings and Backlog Reach Records Astronics reported bookings of more than $290 million in the first quarter, producing a book-to-bill ratio of 1.26. Gunderman said the bookings total was an all-time record and was not driven by a single large order.
5 Small-Cap Stocks to Watch for Big Speculative Gains“Rather, it was driven by growing customer demand across our business, demonstrating strong market conditions for our full range of products,” Gunderman said.
Backlog ended the quarter at $734 million, also an all-time record. Hedges said aerospace backlog reached $651.4 million, up from $600.8 million at the end of 2025, while test systems backlog ended the quarter at $83 million.
Gunderman also addressed the conflict involving Iran, saying Astronics had seen “no war-related pushouts, delays, or cancellations” since hostilities began in late February. In response to an analyst question, he said Middle East airlines were being affected in terms of flights and traffic, but the company had not seen a business impact. He added that rising fuel prices could pressure low-cost carriers, though he said those carriers are not typically major customers for Astronics’ in-flight entertainment and connectivity products.
Margins Improve as Earnings Rise Gross profit rose to $75 million, or 32.6% of sales, compared with $61 million, or 29.5% of sales, in the first quarter of 2025. Hedges said the 310-basis-point improvement reflected higher volume, improved productivity and a $2.8 million cumulative catch-up adjustment on the MV-75 program, which added about 120 basis points of margin. Those benefits were partially offset by a $1.7 million increase in tariff expenses.
Income from operations more than doubled to $27.2 million from $13.1 million a year earlier. Adjusted operating income was $29.6 million, with adjusted operating margin of 12.8%, up from 11% in the prior-year period.
Net income was $25.5 million, or $0.67 per diluted share, compared with $9.5 million, or $0.26 per diluted share, in the first quarter of 2025. Adjusted net income rose to $22.5 million from $17 million, and adjusted diluted earnings per share increased to $0.59 from $0.44.
Adjusted EBITDA was $37.9 million, up 23.3% from $30.7 million, while adjusted EBITDA margin expanded to 16.4% from 14.9%.
Aerospace Leads Growth Aerospace segment sales rose 11.7% to $213.8 million. Hedges said commercial transport sales increased 13.7% to $156.4 million, driven by higher demand for seat motion and lighting and safety products, along with continued strength in in-flight entertainment and connectivity, or IFEC. General aviation sales rose 40.7% to $21.4 million, primarily from higher IFEC product sales into the VVIP market. Military aircraft sales were essentially flat at $33.5 million.
Astronics also recast its product line sales into categories aligned with its strategic focus areas. Hedges said IFEC revenue, which includes passenger power and connectivity hardware, was $110.7 million, up 7.4% and representing just over 48% of total sales. Lighting and safety revenue rose 1.6% to $52.8 million. Flight-critical electrical power sales increased 16.2% to $24.8 million.
Seat motion sales were $13.2 million, nearly doubling from $6.7 million in the prior-year quarter, according to Hedges, reflecting strong demand and the contribution from the BMA acquisition. Gunderman later said first-quarter seat motion sales were $20 million under the new product line presentation and that the company expects year-over-year growth in 2026 to be “north of 100%.”
Aerospace operating profit was $35.3 million, or 16.5% of sales, compared with $22.3 million, or 11.6% of sales, a year earlier. Hedges attributed the improvement to higher volume, production efficiencies, the MV-75 profit catch-up and lower litigation-related expense and reserve adjustments connected to a U.K. patent dispute, partially offset by tariffs.
Test Systems Await Army Program Production Test systems sales increased 15.4% to $16.8 million from $14.6 million. Segment operating profit was $400,000, compared with an operating loss in the prior-year quarter.
Management said it expects the U.S. Army Radio Test Program to move into production in the coming weeks. Gunderman said Astronics was the sole-source winner of an IDIQ program valued by the Army at $215 million over an expected five-year performance period. In response to an analyst question, he said a full-year revenue contribution from the program could be $40 million to $50 million, with about $20 million expected in the second half of 2026.
Outlook Points to Record Second Quarter For the second quarter, Astronics expects sales of $245 million to $250 million, which Hedges said would be a new quarterly record for the company. She said revenue is expected to increase further in the second half as the Army Radio Test Program enters production and aerospace programs continue to ramp.
Hedges said the company remains focused on reaching sustainable high-teens adjusted operating margins on a consolidated basis, supported by volume leverage, productivity improvements, lower litigation costs and product mix.
Gunderman said Astronics is benefiting from five major market forces: rising commercial aircraft production rates, demand for onboard connectivity and power, growth in flight-critical electrical power products, momentum in seat motion and an improving outlook for test systems. He said Boeing’s 777X, expected to come online next year, would be “a significant program” for Astronics.
Cash from operations was $10.6 million in the quarter, compared with $20.6 million a year earlier, reflecting higher working capital needs to support revenue growth. Capital expenditures were $11.2 million, up from $2.1 million, as the company invested in capacity, productivity and facility consolidation, including work at a new Seattle facility expected to be completed in the second quarter. Astronics expects full-year 2026 capital expenditures of $40 million to $45 million.
About Astronics NASDAQ: ATROAstronics Corporation NASDAQ: ATRO is a global leader in the design and manufacture of advanced technologies primarily for the aerospace, defense and semiconductor industries. Headquartered in East Aurora, New York, the company was founded in 1968 and has grown through a combination of internal development and strategic acquisitions. Astronics operates multiple business units focused on power conversion, distribution and control; cabin electronics and connectivity; aircraft lighting and safety solutions; and automated test systems.
The company's aerospace products include onboard power generation and management systems, in-flight entertainment and connectivity hardware, LED and fluorescent lighting for aircraft cabins and cockpits, and safety equipment such as escape slide power units.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Astronics Corporation (ATRO - Free Report) came out with quarterly earnings of $0.59 per share, beating the Zacks Consensus Estimate of $0.55 per share. This compares to earnings of $0.44 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +7.27%. A quarter ago, it was expected that this company would post earnings of $0.63 per share when it actually produced earnings of $0.75, delivering a surprise of +19.05%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Astronics, which belongs to the Zacks Aerospace - Defense Equipment industry, posted revenues of $230.62 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 3.51%. This compares to year-ago revenues of $205.94 million. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Astronics shares have added about 39.7% since the beginning of the year versus the S&P 500's gain of 8.3%.
What's Next for Astronics?While Astronics has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Astronics was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.65 on $237.6 million in revenues for the coming quarter and $2.62 on $962 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense Equipment is currently in the bottom 43% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Heico Corporation (HEI - Free Report) , another stock in the same industry, has yet to report results for the quarter ended April 2026. The results are expected to be released on May 27.
This company is expected to post quarterly earnings of $1.33 per share in its upcoming report, which represents a year-over-year change of +18.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Heico Corporation's revenues are expected to be $1.24 billion, up 12.8% from the year-ago quarter.
FORT LAUDERDALE, FLORIDA - MAY 02: Spirit Airlines planes are parked on the tarmac at the Fort Lauderdale-Hollywood International Airport on May 02, 2026 in Fort Lauderdale, Florida. Spirit Aviation Holdings Inc. announced today that it has canceled all upcoming flights and begun a wind-down of Spirit Airlines operations after failing to secure funding from the Trump administration. (Photo by Joe Raedle/Getty Images)
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After Spirit Airlines vanished from the skies, its not-quite-sudden collapse raised questions about why the successful low-cost model, born in the U.S. airline industry, is failing.
Several factors have contributed to the difficulties Spirit Airlines faced. As Reuters reported, the airline’s attorney, Marshall Huebner, told the Southern District of New York Bankruptcy Court that the sudden spike in jet fuel prices, resulting from the closure of the Strait of Hormuz during the conflict in Iran, had left the airline “no remaining way out” of bankruptcy.
U.S. Transportation Secretary Sean Duffy pointed the finger at the previous administration for its failure to approve a merger between JetBlue and Spirit that might have benefited both carriers.
A JetBlue airliner lands past a Spirit Airlines jet on taxi way at Fort Lauderdale Hollywood International Airport on Monday, April 25, 2022, in Florida. Spirit has urged its shareholders to reject a hostile takeover offer from the New York-based carrier over federal antitrust concerns. (Joe Cavaretta/South Florida Sun Sentinel/Tribune News Service via Getty Images)
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“Yet another mess the traveling public has to inherit thanks to the radical policies of Joe Biden and Pete Buttigieg. In blocking the JetBlue/Spirit merger in 2024, they turned their backs on the American consumer and our great aviation workforce,” Duffy said in the USDOT’s announcement of measures taken to support air travelers following Spirit’s wind-down of operations.
The Trump administration had been in discussion on a possible rescue package for Spirit, but those discussions broke down without success.
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The Key Lesson Low-Cost Airlines Should Take Away From Spirit’s FallThere is a lot of blame going around in the aftermath of the airline’s failure. Still, a deeper analysis suggests that another factor behind Spirit’s collapse may require attention from other low-cost airlines that are still flying.
The market has changed since Southwest first started flying for peanuts in the 1970s. America’s major network airlines have consolidated and grown. They’ve also become more sophisticated in their retail operations, borrowing best practices from low-cost competitors to grow ancillary revenue.
However, as a recent analysis by the industry data visualization firm Visual Analytics suggests, aircraft choice might also be putting the profitable low-cost model at risk.
Larger Planes Favor Seat Cost, But Not Trip CostAs Visual Analytics CEO Courtney Miller explains, for years, the ultra-low-cost model has been optimized around packing as many seats as possible onto the largest narrowbody jets available, to drive down one key metric: the operating cost per seat. Lower seat costs allow airlines to offer lower airfares, but these fares are sustainable only if the aircraft are full, with ancillary fees to buffer a razor-thin margin. But the strategy is limited.
Whether an aircraft is flying full or empty, its trip costs are fixed by the aircraft’s operational demands. Flying a larger aircraft costs considerably more than flying a smaller one.
Flying a larger aircraft into markets with limited demand results in low passenger load factors, which translates into losses. Smaller aircraft can serve these same markets at a profit because the same number of passengers yields higher load factors that more than cover the aircraft’s trip costs.
FORT LAUDERDALE, FLORIDA - MAY 02: Spirit Airlines planes are parked on the tarmac at the Fort Lauderdale-Hollywood International Airport on May 02, 2026 in Fort Lauderdale, Florida. Spirit Aviation Holdings Inc. announced today that it has canceled all upcoming flights and begun a wind-down of Spirit Airlines operations after failing to secure funding from the Trump administration. (Photo by Joe Raedle/Getty Images)
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“Airlines that once relied on a low-cost sweet-spot near 100 seats have since grown average aircraft sizes in search of lower seat costs to today’s most popular low-cost capacity – 240 seats. This 240% increase in seat gauge brought the lower seat costs desired, but at an ever-dwindling number of markets for which an aircraft that large could be deployed,” Miller writes in a post dedicated to what he describes as the seat cost vs trip cost paradox facing low-cost carriers, which points to considerably more market potential in developing new routes within the small-aircraft range. “Once consistently profitable, ultra-low-cost airlines are now dealing with market saturation from prior years of growth while being limited to the largest aircraft available to sustain that much-needed growth.”
As Miller notes, the largest narrowbodies have “run out of markets,” leaving airlines with fewer viable routes to deploy them. But there are plenty of opportunities in routes better suited to smaller aircraft.
Low-cost airlines have acquired large aircraft, which are now limiting their market growth as they focus on minimizing per-seat costs. This strategy favors larger aircraft, such as the Airbus A320 family, which Spirit selected for its fleet.
GOODYEAR, ARIZONA - MAY 8: Spirit Airlines planes sit parked at the Phoenix Goodyear Airport on May 8, 2026 in Goodyear Arizona. The budget airline ceased all operations on May 2, 2026. (Photo by Rebecca Noble/Getty Images)
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“Considering $100 in revenues per passenger (fare and ancillary fees included), a small narrowbody will start delivering profit in markets with only 106 passengers. This low break-even load factor is not uncommon, as the A321neo with 240 seats would break even at only 148 passengers at this fare,” Miller explains. “Yet, even as passenger demand increased along certain routes, the small narrowbody would remain more profitable than the large narrowbody until it filled every seat.” What is more, Miller suggests that operating smaller aircraft in larger markets could still prove more profitable than operating large aircraft, at the expense of turning some passengers away.
Instead, Miller sees an opportunity for growth by operating both large and small aircraft. “The small narrowbody is not a replacement for the large narrowbody, but rather a supplement to unlock new growth while allowing the large narrowbody to focus on the most profitable routes,” he writes.
This means that low-cost airlines would need to reconsider another successful pillar of their long-term model: the single-type fleet. There are distinct advantages in single-type operations, such as streamlined maintenance and labor costs. But as the narrowbody aircraft that have formed the backbone of single-type fleets have stretched, the economics are failing.
In short, the biggest planes are the most efficient—until they aren’t.
The Fuel Shock That Broke SpiritThe recent spike in fuel prices accelerated Spirit’s collapse. The airline’s restructuring plan assumed jet fuel prices of about $2.24 per gallon. Instead, prices have surged above $4 per gallon, nearly doubling one of the airline’s highest costs.
A Spirit Airlines Airbus A320 lands at Hollywood Burbank Airport on April 17, 2026. Spirit Airlines has been facing financial troubles, while rising jet fuel due to the war in Iran has amplified their worries. (Photo by Patrick T. Fallon / AFP via Getty Images)
AFP via Getty Images
Fuel has always been a major expense for all airlines. Still, ultra-low-cost carriers are particularly exposed because they rely on high aircraft utilization to offset low fares that stimulate demand. They operate high-density seating configurations that add weight to aircraft, increasing fuel consumption.
But again, fuel consumption is also tied to aircraft size. Even with higher oil prices, airlines will have lower overall fuel spend operating Airbus A220s or Embraer 190s than with larger Airbus and Boeing narrowbody jets.
Spirit Shrunk, But Not In Time And Not EffectivelySpirit’s response to the financial crisis it faced was to shrink its fleet dramatically, to around 76 aircraft. The airline cut unprofitable routes, limiting its potential revenue, and focused on higher-revenue flying.
In doing so, the airline effectively admitted that its previous growth model—built on scale and density—no longer worked.
Spirit Airlines jets sat on the tarmac as the company ceased operations at Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida, on May 2, 2026. US air carriers mobilized Saturday to help passengers and crew members stranded by the overnight shutdown of Spirit Airlines, after last-minute talks with creditors and the White House collapsed. The budget airline known for its bright yellow planes succumbed to crushing fuel prices and announced in the early hours of Saturday that "all flights have been canceled, and customer service is no longer available" as it "started winding down its global operations, effective immediately." (Photo by GIORGIO VIERA / AFP via Getty Images)
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Even before the latest fuel spike, Spirit had already reduced flying and burned through significant cash reserves in early 2026.
But shrinking the fleet and network alone was not a viable long-term strategy. Pivoting to smaller aircraft and moving into secondary markets with little competition might have made a difference, but Spirit could not deploy such a strategy in time.
Southwest’s Problem: The Just-Right Plane That Hasn’t ArrivedOther low-cost airlines are facing their own oversized-aircraft challenges.
Southwest Airlines has been waiting on the Boeing 737 MAX 7—a smaller, more flexible aircraft that fits its network strategy for years. Boeing certification delays have forced the airline to operate larger aircraft at higher trip costs, which the lower per-seat costs cannot offset.
RENTON, WA - FEBRUARY 5: The first Boeing 737 MAX 7 aircraft sits on the tarmac outside of the Boeing factory on February 5, 2018 in Renton, Washington. The 737 MAX 7 will have the longest range of the MAX airplane line with a maximum range of 3,850 nautical miles. (Photo by Stephen Brashear/Getty Images)
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Unlike Spirit, Southwest wants smaller planes—but can’t get them. The airline has modified its core operating model, which has worked for decades, introducing assigned seating, premium seating and baggage fees. This has brought Southwest closer to the strategy used by major network carriers, helping it adapt to current market conditions, but at the expense of its core brand differentiator.
Boeing plans to certify the 737 MAX 7 this year, with deliveries beginning next year. Southwest will be keen to deploy them.
Breeze Is Betting Big On Smaller AircraftWhile ultra-low-cost carriers have moved toward larger, high-density aircraft, one carrier is taking the opposite approach.
Breeze Airways, a venture of David Neeleman, founder of JetBlue Airways, serves underserved city pairs, with 57 Airbus A220s and eight Embraer 190s. The airline’s focus has been to employ more flexible aircraft than those favored by other low-cost competitors.
MORRISVILLE, NC - DECEMBER 27: A Breeze Airways plane at the gate at Terminal 1 at Raleigh-Durham International Airport (RDU) on December 27, 2025 in Morrisville, North Carolina. (Photo by Al Drago/Getty Images)
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Neeleman’s original concept for the airline emphasized the very advantage that Miller has highlighted: the ability to profitably connect smaller markets without relying on high passenger volumes. The market advantages are considerable.
“A lot of it is overflying hubs; where we can look at what the [daily passengers each way] PDEWs are and say ‘okay, well there’s 30 people to go between these two cities a day.’ If we lower the fare by half and can get them there twice as fast — which in some cases is even more important — instead of taking 4 hours to get you there, it’ll take an hour and 22 minutes to fly direct… People will go more often, and that’s been proven over and over again,” Neeleman told CrankyFlier in a 2020 interview, adding: “We have 500 routes we’re looking at, and there’s not one that I can think of that has another nonstop competitor on it…we’re very confident there’s a lot of opportunities.”
San Bernardino, CA - February 16: A Breeze Airways plane taxies to its gate at the San Bernardino International Airport, having successfully completed its inaugural flight from Las Vegas to San Bernardino on Thursday, Feb. 16, 2023.
MediaNews Group via Getty Images
One opportunity Breeze snapped up quickly, following Spirit’s failure, was to sweep into Atlantic City, where Spirit had been the predominant carrier, adding four new routes.
Flying smaller aircraft may not address all the challenges facing established low-cost carriers, but it does open up new opportunities for competition. Spirit’s exit may provide some relief for the remaining U.S. airlines, which can now more comfortably increase fares in key markets. But Breeze seems best positioned to capitalize on markets that still lack adequate air service, offering U.S. flyers a refreshing alternative to hub connections—on less-crowded planes.
For those looking to find strong Aerospace stocks, it is prudent to search for companies in the group that are outperforming their peers. Astronics Corporation (ATRO - Free Report) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Aerospace peers, we might be able to answer that question.
Astronics Corporation is one of 67 individual stocks in the Aerospace sector. Collectively, these companies sit at #5 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Astronics Corporation is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for ATRO's full-year earnings has moved 3.8% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
According to our latest data, ATRO has moved about 46.4% on a year-to-date basis. At the same time, Aerospace stocks have lost an average of 3%. This shows that Astronics Corporation is outperforming its peers so far this year.
Another Aerospace stock, which has outperformed the sector so far this year, is Howmet (HWM - Free Report) . The stock has returned 23.5% year-to-date.
The consensus estimate for Howmet's current year EPS has increased 11.4% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
To break things down more, Astronics Corporation belongs to the Aerospace - Defense Equipment industry, a group that includes 37 individual companies and currently sits at #95 in the Zacks Industry Rank. On average, stocks in this group have gained 5.9% this year, meaning that ATRO is performing better in terms of year-to-date returns.
On the other hand, Howmet belongs to the Aerospace - Defense industry. This 29-stock industry is currently ranked #144. The industry has moved -6.2% year to date.
Astronics Corporation and Howmet could continue their solid performance, so investors interested in Aerospace stocks should continue to pay close attention to these stocks.
Key Takeaways ATRO posted Q1 2026 sales up 12% to $230.6M and EPS up 157.7% to $0.67.AIR added A320 slat repair in Thailand, expanding Airbus component MRO across APAC.AIR acquired Aircraft Reconfig Technologies to bring STC and PMA approvals in-house. Growing aircraft deliveries worldwide, expanding airline fleet and rising demand for maintenance, repair and overhaul (MRO) services continue to support growth in the aviation services space. A steady rebound in global air travel, coupled with ongoing defense modernization efforts, has further increased investor interest in aerospace companies such as Astronics Corporation (ATRO - Free Report) and AAR Corp. (AIR - Free Report) .
Astronics focuses on advanced aircraft electrical power systems, in-flight connectivity, lighting technologies and other solutions that enhance passenger experience and support cockpit upgrades across both commercial and military aircraft. Meanwhile, AAR operates as a broad aviation services provider, delivering aftermarket support, component repair, parts distribution and integrated solutions to commercial airlines, government agencies and defense customers globally.
As the industry benefits from technological advancements, increasing emphasis on operational efficiency and gradually improving supply-chain conditions, aerospace support companies are drawing greater investor attention. In this environment, ATRO and AIR stand out as notable players, prompting investors to ask: which stock currently presents the stronger investment opportunity?
Tailwinds for ATROAstronics continues to benefit from favorable trends across the commercial aerospace and defense markets, supported by increasing airline demand for improved onboard passenger experience and next-generation cabin technologies. With travelers relying more heavily on personal electronic devices during flights, airlines are increasingly investing in advanced in-seat power and connectivity solutions, aligning well with Astronics’ product portfolio.
The company’s strong momentum was evident in its first-quarter 2026 results, released in May 2026. Sales increased 12% year over year to $230.6 million, while earnings per share surged 157.7% to 67 cents, reflecting improving operational performance and healthy demand across its end markets.
Astronics has also continued to strengthen its product lineup through innovation. In April 2026, the company introduced the EmPower 1327-27 Dual USB-Type-C In-Seat Power Outlet, designed to provide faster charging capabilities and meet the increasing power requirements of modern travelers. As passengers become more dependent on smartphones, tablets and laptops during flights, reliable and high-speed charging solutions are becoming an increasingly important offering for airlines.
Further enhancing its onboard power solutions portfolio, Astronics launched the EmPower Qi21 Wireless Charging Module, which enables convenient wireless charging for both passengers and crew. The product reflects the aviation industry’s growing focus on seamless, cable-free cabin environments, which may support broader adoption of Astronics’ technologies over time.
Tailwinds for AIRAAR is benefiting from rising demand for aircraft maintenance, repair and upgrade services as airlines continue to modernize fleet and improve operational efficiency. The company is also expanding its service capabilities to strengthen its position in the aviation aftermarket industry.
In May 2026, AAR expanded its Component MRO offerings by adding A320 slat repair services in the Asia-Pacific region. Through its authorized service center in Chonburi, Thailand, the company broadened its Airbus component repair capabilities, which already include products such as rudders, flaps and sharklets. AAR also enhanced its tooling to support both A320neo and A320ceo aircraft, helping it offer a wider range of repair services to customers.
AAR is also growing through acquisitions. In April 2026, the company completed the acquisition of Aircraft Reconfig Technologies, an engineering company focused on passenger aircraft reconfiguration. This acquisition strengthens AAR’s engineering and certification capabilities and allows it to handle approvals such as supplemental type certificates and Parts Manufacturer Approval internally. As a result, AAR is expected to improve its aircraft cabin design, manufacturing and certification services while reducing dependence on third parties.
How Does the Zacks Consensus Estimate Compare for ATRO & AIR?The Zacks Consensus Estimate for ATRO’s 2026 sales and earnings per share (EPS) implies an improvement of 13.7% and 33.3%, respectively, from the year-ago quarter’s reported figures. ATRO’s 2027 EPS estimates have moved south over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AIR’s fiscal 2026 sales implies a year-over-year improvement of 17.7%, while that for EPS suggests a 27.1% surge. The stock’s fiscal 2026 and 2027 EPS estimates have improved over the past 60 days.
Image Source: Zacks Investment Research
Stock Price Performance: ATRO vs. AIRIn the past year, ATRO has outperformed AIR. While ATRO’s shares surged 166.8%, AIR rose 79.7%.
Image Source: Zacks Investment Research
AAR’s Valuation More Attractive Than AstronicsAstronics is trading at a premium, with its forward 12-month price/earnings of 29.71X being more than AIR’s forward price/earnings of 20.06X.
Image Source: Zacks Investment Research
Debt Performance: AIR & ATROATRO is highly debt-ridden when compared with AIR, as evident from the image below, which reflects its total debt-to-capital ratio. ATRO has a total debt-to-capital ratio of 67.44, while AIR has a total debt-to-capital ratio of 35.09.
Final CallBoth Astronics and AAR are benefiting from positive aerospace industry trends. However, AAR appears to be the better stock at the moment. The company is seeing strong demand for MRO services and is expanding its business through new service offerings and acquisitions. AAR also has stronger sales growth expectations, improving earnings estimates and a more attractive valuation, which support its growth outlook.
Astronics is also performing well, supported by healthy demand across commercial and defense markets and continued product innovation. However, the company carries higher debt and trades at a more expensive valuation compared with AAR. In addition, recent earnings estimate revisions favor AIR. Considering these factors, AAR looks like the stronger investment option between the two right now.
At present, AAR carries a Zacks Rank #2 (Buy), while Astronics carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
