TAT Technologies (TATT) Stock Forecast & Price Target

TAT Technologies Ltd has demonstrated robust growth potential, with a record backlog of $439 million in 1Q25, reflecting an 11% sequential increase in new order flow, which reached $52 million. The company's margin profile is positively impacted by increased volume utilization of its installed capacity, further enhanced by the anticipated ramp-up of additional Auxiliary Power Unit (APU) deals, indicating ongoing operational efficiencies. Furthermore, significant year-over-year revenue increases in specific product areas, such as a 39% rise in APU revenues and a remarkable 114% surge in landing gear revenues, underscore TAT's effective focus on expanding its aviation MRO services, positioning the company for sustained growth.

TAT Technologies Ltd reported a modest increase in Heat Exchanger revenues, totaling $17.5 million, which only represents a 6% year-over-year growth, while Trading/Leasing revenues saw a significant decline of 25%, raising concerns about revenue stability. The company's backlog of Long-Term Agreements (LTAs) decreased slightly to $520 million, although it remains 21% higher year-to-date, indicating potential future revenue uncertainty amid macroeconomic headwinds impacting global air traffic. Furthermore, despite a favorable Earnings Per Share (EPS) growth of 40% year-over-year, performance fell short of analysts' expectations, suggesting ongoing challenges in the commercial aero MRO market that could lead to a compression of TAT Technologies's valuation relative to its peers.