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Should You Include Orbital ATK (OA) in Your Portfolio?
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Despite Orbital ATK, Inc. () missing earnings estimates in the fourth quarter of 2016, its earnings estimates for the current quarter have increased from $1.32 per share to $1.34 per share in the last 60 days. This has not yet been reflected in the stock, as is evident from the company’s Zacks Rank #3 (Hold), which indicates expectations of in-line performance in the near term. However, the bullish analyst sentiment indicates that the stock’s growth story is intact and this stock might just be the one flying under the radar.
Orbital ATK continues to win a steady stream of contracts from its wide customer base, thanks to its diverse product offering. In 2016, new business received by the company was around $8.5 billion. Orbital ATK exited 2016 with a backlog of around $14.4 billion (up 10% year over year), out of which, firm backlog was $9.3 billion (up 13%). This backlog provides visibility to nearly 90% of 2017 targeted revenue.
Orbital ATK is involved in more than 100 major development and production programs. The company projects 2017 capital expenditures to be around $225 million. These programs, along with their wide product offerings, assure continuous sources of revenues and inflow of new contracts. The company will invest $350 million in research and development and capital equipment, including about $125 million in support of Orbital ATK 's new growth initiatives that were announced in 2016.
The company realized cost savings of nearly $115 million in 2016. Additionally, it has generated $119 million in incremental revenues in 2016.
On the flip side, Orbital ATK is vulnerable to market risks from changes in foreign currency exchange rates which could negatively impact its profitability. Currency fluctuations may impact product demand and the prices Orbital ATK pays for the materials. As a result, its operating margins may be negatively impacted.
Teledyne Technologies, a Zacks Rank #2 stock, has seen estimates increasing from $1.15 to $1.16 in the last 30 days for the current quarter.
TransDigm Group has seen current-quarter estimates rise from $2.82 to $2.85 in the last 30 days. The stock carries a Zacks Rank #2.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
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Should You Include Orbital ATK (OA) in Your Portfolio?
Despite Orbital ATK, Inc. () missing earnings estimates in the fourth quarter of 2016, its earnings estimates for the current quarter have increased from $1.32 per share to $1.34 per share in the last 60 days. This has not yet been reflected in the stock, as is evident from the company’s Zacks Rank #3 (Hold), which indicates expectations of in-line performance in the near term. However, the bullish analyst sentiment indicates that the stock’s growth story is intact and this stock might just be the one flying under the radar.
Orbital ATK continues to win a steady stream of contracts from its wide customer base, thanks to its diverse product offering. In 2016, new business received by the company was around $8.5 billion. Orbital ATK exited 2016 with a backlog of around $14.4 billion (up 10% year over year), out of which, firm backlog was $9.3 billion (up 13%). This backlog provides visibility to nearly 90% of 2017 targeted revenue.
Orbital ATK is involved in more than 100 major development and production programs. The company projects 2017 capital expenditures to be around $225 million. These programs, along with their wide product offerings, assure continuous sources of revenues and inflow of new contracts. The company will invest $350 million in research and development and capital equipment, including about $125 million in support of Orbital ATK 's new growth initiatives that were announced in 2016.
Orbital ATK, Inc. Price
Orbital ATK, Inc. Price | Orbital ATK, Inc. Quote
The company realized cost savings of nearly $115 million in 2016. Additionally, it has generated $119 million in incremental revenues in 2016.
On the flip side, Orbital ATK is vulnerable to market risks from changes in foreign currency exchange rates which could negatively impact its profitability. Currency fluctuations may impact product demand and the prices Orbital ATK pays for the materials. As a result, its operating margins may be negatively impacted.
Key Picks
A few favorably placed stocks in the Zacks categorized Aerospace - Defense Equipment space are HEICO Corporation (HEI - Free Report) , Teledyne Technologies Incorporated (TDY - Free Report) and TransDigm Group Incorporated (TDG - Free Report) .
HEICO’s estimates for the current quarter have increased from 63 cents to 64 cents in the last 30 days. The stock carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Teledyne Technologies, a Zacks Rank #2 stock, has seen estimates increasing from $1.15 to $1.16 in the last 30 days for the current quarter.
TransDigm Group has seen current-quarter estimates rise from $2.82 to $2.85 in the last 30 days. The stock carries a Zacks Rank #2.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>