We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's How the Test Systems Segment Powers Astronics' Growth Story
Read MoreHide Full Article
Key Takeaways
ATRO's Test Systems unit made up 7.5% of 2025 revenues and ended the year with a $74M backlog.
ATRO generated $35.4M from aerospace and defense and $24.1M from radio test markets in 2025.
ATRO's test systems bring recurring support revenues and gain from rising defense and space tech investments.
Astronics Corporation’s (ATRO - Free Report) Test Systems segment is gradually emerging as an important contributor to the company’s long-term growth, positioning it to benefit from structural expansion in aerospace, defense modernization and advanced electronics testing. In 2025, the segment accounted for 7.5% of total revenues and ended the year with a backlog of $74 million, reflecting a 19.5% year-over-year increase and indicating solid demand visibility.
The Test Systems business focuses on designing, developing, manufacturing, and maintaining automated test systems that support the aerospace and defense as well as mass transit industries. Its solutions are sold to a global customer base that includes original equipment manufacturers (OEMs) and prime government contractors involved in both commercial electronics and military programs.
In 2025, the segment generated $35.4 million in revenues from the aerospace and defense market, $5.3 million from the mass transit market, and $24.1 million from the radio test market. These diversified end markets provide Astronics with exposure to multiple technology-driven sectors. Growing government investments in next-generation defense platforms and space technologies are expected to further strengthen demand for advanced testing capabilities and position Astronics’ test systems to benefit.
The segment also benefits from a recurring revenue profile. Once its test solutions are deployed in a program, customers require ongoing support ensuring predictable revenue streams.
By serving aerospace, defense, and other advanced electronics markets, the Test Systems segment also enhances Astronics’ business diversification. Overall, strong industry tailwinds, technological expertise, and lifecycle service revenues make this segment a key pillar of Astronics’ growth strategy.
What About ATRO’s Peers?
The Unmanned Systems segment of Kratos Defense & Security Solutions (KTOS - Free Report) includes unmanned aerial, ground, and seaborne platforms and generated $0.29 billion in 2025, accounting for 21.7% of total sales. As a primary target drone provider to U.S. forces, Kratos Defense & Security Solutions continues to win contracts, supporting strong organic growth prospects for Kratos Defense & Security Solutions.
Likewise, the Space Systems segment is pivotal to Rocket Lab (RKLB - Free Report) , providing satellite components, spacecraft platforms, and integrated mission services. By expanding Space Systems, Rocket Lab deepens vertical integration, boosts recurring revenues and supports its long-term expansion strategy.
ATRO’s Price Performance
Shares of Astronics have gained 20.5% year to date, outperforming the industry.
Image Source: Zacks Investment Research
ATRO’s Discounted Valuation
The stock is undervalued compared with its industry. It is currently trading at a price-to-sales multiple of 2.46, lower than the industry average of 11.84.
Image Source: Zacks Investment Research
Estimate Movement for ATRO
The Zacks Consensus Estimate for ATRO’s first-quarter 2026 and second-quarter 2026 EPS has moved north in the past 30 days. The consensus estimate for 2026 and 2027 EPS has moved 2.7% and 7.2% north, respectively, in the same time frame.
Image Source: Zacks Investment Research
The consensus estimates for ATRO’s 2026 revenues and EPS indicate year-over-year increases.
View the Zacks #1 Rank List
Image: Bigstock
Here's How the Test Systems Segment Powers Astronics' Growth Story
Key Takeaways
Astronics Corporation’s (ATRO - Free Report) Test Systems segment is gradually emerging as an important contributor to the company’s long-term growth, positioning it to benefit from structural expansion in aerospace, defense modernization and advanced electronics testing. In 2025, the segment accounted for 7.5% of total revenues and ended the year with a backlog of $74 million, reflecting a 19.5% year-over-year increase and indicating solid demand visibility.
The Test Systems business focuses on designing, developing, manufacturing, and maintaining automated test systems that support the aerospace and defense as well as mass transit industries. Its solutions are sold to a global customer base that includes original equipment manufacturers (OEMs) and prime government contractors involved in both commercial electronics and military programs.
In 2025, the segment generated $35.4 million in revenues from the aerospace and defense market, $5.3 million from the mass transit market, and $24.1 million from the radio test market. These diversified end markets provide Astronics with exposure to multiple technology-driven sectors.
Growing government investments in next-generation defense platforms and space technologies are expected to further strengthen demand for advanced testing capabilities and position Astronics’ test systems to benefit.
The segment also benefits from a recurring revenue profile. Once its test solutions are deployed in a program, customers require ongoing support ensuring predictable revenue streams.
By serving aerospace, defense, and other advanced electronics markets, the Test Systems segment also enhances Astronics’ business diversification. Overall, strong industry tailwinds, technological expertise, and lifecycle service revenues make this segment a key pillar of Astronics’ growth strategy.
What About ATRO’s Peers?
The Unmanned Systems segment of Kratos Defense & Security Solutions (KTOS - Free Report) includes unmanned aerial, ground, and seaborne platforms and generated $0.29 billion in 2025, accounting for 21.7% of total sales. As a primary target drone provider to U.S. forces, Kratos Defense & Security Solutions continues to win contracts, supporting strong organic growth prospects for Kratos Defense & Security Solutions.
Likewise, the Space Systems segment is pivotal to Rocket Lab (RKLB - Free Report) , providing satellite components, spacecraft platforms, and integrated mission services. By expanding Space Systems, Rocket Lab deepens vertical integration, boosts recurring revenues and supports its long-term expansion strategy.
ATRO’s Price Performance
Shares of Astronics have gained 20.5% year to date, outperforming the industry.
Image Source: Zacks Investment Research
ATRO’s Discounted Valuation
The stock is undervalued compared with its industry. It is currently trading at a price-to-sales multiple of 2.46, lower than the industry average of 11.84.
Image Source: Zacks Investment Research
Estimate Movement for ATRO
The Zacks Consensus Estimate for ATRO’s first-quarter 2026 and second-quarter 2026 EPS has moved north in the past 30 days. The consensus estimate for 2026 and 2027 EPS has moved 2.7% and 7.2% north, respectively, in the same time frame.
Image Source: Zacks Investment Research
The consensus estimates for ATRO’s 2026 revenues and EPS indicate year-over-year increases.
ATRO stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.