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Raven's (RAVN) Aerostar Segment Displays Bright Prospects

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On Jun 25, we issued an updated research report on Raven Industries, Inc. (RAVN - Free Report) .

In the last six months, this Zacks Rank #2 (Buy) stock has yielded a return of 13.8% against the industry’s decline of 11%.

Existing Scenario

Raven’s Aerostar segment continues to witness growth across many of its platforms, including stratospheric balloons, radar systems, and aerostats. For instance, in first-quarter fiscal 2019, sales at the segment recorded an increase of 13.5% year over year driven by growth across core product lines. Over the past few quarters, the pipeline of high-quality business opportunities for the division has improved significantly.

Moreover, the company has been successful in building the market for its stratospheric technology. Also, its considerable advancements in balloon duration consistently supported the progress on Google's Project Loon and NASA's mission. Currently, Raven’s pipeline is much stronger and a positive leading indicator for meaningful new sales in fiscal 2019. Also, it remains optimistic about surpassing prior-year quarter’s sales and adjusted operating income in fiscal 2019.

Furthermore, Raven’s commitment toward introduction of new products is encouarging. This, in turn, enables the company to gain traction, particularly through original equipment manufacturer (OEM) channel. Also, over the past few quarters, the company has successfully developed its next-generation rate control technology.

This apart, the company’s investment in additional manufacturing capacity, and research and technology development activities is likely to augment core product lines. In this regard, in applied technology, Raven has increased market share through technological advancements. Additionally, the company has introduced two significant new products — Hawkeye nozzle control system and next-generation rate control system — over the last few years. Of late, these products are getting favorable customer feedback as well as generating strong demand, thus adding to the company’s strength.

Other Key Picks

Some other top-ranked stocks from the same space are Federal Signal Corporation (FSS - Free Report) , Crane Company (CR - Free Report) and United Technologies Corporation (UTX - Free Report) . All the three stocks carry the same bullish rank as Raven. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Federal Signal surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 16.07%.

Crane exceeded the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive earnings surprise of 2.13%.

United Technologies outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 6.82%.

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