ATI (ATI) AI Stock Analysis

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ATI

(NYSE:ATI)

76Outperform

ATI's overall stock score is driven by its robust financial performance and positive earnings call sentiment, which highlight strong revenue growth, improved profitability, and strategic initiatives. However, the technical indicators suggest a potential overbought condition, and the high P/E ratio raises valuation concerns. Despite these factors, the company's strong position in aerospace and defense markets provides a solid foundation for future growth.

Positive Factors

Contract Wins

ATI signed a 5-year, $1B Airbus contract that will double ATI's C26 Airbus sales compared to C25.

Operational Performance

Sales into the jet engine end market grew 17% quarter over quarter and 22% year over year, largely due to greater customer diversification, improving operations and supply chain conditions, and robust aftermarket demand.

Sales Growth

ATI picked up $4 billion in new sales commitments in the nickel alloy sector, highlighting strong growth and a solid foundation for the company.

Negative Factors

Labor Relations

ATI announced that its Specialty Rolled Products employees in Western PA and Lockport, NY, and the United Steelworkers failed to ratify a labor agreement.

Stock Performance

ATI's stock has lagged CRS significantly and recent operating issues may limit upward re-rating potential.

Tariffs Impact

Industrial segments of ATI’s portfolio could face exposure due to tariffs.

ATI (ATI) vs. S&P 500 (SPY)

Market Cap

$10.76B

Dividend YieldN/A

Average Volume (3M)2.26M

Price to Earnings (P/E)27.6

Beta (1Y)1.66

Revenue Growth6.82%

EPS Growth3.49%

CountryUS

Employees7,800

SectorIndustrials

Sector Strength91

IndustryManufacturing - Metal Fabrication

Share Statistics

EPS (TTM)0.72

Shares Outstanding141,067,580

10 Day Avg. Volume2,096,218

30 Day Avg. Volume2,257,416

Financial Highlights & Ratios

PEG Ratio4.25

Price to Book (P/B)4.98

Price to Sales (P/S)0.00

P/FCF Ratio30.30

Enterprise Value/Market Cap1.07

Enterprise Value/Revenue0.58

Enterprise Value/Gross Profit12.28

Enterprise Value/Ebitda4.42

Forecast

1Y Price Target

$74.86

Price Target Upside-1.86% Downside

Rating ConsensusStrong Buy

Number of Analyst Covering7

ATI Business Overview & Revenue Model

Company DescriptionATI Inc. is a global leader specializing in the engineering and manufacturing of high-performance materials and components. The company operates primarily in the aerospace and defense, oil and gas, and medical industries, providing advanced specialty materials and complex components. ATI's core products include titanium and nickel-based alloys, stainless steel, and advanced powder metallurgy, which are essential for high-performance applications.

How the Company Makes MoneyATI Inc. generates revenue through the production and sale of high-performance materials and components. Its key revenue streams include the sale of titanium and nickel-based alloys to aerospace manufacturers for aircraft components, supplying stainless steel and specialty materials to the oil and gas industry, and providing advanced materials for medical device manufacturers. Additionally, ATI partners with leading companies in its target industries to develop customized solutions, enhancing its market position and driving sales growth. The company's revenue is further bolstered by its focus on innovation and quality in its product offerings, ensuring a steady demand from industries requiring durable and reliable materials.

ATI Financial Statement Overview

Summary

ATI demonstrates solid financial health across all verticals. The company is experiencing steady revenue growth with improving profitability margins, maintaining a balanced capital structure with moderate leverage, and showcasing strong cash flow generation. These factors collectively highlight ATI's stable and promising financial position in the manufacturing sector.

Income Statement

Very Positive

ATI has shown a strong increase in revenue over the years, with the latest TTM revenue up by 2.3% compared to the previous year, indicating robust growth. Gross Profit Margin has been stable around 21%, and the Net Profit Margin has improved significantly to 8.9% in TTM, reflecting enhanced profitability. The EBIT and EBITDA Margins have also shown positive trends, highlighting efficient operations.

Balance Sheet

Positive

ATI maintains a healthy balance sheet with a Debt-to-Equity Ratio of approximately 1.01, reflecting moderate leverage. The Return on Equity (ROE) has improved substantially to 21.3% in TTM, indicating effective use of equity to generate profits. The Equity Ratio is stable at around 36%, showing a balanced capital structure.

Cash Flow

Positive

Free Cash Flow has seen a remarkable growth of 97.9% from the previous year, underscoring strong cash generation capabilities. Operating Cash Flow to Net Income Ratio is at 1.27, indicating robust cash flow generation relative to net income. The Free Cash Flow to Net Income Ratio of 0.83 further emphasizes strong cash flow performance.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.46B	4.36B	4.17B	3.84B	2.80B	2.98B
	Gross Profit
936.60M	898.20M	802.60M	714.20M	333.20M	292.80M
	EBIT
636.50M	608.90M	466.40M	287.30M	161.70M	28.50M
	EBITDA
740.30M	608.90M	547.10M	599.30M	260.80M	-1.30B
	Net Income Common Stockholders
398.70M	367.80M	410.80M	130.90M	-16.20M	-1.56B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
394.40M	721.20M	743.90M	584.00M	687.70M	645.90M
	Total Assets
4.78B	5.23B	4.99B	4.45B	4.29B	4.03B
	Total Debt
2.17B	1.90B	2.18B	1.75B	1.84B	1.57B
	Net Debt
1.78B	1.17B	1.44B	1.16B	1.16B	921.90M
	Total Liabilities
3.41B	3.28B	3.50B	3.29B	3.45B	3.39B
	Stockholders Equity
1.26B	1.85B	1.37B	1.05B	685.60M	521.10M
Cash Flow		Free Cash Flow
332.70M	168.10M	-114.80M	94.00M	-136.50M	30.40M
	Operating Cash Flow
506.00M	407.20M	85.90M	224.90M	16.10M	166.90M
	Investing Cash Flow
-146.40M	-159.60M	-193.20M	-126.70M	-77.30M	-128.70M
	Financing Cash Flow
-73.50M	-260.40M	267.20M	-201.90M	103.00M	116.90M

ATI Technical Analysis

Technical Analysis Sentiment

Positive

Last Price76.28

Price Trends

50DMA

55.14

Positive

100DMA

56.63

Positive

200DMA

58.84

Positive

Market Momentum

MACD

6.59

Negative

RSI

84.20

Negative

STOCH

96.56

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATI, the sentiment is Positive. The current price of 76.28 is above the 20-day moving average (MA) of 62.94, above the 50-day MA of 55.14, and above the 200-day MA of 58.84, indicating a bullish trend. The MACD of 6.59 indicates Negative momentum. The RSI at 84.20 is Negative, neither overbought nor oversold. The STOCH value of 96.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ATI.

ATI Risk Analysis

ATI disclosed 29 risk factors in its most recent earnings report. ATI reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

ATI Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRS	80 Outperform	$11.54B	32.86	21.78%	0.34%	7.40%	168.67%
ESAB	77 Outperform	$7.90B	29.25	16.64%	0.24%	-1.85%	16.06%
ATI	76 Outperform	$10.76B	27.60	25.42%	―	6.82%	3.49%
MLI	76 Outperform	$8.78B	14.46	24.51%	1.07%	18.81%	10.05%
AZZ	70 Outperform	$2.77B	51.87	13.01%	0.73%	2.61%	-53.74%
WOR	66 Neutral	$2.98B	49.96	6.56%	1.12%	-69.82%	-78.10%
Sector *	64 Neutral	$4.43B	12.01	5.16%	249.23%	4.03%	-11.73%

* Industrials Sector Average

Performance Comparison

ATI

76.28

15.55

25.61%

AZZ

92.69

12.58

15.70%

CRS

Carpenter Technology

231.88

122.64

112.27%

MLI

Mueller Industries

79.38

21.70

37.62%

WOR

Worthington Industries

59.74

2.44

4.26%

ESAB

ESAB Corporation

130.25

22.43

20.80%

ATI Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 40.27%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call reflected a positive sentiment overall, with strong revenue growth and significant achievements in aerospace and defense markets. However, there is some uncertainty due to trade-related challenges and a slowdown in China's economy. Despite these challenges, the company has strategies in place to mitigate negative impacts.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

Revenues grew 10% year-over-year, exceeding $1.1 billion for the quarter.

Exceeded Financial Guidance

Adjusted EBITDA reached $195 million, surpassing the top end of guidance by $15 million. Adjusted earnings per share came in at $0.72, beating the guidance range of $0.55 to $0.61.

Labor Agreement Ratified

1,000 USW represented employees ratified a six-year labor agreement, bringing long-term labor stability.

Share Buyback Acceleration

Repurchased $70 million worth of shares in Q1 and plans to repurchase as much as $250 million in Q2.

Jet Engine Business Growth

Jet engine sales accounted for 37% of total Q1 revenue and grew 35% year-over-year.

Defense Sales Increase

Defense sales grew 11% year-over-year in the first quarter.

New Airbus Contract

Signed a new five-year agreement with Airbus, approaching $1 billion in sales.

Negative Updates

Industrial Market Uncertainty

Trade-related uncertainty affecting industrial markets, with some customers taking a wait-and-see posture.

Tariff Exposure

Tariffs represent approximately $50 million in annual cost exposure prior to mitigation offsets.

China Economic Slowdown

Lower year-over-year sales expected in areas impacted by China's slowed economy.

Company Guidance

During ATI's first-quarter 2025 earnings call, the company reported strong financial performance and provided guidance for the rest of the year. Revenue increased by 10% year-over-year, reaching approximately $1.14 billion, while adjusted EBITDA was $195 million, surpassing the top end of their guidance by $15 million. Adjusted earnings per share were $0.72, exceeding the guidance range of $0.55 to $0.61. The company maintained its full-year guidance for adjusted EBITDA of $800 million to $840 million and free cash flow of $240 million to $360 million. ATI plans to repurchase up to $250 million in shares in the second quarter, pulling forward its buyback program. The aerospace and defense markets continued to drive growth, with jet engine sales expected to grow between 15% and 20% for the year. Despite the evolving trade and tariff environment, the company anticipates minimal impact on its full-year earnings due to various mitigation strategies.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.