TAT Technologies (TATT) Stock Forecast & Price Target

TAT Technologies Ltd reported significant growth in new order flow during the first quarter of 2025, reaching $52 million, an 11% increase from the previous quarter, which contributed to a record backlog of $439 million, up from $429 million sequentially. The company’s margin profile is experiencing positive momentum due to increased volume being supported by the capacity installed over the last few years, indicating potential for further growth as additional Auxiliary Power Unit (APU) deals come online. Furthermore, TAT's adjusted EBITDA of $5.7 million reflected a substantial 56% year-over-year increase, surpassing earlier estimates and demonstrating a noteworthy 89% rise in operating income, underscoring the company's strong financial health and operational performance.

TAT Technologies has encountered significant financial challenges, including declining revenue from its major operating segments, particularly in MRO services for aviation components and OEM of heat transfer solutions. The company’s reliance on the United States market for key revenue has heightened exposure to fluctuations in government defense budgets and commercial aerospace demand, which may further pressure financial performance. Additionally, rising costs in manufacturing and operational inefficiencies are straining profit margins, contributing to a negative outlook on the stock.