The stock comparison between two small-cap aerospace companies, Innovative Solutions and Support (NASDAQ:ISSC) and Astronics (NASDAQ:ATRO), reveals a notable advantage for Innovative Solutions. Analysts have pointed to its stronger growth potential and better return metrics, raising questions about the future trajectory of both firms.
Analyst Ratings and Price Targets
Current ratings from MarketBeat highlight a significant difference in the consensus price targets for the two companies. Analysts project a price target of $16.25 for Innovative Solutions, suggesting a potential upside of 45.61%. In contrast, Astronics has a lower price target of $61.00, with a more modest upside potential of 12.13%. These figures indicate that market analysts favor Innovative Solutions as the more attractive stock option.
Financial Performance and Valuation
When examining financial performance, Innovative Solutions reports higher earnings despite having lower revenue than Astronics. This suggests a more efficient profit generation relative to its size. Astronics, meanwhile, trades at a lower price-to-earnings ratio, which may indicate it is currently a more affordable investment, although this may not fully reflect its long-term growth potential.
Profitability metrics also favor Innovative Solutions, which demonstrates stronger net margins, return on equity, and return on assets compared to Astronics. This robust financial performance could appeal to investors seeking sustainable growth.
Institutional ownership plays a crucial role in evaluating company stability. Approximately 28.5% of Innovative Solutions shares are held by institutional investors, whereas Astronics has a higher institutional ownership at 56.7%. Additionally, insider ownership stands at 4.4% for Innovative Solutions and 9.4% for Astronics. A greater institutional presence often signals confidence in a company’s long-term prospects.
Volatility and Risk Assessment
In terms of risk, Innovative Solutions has a beta of 0.77, indicating that its share price is approximately 23% less volatile than the S&P 500. Astronics, on the other hand, has a beta of 1.12, suggesting its share price is 12% more volatile than the broader market. Investors may prefer the lower volatility of Innovative Solutions, especially in uncertain economic climates.
Company Profiles
Innovative Solutions and Support, based in Exton, Pennsylvania, specializes in designing and manufacturing advanced flight guidance and cockpit display systems. The company serves a diverse range of clients, including commercial air transport operators, military organizations, and original equipment manufacturers. Established in 1988, it has developed a reputation for delivering innovative solutions tailored to the aerospace sector.
In contrast, Astronics Corporation, headquartered in East Aurora, New York, operates in both the aerospace and defense industries. Founded in 1968, Astronics offers a range of products, including lighting systems, electrical power generation systems, and automated test systems for various applications. The company’s extensive portfolio enables it to cater to airframe manufacturers, airlines, and government contractors alike.
In summary, Innovative Solutions and Support surpasses Astronics in nine out of the fifteen factors compared, making it a more favorable option for investors seeking growth and stability in the aerospace sector. As both companies continue to navigate the complexities of the market, the comparative data serves as a valuable tool for potential investors assessing their opportunities.
