Investors are closely examining the performance of two small-cap aerospace companies, Innovative Solutions and Support and Astronics, as they navigate the complexities of the market. In a comparative analysis based on institutional ownership, analyst recommendations, profitability, and risk, Innovative Solutions and Support emerges as the stronger contender.
Analyst Ratings and Price Targets
Analysts are optimistic about Innovative Solutions and Support, currently assigning a consensus price target of $16.25. This figure indicates a potential upside of 45.61%. Conversely, Astronics holds a lower consensus price target of $61.00, with a more modest potential upside of 12.13%. The stronger consensus rating for Innovative Solutions and Support suggests that analysts favor it over Astronics, highlighting its potential for growth.
Financial Performance and Valuation
In terms of financial metrics, Innovative Solutions and Support reports higher earnings than Astronics, while its revenue remains lower. Notably, Astronics currently trades at a lower price-to-earnings (P/E) ratio, making it appear more affordable for investors seeking value. This discrepancy raises important considerations for investors weighing the balance between earnings potential and cost.
Profitability indicators also differentiate the two companies. A comparison of net margins, return on equity, and return on assets reveals that Innovative Solutions and Support holds an edge on several fronts, contributing to its favorable outlook among analysts.
Institutional ownership plays a significant role in the investment landscape. Approximately 28.5% of Innovative Solutions and Support shares are held by institutional investors, compared to 56.7% for Astronics. Furthermore, 4.4% of Innovative Solutions and Support shares are owned by insiders, while Astronics sees a higher insider ownership rate of 9.4%. High institutional ownership often reflects confidence in a company’s long-term growth.
Volatility and Risk Assessment
When examining volatility, Innovative Solutions and Support demonstrates a beta of 0.77, indicating its share price is 23% less volatile than the S&P 500. In contrast, Astronics has a beta of 1.12, suggesting its shares are 12% more volatile than the broader market. This characteristic may appeal to different types of investors, with Innovative Solutions and Support appealing to those seeking stability.
In summary, Innovative Solutions and Support surpasses Astronics in 9 out of 15 evaluated factors, positioning itself as a more favorable investment option.
Company Profiles
Innovative Solutions and Support, Inc., founded in 1988 and headquartered in Exton, Pennsylvania, specializes in designing and manufacturing flight guidance systems, cockpit display systems, and integrated standby units, primarily for commercial and military applications. The company serves a diverse clientele, including commercial air transport carriers, the U.S. Department of Defense, and original equipment manufacturers.
On the other hand, Astronics Corporation, established in 1968 and based in East Aurora, New York, operates in the aerospace, defense, and electronics sectors. It provides lighting and safety systems, electrical power generation systems, and automated test systems for a variety of clients, including airframe manufacturers and government contractors.
As the market continues to evolve, stakeholders will be closely monitoring both companies to assess their future performance and investment viability.
