ATI INC

Aerospace-and-defense specialty materials leader with strong returns and a clean balance sheet.

Strengths

• ROE 22.4% (79th pct) and ROA 7.9% (86th pct); operating margin 14% (78th pct), Adjusted EBITDA up to 18.7% of sales
• A&D now 68% of sales (jet engines/airframes) with qualified-asset moat; near-zero net leverage (D/E 0.017)

Risks

• Gross margin 22% (22nd pct) and revenue growth 5% (44th pct) reflect cyclicality and raw-material/surcharge timing
• Exposure to commercial-aerospace and industrial cycles and critical-raw-material (China) supply risk

Notable findings

• Customer concentration~73% of revenue from one customer/distributor — In aggregate, these markets represent over 73% of our total revenue
• Strong balance sheetStrong balance sheet — $417M cash & investments
• China exposureWe source some of these materials from China, which has imposed, and may in the future continue to impose, export controls that could limit or significantly delay our access to such materials and coul
• Insider sellingInsider selling — 22 open-market sale(s) by 3 insider(s) (cluster of 3 insiders, ~$31M, last 6mo) Form 4 ↗