02. TAT Technologies Ltd. (NASDAQ:TATT)
Upside Potential as of June 23: 39%
TAT Technologies Ltd. (NASDAQ:TATT) is quietly gaining attention as a high potential aerospace and defense stock, with Wall Street assigning a target price of $35.50, suggesting an impressive 39% upside from its current level of $25.60 (as of June 22). With a strong operational footprint in the U.S., Israel, and globally, TAT is a strategic player offering engineering driven solutions across commercial and military aviation, particularly in heat transfer systems, MRO (Maintenance, Repair & Overhaul) services, and APUs (Auxiliary Power Units).
TAT Technologies Ltd. (NASDAQ:TATT) kicked off 2025 with another solid quarter, continuing its streak of double digit growth. Q1 revenue surged 23.6% year over year to $42.1 million, driven by robust demand across core product lines. Even more impressively, gross profit climbed 41% to $10 million, lifting gross margins by 290 basis points to 23.6%. This improvement reflects effective cost control, a better product mix, and sustained operational efficiencies.
The momentum didn’t stop at the top line. Adjusted EBITDA grew 56% to $5.7 million, pushing the EBITDA margin up to 13.6% from 10.8% a year ago. Operating income nearly doubled, rising from $2.2 million to $4.2 million. These results highlight TAT’s ability to expand margins even amid global supply chain disruptions, a testament to the company’s disciplined execution and strategic inventory planning.
TAT Technologies Ltd. (NASDAQ:TATT) backlog now stands at $439 million, offering long term visibility and stability. The company secured $52 million in new orders and long term agreements in Q1 alone. Its heat exchanger business grew 30% year over year to $18.4 million, and APU revenue jumped 34%, underpinned by growing customer adoption across major aircraft platforms like Boeing 737, 777, and Airbus A320.
While management acknowledges near term headwinds from tariffs and macro volatility, the long term picture is undeniably strong. TAT is strategically expanding its MRO capabilities, securing new customers, and solidifying its OEM position. The company’s flexibility across OEM, MRO, and trading makes it uniquely positioned to weather turbulence and continue outpacing the industry.
For investors looking at small cap aerospace stocks with consistent growth, improving margins, and global expansion, TAT Technologies Ltd. (NASDAQ:TATT) looks like a clear winner with significant upside ahead.