Winners And Losers Of Q1: Cadre (NYSE:CDRE) Vs The Rest Of The Aerospace and Defense Stocks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how aerospace and defense stocks fared in Q1, starting with Cadre (NYSE:CDRE).
Emissions and automation are important in aerospace, so companies that boast advances in these areas can take market share. On the defense side, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression toward Taiwan–have highlighted the need for consistent or even elevated defense spending. As for challenges, demand for aerospace and defense products can ebb and flow with economic cycles and national defense budgets, which are unpredictable and particularly painful for companies with high fixed costs.
The 29 aerospace and defense stocks we track reported a strong Q1; on average, revenues beat analyst consensus estimates by 3.9%. while next quarter's revenue guidance was 1.3% above consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, but aerospace and defense stocks have shown resilience, with share prices up 9.4% on average since the previous earnings results.
Cadre (NYSE:CDRE)
Originally known as Safariland, Cadre (NYSE:CDRE) specializes in the manufacturing and distribution of safety and survivability equipment for first responders.
Cadre reported revenues of $137.9 million, up 23.4% year on year, exceeding analysts' expectations by 7.7%. Overall, it was a very strong quarter for the company with an impressive beat of analysts' Products revenue estimates.
“Building on a year of record net sales and Adjusted EBITDA, we continued to successfully increase net sales and gross margin sequentially and year over year,” said Warren Kanders, CEO and Chairman.
The stock is up 9% since reporting and currently trades at $37.46.
We think Cadre is a good business, but is it a buy today? Read our full report here, it's free.
Best Q1: Moog (NYSE:MOG.A)
Responsible for the flight control actuation system integrated in the B-2 stealth bomber, Moog (NYSE:MOG.A) provides precision motion control solutions used in aerospace and defense applications.
Moog reported revenues of $930.3 million, up 11.2% year on year, outperforming analysts' expectations by 6.5%. It was an incredible quarter for the company, with a decent beat of analysts' revenue estimates.
The market seems happy with the results as the stock is up 20.6% since reporting. It currently trades at $189.76.
Is now the time to buy Moog? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Mercury Systems (NASDAQ:MRCY)
Founded in 1981, Mercury Systems (NASDAQ:MRCY) specializes in providing processing subsystems and components for primarily defense applications.
Mercury Systems reported revenues of $208.3 million, down 21% year on year, falling short of analysts' expectations by 2.9%. It was a weak quarter for the company with a miss of analysts' earnings and organic revenue estimates.
Mercury Systems posted the slowest revenue growth in the group. Interestingly, the stock is up 11.4% since the results and currently trades at $32.41.
Read our full analysis of Mercury Systems's results here.
Woodward (NASDAQ:WWD)
Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ:WWD) designs, services, and manufactures energy control products and optimization solutions.
Woodward reported revenues of $835.3 million, up 16.3% year on year, surpassing analysts' expectations by 3.3%. More broadly, it was a stunning quarter for the company with an impressive beat of analysts' organic revenue estimates and optimistic earnings guidance for the full year.
The stock is up 18.7% since reporting and currently trades at $179.11.
Read our full, actionable report on Woodward here, it's free.
Huntington Ingalls (NYSE:HII)
Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE:HII) develops marine vessels and their mission systems and maintenance services.
Huntington Ingalls reported revenues of $2.81 billion, up 4.9% year on year, in line with analysts' expectations. Overall, it was a solid quarter for the company with a decent beat of analysts' earnings estimates.
The stock is down 7.6% since reporting and currently trades at $255.88.
Read our full, actionable report on Huntington Ingalls here, it's free.
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