We assign a fundamental rating of 6 out of 10 to ATI. ATI was compared to 73 industry peers in the Aerospace & Defense industry. ATI has an excellent profitability rating, but there are some minor concerns on its financial health. ATI has a decent growth rate and is not valued too expensively.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ATI had positive earnings in the past year.
ATI had a positive operating cash flow in the past year.
In multiple years ATI reported negative net income over the last 5 years.
In the past 5 years ATI always reported a positive cash flow from operatings.

1.2 Ratios

ATI's Return On Assets of 8.89% is amongst the best of the industry. ATI outperforms 90.41% of its industry peers.
ATI has a better Return On Equity (26.06%) than 95.89% of its industry peers.
ATI has a better Return On Invested Capital (13.13%) than 90.41% of its industry peers.
ATI had an Average Return On Invested Capital over the past 3 years of 10.03%. This is in line with the industry average of 8.56%.
The last Return On Invested Capital (13.13%) for ATI is above the 3 year average (10.03%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	8.89%
ROE	26.06%
ROIC	13.13%

ROA(3y)6.07%

ROA(5y)-4.33%

ROE(3y)20.77%

ROE(5y)-49.01%

ROIC(3y)10.03%

ROIC(5y)6.93%

1.3 Margins

With a decent Profit Margin value of 9.71%, ATI is doing good in the industry, outperforming 78.08% of the companies in the same industry.
In the last couple of years the Profit Margin of ATI has grown nicely.
With an excellent Operating Margin value of 14.33%, ATI belongs to the best of the industry, outperforming 82.19% of the companies in the same industry.
ATI's Operating Margin has improved in the last couple of years.
ATI's Gross Margin of 21.83% is in line compared to the rest of the industry. ATI outperforms 43.84% of its industry peers.
In the last couple of years the Gross Margin of ATI has grown nicely.

		Industry Rank	Sector Rank
OM	14.33%
PM (TTM)	9.71%
GM	21.83%

OM growth 3Y49.73%

OM growth 5Y7.23%

PM growth 3YN/A

PM growth 5Y6.18%

GM growth 3Y20.05%

GM growth 5Y5.88%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

ATI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, ATI has more shares outstanding
ATI has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ATI has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.88 indicates that ATI is not in any danger for bankruptcy at the moment.
ATI has a Altman-Z score (4.88) which is in line with its industry peers.
The Debt to FCF ratio of ATI is 4.13, which is a neutral value as it means it would take ATI, 4.13 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.13, ATI is in the better half of the industry, outperforming 78.08% of the companies in the same industry.
A Debt/Equity ratio of 1.00 is on the high side and indicates that ATI has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.00, ATI is doing worse than 76.71% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	1
Debt/FCF	4.13
Altman-Z	4.88

ROIC/WACC1.34

WACC9.79%

2.3 Liquidity

A Current Ratio of 2.50 indicates that ATI has no problem at all paying its short term obligations.
ATI has a Current ratio of 2.50. This is comparable to the rest of the industry: ATI outperforms 49.32% of its industry peers.
ATI has a Quick Ratio of 1.18. This is a normal value and indicates that ATI is financially healthy and should not expect problems in meeting its short term obligations.
ATI has a worse Quick ratio (1.18) than 63.01% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.5
Quick Ratio	1.18

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ATI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 33.62%, which is quite impressive.
Measured over the past years, ATI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.34% on average per year.
Looking at the last year, ATI shows a small growth in Revenue. The Revenue has grown by 7.75% in the last year.
The Revenue has been growing slightly by 1.14% on average over the past years.

EPS 1Y (TTM)33.62%

EPS 3Y174.06%

EPS 5Y15.34%

EPS Q2Q%41.67%

Revenue 1Y (TTM)7.75%

Revenue growth 3Y15.93%

Revenue growth 5Y1.14%

Sales Q2Q%7.07%

3.2 Future

ATI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.88% yearly.
Based on estimates for the next years, ATI will show a small growth in Revenue. The Revenue will grow by 7.30% on average per year.

EPS Next Y30.76%

EPS Next 2Y26.67%

EPS Next 3Y23.96%

EPS Next 5Y19.88%

Revenue Next Year7.28%

Revenue Next 2Y7.82%

Revenue Next 3Y7.93%

Revenue Next 5Y7.3%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

ATI is valuated quite expensively with a Price/Earnings ratio of 39.85.
Based on the Price/Earnings ratio, ATI is valued a bit cheaper than 67.12% of the companies in the same industry.
ATI is valuated rather expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 31.17, which means the current valuation is very expensive for ATI.
73.97% of the companies in the same industry are more expensive than ATI, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ATI to the average of the S&P500 Index (24.26), we can say ATI is valued slightly more expensively.

		Industry Rank	Sector Rank
PE	39.85
Fwd PE	31.17

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ATI is valued a bit cheaper than the industry average as 71.23% of the companies are valued more expensively.
84.93% of the companies in the same industry are more expensive than ATI, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	36.39
EV/EBITDA	22.23

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ATI has an outstanding profitability rating, which may justify a higher PE ratio.
ATI's earnings are expected to grow with 23.96% in the coming years. This may justify a more expensive valuation.