TAT Technologies
A small aircraft repair company: it overhauls the little jet engines in airliners' tails, their landing gear and their heat exchangers, mostly under licence from Honeywell.
The scores
Growth3/4 ↓
Revenue doubled from 2022 to 2025 without acquisitions, but first-half 2026 growth fell to 10%, near the repair market's 8%.
Business quality3/4 →
Honeywell licences and exclusive APU positions give a real edge, but the licensor controls them, competes, and StandardAero does the same work.
Financial position4/4 →
$43.2M of net cash, a $100M undrawn credit line and positive cash flow; the organic plan needs no outside money.
Execution record3/4 →
Hit the 25% gross and 15% EBITDA targets it set, but missed estimates twice in 2025 and first-half profit was flat.
Per share capture2/4 ↓
Diluted shares rose 12.6% in a year and sales per share fell; acquisitions are to be funded half with new shares.
Potential2/4 →
Repair spending grows near 8%, but most backlog binds nobody and the parts distribution and 331-500 gains are expected, not committed.
Risk profile3/4 →
One licensor and parts supplier, Honeywell, and one customer at 14.5% of revenue: disclosed, long-standing and survivable.
Valuation3/4 ↑
About 15 times trailing adjusted EBITDA needs growth to resume to consensus, the plan roughly as described, and nothing beyond it.
Evidence quality3/4 →
Results, licences and backlog terms are filed and the market data is independent, but platform shares and the margin path are management's.
If it works 0.9× · if it fails you keep about 81%.
The Verdict
We rate TAT Technologies Neutral. The business is solid: it repairs aircraft parts under Honeywell's licences, a real edge, and doubled its sales in three years without buying anyone. But growth slowed to 10% in the first half of 2026 and profit stopped rising as parts ran short. The price is fair: about 15 times last year's cash operating profit asks for growth to come back, not for more. As a bet on its new parts-selling and 737 repair lines it is expensive: if they work they add little to today's price. The view hinges on whether the slowdown was only late parts.
The long caseOld aircraft fly longer and their parts are scarce, so the only authorized seller of a platform's spares can sell more of them.
The evidence under this - 7 claims
The same 20-F names Honeywell as a competitor in APU repair, so the licensor also competes for the work.
StandardAero also overhauls APUs (C18), so authorization is not exclusive on every platform.
Management says the second quarter alone grew 22.8% as parts held up in the first quarter arrived (C05, C06).
The vendor's company value of $388.9M uses December's balance sheet, and its EBITDA gives 16.4 times.
First-half revenue grew 10.4% and operating income not at all (C03), so consensus already assumes a faster second half.
Distribution means holding inventory: inventory rose $9.7M in six months and second-quarter operating cash flow was negative (C28).
The company
Every airliner carries an auxiliary power unit, a small jet engine in the tail that makes electricity and air while the main engines are off. After a few thousand hours it must be taken apart, repaired and tested. TAT does that work in North Carolina, mainly for cargo carriers and airlines flying Boeing 767s, 757s and 777s, and also repairs landing gear and heat exchangers.
The buyer's alternatives are Honeywell's own shops, other licensed repairers such as StandardAero, or an in-house shop with the same licence.
The evidence under this - 5 claims
The same 20-F names Honeywell as a competitor in APU repair, so the licensor also competes for the work.
How it makes money
TAT is paid per repair, mostly under multi-year agreements that set prices for a customer's fleet, and also earns rent from a pool of spare engines and margins on parts it sells. Nearly half its sales come from the engine and landing gear unit, about a quarter from heat exchanger repair and a quarter from heat exchangers it makes in Israel. Customers return because their fleets need the same work every few years.
The evidence under this - 4 claims
Where the money comes from, stream by stream
| Stream | Share of sales (2025) | How it earns it |
|---|---|---|
| APU and landing gear repair, leasing and parts (Piedmont) | 47.9% | Repair under Honeywell licences, lease units and parts trading for airlines, cargo carriers and air forces. |
| Heat exchanger repair (Limco) | 24.0% | Repair of heat exchangers and some manufacture at an FAA repair station. |
| Heat exchangers and accessories made in Israel | 23.0% | Heat exchangers, cooling systems, pumps and valves for aircraft and ground defence makers. |
| Jet engine part coating (Turbochrome) | 5.1% | Overhaul and coating of turbine vanes, blades and other engine parts. |
Who runs it
Igal Zamir has run TAT since 2016 and took sales from about $75M to $178M while reaching the margin targets he set. No director or officer owns more than 1%; Israeli institutions hold about a third. His bonus rides on budget targets for sales, profit and cash, and half his new share awards on how the stock does against peers over three years.
The evidence under this - 4 claims
The new equity vests in full on a change of control, single-trigger.
Why it wins, and who could beat it
Why customers come back
The edge is the licence. US aviation rules require a repair shop to hold the maker's current manuals and tools for the work it does, and Honeywell grants those to only a few shops. TAT pays makers royalties of 5% to 25% for it.
In July 2026 Honeywell extended TAT's licence for its main engine type to 2036 and made it the only authorized seller of that engine's spare parts. The weakness is that the edge is Honeywell's to give, and Honeywell also repairs engines itself.
The evidence under this - 6 claims
The same 20-F names Honeywell as a competitor in APU repair, so the licensor also competes for the work.
StandardAero also overhauls APUs (C18), so authorization is not exclusive on every platform.
The threat
StandardAero, a much larger listed repairer, overhauls the same kind of engines for the same airlines, and AAR runs component repair shops and sells used parts. On the 737 and A320 engine, by far the biggest market, TAT is a newcomer and its chief executive says wins there are one-offs.
The evidence under this - 4 claims
The rivals: SARO, HONA, AIR, AIR, AME, PH, HON, and 2 more that are private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| SARO | StandardAero, a listed independent overhauler of engines and APUsPriced against it: Yes | Piedmont: APU and landing gear repair, APU leasing and parts trading | On sale | Yes |
| HONA | Honeywell Aerospace, the APU maker, with its own repair shops and parts salesPriced against it: One segment only | Piedmont: APU and landing gear repair, APU leasing and parts trading | On sale | One segment only |
| Private | Aerotech International, a private APU and landing gear repairerPriced against it: Private | Piedmont: APU and landing gear repair, APU leasing and parts trading | On sale | Private |
| AIR | AAR, a listed parts distributor and component repairerPriced against it: Yes | Heat exchangers: making them in Israel and repairing them at Limco | On sale | Yes |
| AAR's parts distribution and the used-parts market | New APU lines: Honeywell 331-200/250 parts distribution and 131 repair for the 737 and A320 | On sale | ||
| AME · PH | AMETEK's Drake Air and Hughes-Treitler, and Parker HannifinPriced against it: One segment only | Heat exchangers: making them in Israel and repairing them at Limco | On sale | One segment only |
| Not listed | Liebherr-Aerospace and Lufthansa Technik, private or unlisted makers and repairersPriced against it: Not listed | Heat exchangers: making them in Israel and repairing them at Limco | On sale | Not listed |
| SARO · HONA | StandardAero and Honeywell Aerospace, established 131 APU repairersPriced against it: Yes | New APU lines: Honeywell 331-200/250 parts distribution and 131 repair for the 737 and A320 | On sale | Yes |
| HON | Honeywell InternationalPriced against it: One segment only | - | On sale | One segment only |
How big it could get
How big this could get
Oliver Wyman, an outside consultancy, puts the world's spending on repairing aircraft components at about $24.0B in 2026, rising to $33.3B by 2036. Nobody publishes how much of that is these engines, landing gear or heat exchangers, so the market TAT can reach cannot be measured. TAT's own estimate is that it holds about 45% of the repair work on its main engine type.
The evidence under this - 2 claims
The shares rest on Boeing and Airbus fleet data and TAT's own estimates; no outside source sizes APU repair by model, and Honeywell and StandardAero also repair the 331-200.
Who has signed
Firm orders were only $86M at the end of 2025. The rest of the $615M backlog management cites is long-term agreements under which customers estimate what they will buy but are not obliged to, including a $36M cargo carrier deal signed in March 2026.
The evidence under this - 3 claims
Most of the figure is estimated sales under agreements carrying no obligation to buy (C21).
The results
The numbers
Sales grew 17% in the year to Dec 2025, slower than the 34% in the year before.
Operating margin is 11%, up from −2.1% in the year to Dec 2022.
Running costs take 14¢ of each sales dollar, down from 20¢ in the year to Dec 2021.
Each dollar put into the business earns 11% a year after tax, up from 5.3% in the year to Dec 2023.
It turned 2.3% of sales into free cash, $4.02M over the year.
It holds $51.3M of cash against $11.7M of debt, $39.5M more cash than it owes.
The share count rose 38% in 4.0 years, and pay in shares costs 0.7% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-18. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | |
|---|---|---|---|---|---|
| Size and growth | |||||
| Sales | $78.0M | $84.6M | $114M | $152M | $178M |
| Sales growth | +3.5% | +8.4% | +35% | +34% | +17% |
| Profit | |||||
| Gross margin | 14% | 19% | 20% | 22% | 25% |
| Operating margin | −5.2% | −2.1% | 5.3% | 8.2% | 11% |
| Net margin | −4.6% | −1.8% | 4.1% | 7.3% | 9.4% |
| What growth costs, per sales dollar | |||||
| Research and development | 0.7% | 0.6% | 0.6% | 0.8% | 0.8% |
| Sales and marketing | 6.6% | 6.7% | 4.9% | 5.1% | 4.8% |
| General and admin | 11% | 12% | 9.3% | 7.8% | 8.8% |
| Pay in shares | 0.2% | 0.3% | 0.1% | 0.3% | 0.7% |
| Capital spending | 21% | 19% | 4.5% | 3.4% | 6.2% |
| Cash | |||||
| Cash from operations | −$2.27M | −$4.87M | $2.25M | −$5.82M | $15.0M |
| Free cash flow | −$18.5M | −$21.1M | −$2.85M | −$10.9M | $4.02M |
| Balance sheet | |||||
| Cash and short-term investments | $12.9M | $7.72M | $16.0M | $7.13M | $51.3M |
| Debt | $6.67M | $21.3M | $15.1M | $13.0M | $11.7M |
| Net cash | $6.20M | −$13.6M | $893K | −$5.89M | $39.5M |
| Returns and shares | |||||
| Return on capital | - | - | 5.3% | 11% | 11% |
| Shares (diluted) | 8.87M | 8.91M | 9.08M | 11.2M | 12.3M |
What growth costs
Growth has been cheap: sales doubled while staff grew slowly and margins widened each year, because repair shops fill up rather than expand. The first half of 2026 broke that, as costly parts and new head-office staff for acquisitions ate the extra sales.
The evidence under this - 3 claims
Management says the second quarter alone grew 22.8% as parts held up in the first quarter arrived (C05, C06).
The last report (5 Aug)
The second quarter of 2026 looked strong: sales rose 22.8% to $52.9M and profit before interest, tax and non-cash charges was $7.4M. But part of it was repairs held over from a first quarter starved of parts, and the finance chief asked investors to read the half-year instead.
Over the half, sales grew 10.4% and operating profit was flat. Inventory rose as TAT stocked parts, so cash from operations was negative in the quarter. Net income was flattered by a gain on selling a small stake.
What it did to the thesisIt showed the repair business can grow again once parts arrive, which supports the licence case. It did not settle the weak point: profit was flat over the half and cash flow turned negative, so whether growth and margins resume together is still open.
The quarter in detail
Earnings per share $0.61 against $0.30 expected.
The evidence under this - 4 claims
The release calls the $4.3M gain net of tax while the finance chief described a $0.9M tax charge on it; either way about a third of the quarter's net income is the gain.
Second-quarter revenue of $52.9M was the highest quarter on record and APU revenue rose 22.2% in the half, which reads as more than catch-up (C05, C08).
Management says the second quarter alone grew 22.8% as parts held up in the first quarter arrived (C05, C06).
What management did with the money
TAT has paid for its growth mostly from operations, plus one share sale in May 2025. It plans acquisitions paid half with borrowing and half with new shares, which would dilute existing holders again.
Insiders in 2026Q2: 2 purchases and 4 sales, from their Form 4 filings.
The evidence under this - 3 claims
TAT has not yet made an acquisition under the programme, and the overhead built for it is already in the first half's costs (C03).
The price, and where we disagree
In short. Fair. The price pays for today's repair business plus growth returning to what analysts expect, and little beyond that.
The shares fell 49% from their March high with no bad news since August, while sales per share held steady: the market simply paid less for each dollar of sales.
The test is close. Third-quarter results on 11 November will show whether sales reach the $52.8M analysts expect, or settle back near the first half's pace, and whether cash flow turns positive.
The evidence under this - 4 claims
Second-quarter revenue of $52.9M was the highest quarter on record and APU revenue rose 22.2% in the half, which reads as more than catch-up (C05, C08).
How we read the multiple
A buyer pays about 15 times the last four quarters' profit before interest, tax and non-cash charges, after taking off the net cash. That is more than StandardAero or AAR fetch, though TAT keeps more of each sale.
- The company, net of its cash, is worth about $384M.
- At 12 times profit, near its rivals, that needs about $32M of it by 2028.
- That is about a quarter more than the last four quarters' $25.9M.
- At its usual margin that takes about $213M of sales, below analysts' 2027 forecast.
Against its own history. Buyers pay less for each dollar of its profit than they usually have, but that usual level was set when profits were tiny, so it flatters less than it looks.
The evidence under this - 4 claims
The vendor's company value of $388.9M uses December's balance sheet, and its EBITDA gives 16.4 times.
First-half revenue grew 10.4% and operating income not at all (C03), so consensus already assumes a faster second half.
Priced against its rivals
The competitors its own annual report names, each confirmed against the rival's filing. Measured on company value for each $1 of cash profit, cheapest first:
| Ticker | Company | company value for each $1 of cash profit |
|---|---|---|
| SARO | StandardAero | 11.9× |
| AIR | AAR | 13.5× |
| TATT | TAT Technologies | 16.4× |
The middle of the other 2 is 12.7. TAT Technologies Ltd. is dearest of 3.
Rivals' figures come from a data provider, so read the spread of the group rather than any single pair.
Buyers pay more for each dollar of its profit than for either listed rival's: a premium that is TAT's own, for wider margins rather than faster growth.
Private or foreign rivals that cannot be priced: Liebherr-Aerospace, Lufthansa Technik, Aerotech International, Chromalloy, Boyd Corporation, American Cooler Service.
The bet: what it pays if it works
The bet is TAT's two newest lines: selling Honeywell spare parts for its main engine type as the only authorized distributor, and winning repair work on the engine in 737s and A320s.
If both work as far as the evidence supports, they add only a small slice to the company's value; the price already leans on the rest of TAT.
If they fail, little is lost: the repair business alone, at its rivals' rating, is worth most of today's price.
| New APU lines: Honeywell 331-200/250 parts distribution and 131 repair for the 737 and A320 EBITDA in two to three years | $10M blocks of new-line revenue a year needed | Valued like its peers | Like the cheapest |
|---|---|---|---|
| $500,000 | about 0 at 15% kept | 0.8× | 0.8× |
| $3.00M (the big win) | about 2 at 15% kept | 0.9× | 0.9× |
| $6.00M | about 4 at 15% kept | 1.0× | 1.0× |
To pay 2× (a Fair bet) it would need about $39.44M of New APU lines: Honeywell 331-200/250 parts distribution and 131 repair for the 737 and A320 EBITDA (about 26 $10M blocks of new-line revenue a year at 15% kept); to pay 5× (a Cheap bet), about $137.48M of New APU lines: Honeywell 331-200/250 parts distribution and 131 repair for the 737 and A320 EBITDA (about 92 $10M blocks of new-line revenue a year at 15% kept), at the same multiple.
Each row is New APU lines: Honeywell 331-200/250 parts distribution and 131 repair for the 737 and A320 alone, plus the rest of the company (APU, landing gear and heat exchanger repair and manufacture) counted at about $308.45M.
The steps it has to take
- Done Sole distribution agreement signed and repair licence extended to 2036
- Not started First 131 APU long-term agreement announced due 2027-12
- In progress Inventory bought for distribution due 2026-12
- Not started First distribution sales named in a release or on a call due 2027-03
- Not started Trading and leasing revenue above $25M in a year due 2027-12
The detail behind the label
The evidence under this - 6 claims
The shares rest on Boeing and Airbus fleet data and TAT's own estimates; no outside source sizes APU repair by model, and Honeywell and StandardAero also repair the 331-200.
Distribution means holding inventory: inventory rose $9.7M in six months and second-quarter operating cash flow was negative (C28).
Where we disagree with the market
A fast-growing niche repairer that fell too far on a parts squeeze; every analyst covering it rates it a buy.
The licence is real, but growth halved and profit stalled, and the price already asks for the recovery.
Analysts read the record backlog and the contract wins. The filings show most of that backlog binds nobody, and first-half profit did not grow.
We could be wrong: if the slowdown was only late parts, second-half sales and margins will jump, and at today's price that would leave the shares cheap.
What analysts say, and the evidence
The evidence under this - 5 claims
Management says the second quarter alone grew 22.8% as parts held up in the first quarter arrived (C05, C06).
First-half revenue grew 10.4% and operating income not at all (C03), so consensus already assumes a faster second half.
What could go wrong, and how we would know
The risks
- Honeywell holds the keys. Its licences, parts and data are TAT's edge, and Honeywell also repairs engines; licensing another shop would hit the fastest-growing unit.
- One big customer. A single repair customer was 14.5% of 2025 sales, and five customers a third.
- Parts shortages. Repairs stall when parts are missing; $15.5M of nearly finished work waited in March 2026.
- New shares for deals. Acquisitions are to be paid half in new shares, so each holder would own a smaller slice, after the share count rose by over a third since 2021.
The evidence under this - 6 claims
The same 20-F names Honeywell as a competitor in APU repair, so the licensor also competes for the work.
Landing gear revenue fell in the first half even after parts arrived, so not all of the shortfall was timing (C08).
TAT has not yet made an acquisition under the programme, and the overhead built for it is already in the first half's costs (C03).
What we still do not know
- How much of the repair market for each Honeywell engine TAT really holds, measured by someone other than TAT.
- What the new parts distribution will sell, and at what margin.
- Who the 14.5% customer is, and when its agreement ends.
The evidence under this - 3 claims
The shares rest on Boeing and Airbus fleet data and TAT's own estimates; no outside source sizes APU repair by model, and Honeywell and StandardAero also repair the 331-200.
Distribution means holding inventory: inventory rose $9.7M in six months and second-quarter operating cash flow was negative (C28).
What would change our view
- Neutral→AttractiveA price that pays for today's business
It needs:
- ○The company's value falls to 11 times the last four quarters' profit before interest, tax and non-cash charges.about ≈$24.41 today, 26% below the last close
- Neutral→AttractiveGrowth comes back with the margin
It needs all of:
- ○Sales in the second half of 2026 grow 15% or more on a year earlier.checked at the next results, due by 11 Nov
- ○That profit reaches 16% of sales in a quarter.checked at the next results, due by 11 Nov
- Neutral→UnattractiveThe slowdown is the business
It needs any of:
- ○Half-year sales growth falls below 5%.checked at the next results, due by 11 Nov
- ○Honeywell narrows or ends a repair licence TAT holds.watched as it happens
We would also be wrong if
- The 14.5% customer moves its work elsewhere.
- That profit margin falls below 12% for two quarters running.
What is coming
- 11 November 2026 Q3 2026 results: Whether growth returns above the first half's 10% with margins near 14% and positive operating cash flow, and the first word on parts distribution sales.
Every dated event ahead
- 11 November 2026 Q3 2026 results: Whether growth returns above the first half's 10% with margins near 14% and positive operating cash flow, and the first word on parts distribution sales.
- 31 March 2027 Full-year 2026 results and 20-F: The year's segment split, the backlog's firm and non-binding parts, and the largest customer's share.
Since we wrote this
- 18 OctThesis writtenNeutral, medium convictionA licensed APU repairer with a real edge whose growth stalled on parts, at a price that asks for it to resume.
Sources 23
Sources - 23
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-03-18business, segments, the Honeywell licences, competitors, customers, backlog, royalties, geography, ownership, management and paybacksC01C02C09C11C12C17C20C21C29C39C40C41C47C49
- S02primarycompany filing2026-03-18full-year 2025 revenue, margins, adjusted EBITDA, operating cash flow and year-end backlogbacksC22C27C37C49
- S03primarycompany filing2026-08-05second-quarter and half-year results, the stake sale gain, backlog, cash and inventorybacksC05C22C28C37
- S04primarycompany filing2026-08-05revenue by product line, quarterly adjusted EBITDA and operating income, and TAT's APU platform market estimatesbacksC08C15C34
- S05primarycompany filing2026-08-05segment revenue and operating income for the quarter and half to June 2026backsC03C30
- S06primarycompany filing2026-10-18annual revenue, margins, R&D, cash flow, capital spending and diluted shares (frozen in content/TATT/financials.json)backsC04C29C30C44C48
- S07primarytranscript2026-08-10Second quarter 2026 earnings call transcript (FMP), held 2026-08-10data/cache/transcripts/TATT-2026Q2.jsonthe baseline guidance, the 131 and 331-500 strategy, the distribution deal, inventory, the credit line and acquisition financing
look at the average of the first 6 months of the year rather than thinking that the second quarter is the baseline for the future
backsC06C16C28C42C45 - S08primarytranscript2026-05-20First quarter 2026 earnings call transcript (FMP), held 2026-05-20data/cache/transcripts/TATT-2026Q1.jsonwork orders held up by missing parts and on-time delivery
we ended the quarter with approximately $15.5 million of APU and Landing Gears open work orders at our shops
backsC07 - S09primarycompany filing2026-07-14the sole distribution of 331-200/250 spares, its exclusions, the licence extension to 2036 and the 131-9A purchasebacksC10
- S10primaryregulator2026-10-1814 CFR 145.109, Equipment, materials, and data requirements (eCFR) US Federal Aviation Administration (Electronic Code of Federal Regulations)what a certificated repair station must hold to work on a maker's unit
The equipment, tools, and material must be those recommended by the manufacturer of the article or must be at least equivalent to those recommended by the manufacturer and acceptable to the FAA.
backsC13 - S11primarycompany filing2026-03-01StandardAero Form 10-K for 2025 StandardAero, Inc.its own description as an independent APU and engine overhaulerbacksC18
- S12primarycompany filing2026-07-20its component repair facilities and parts supply businessbacksC19
- S13primarycompany filing2026-01-20the E170/5 landing gear contract's value and termbacksC23
- S14primarycompany filing2026-03-11the two APU contracts' values and termsbacksC23
- S15primarycompany filing2026-06-03the awards' aggregate value and terms and the expected gainbacksC23
- S16primaryindustry data2026-03-01Oliver Wyman, Global Fleet and MRO Market Forecast 2026-2036, executive summary (published by ARSA) Oliver Wyman, published by the Aeronautical Repair Station Associationrepair spending in 2025, 2026 and 2036 by type and region, fleet age, the order backlog and flight hours
Global MRO demand was $136 billion in 2025, an 8% increase from $126 billion in 2024.
backsC24C25 - S17primarytranscript2026-03-19Fourth quarter 2025 earnings call transcript (FMP), held 2026-03-19data/cache/transcripts/TATT-2025Q4.jsonmargin targets and aspiration, parts and teardown constraints, seasonality
You see EBITDA is in the range of 20%, a little bit more. That's where we aspire to be. It's not a forecast
backsC26 - S18secondaryvendor data2026-10-18Research pack frozen beside this thesis, 2026-10-18content/TATT/research-pack.jsonthe 16 October close, the 252-day decomposition, ratings and their history, estimates, earnings history, FINRA short interest, headcount and the filed cohortbacksC30C32C36C37C49C51
- S19secondaryvendor data2026-10-18daily closes around the results and the offeringbacksC31
- S20primarycompany filing2026-06-22every open-market insider sale with the Rule 10b5-1 flagbacksC38
- S21primarycompany filing2026-07-27the chief executive's new pay terms, the peer group and the share purchase planbacksC40
- S22primarycompany filing2026-09-09that every proposal, including the pay terms, was approvedbacksC40
- S23primarycompany filing2026-03-18the growth pillars, the APU licence position, the lease pool and the backlog's methodbacksC52