Specialty materials manufacturer ATI (NYSE: ATI) missed Wall Street’s revenue expectations in Q1 CY2026, with sales flat year on year at $1.15 billion. Its non-GAAP profit of $1 per share was 13.5% above analysts’ consensus estimates.
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ATI (ATI) Q1 CY2026 Highlights:
- Revenue: $1.15 billion vs analyst estimates of $1.19 billion (flat year on year, 3% miss)
- Adjusted EPS: $1 vs analyst estimates of $0.88 (13.5% beat)
- Adjusted EBITDA: $231.7 million vs analyst estimates of $226.1 million (20.1% margin, 2.5% beat)
- Operating Margin: 14.2%, up from 12.8% in the same quarter last year
- Free Cash Flow was $73 million, up from -$145.8 million in the same quarter last year
- Market Capitalization: $19.95 billion
Company Overview
With its materials flying in nearly every commercial and military aircraft in service today, ATI (NYSE: ATI) produces highly specialized materials and components for aerospace, defense, medical, and energy applications using advanced metallurgy and manufacturing processes.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, ATI’s 11.1% annualized revenue growth over the last five years was impressive. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. ATI’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 4.9% over the last two years was well below its five-year trend. 
This quarter, ATI’s $1.15 billion of revenue was flat year on year, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 10.4% over the next 12 months, an improvement versus the last two years. This projection is admirable and suggests its newer products and services will fuel better top-line performance.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
ATI has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 11.1%.
Analyzing the trend in its profitability, ATI’s operating margin rose by 8.8 percentage points over the last five years, as its sales growth gave it immense operating leverage.
In Q1, ATI generated an operating margin profit margin of 14.2%, up 1.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
ATI’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
ATI’s EPS grew at an astounding 24.8% compounded annual growth rate over the last two years, higher than its 4.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of ATI’s earnings can give us a better understanding of its performance. ATI’s operating margin has expanded over the last two yearswhile its share count has shrunk 5.1%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
In Q1, ATI reported adjusted EPS of $1, up from $0.72 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects ATI’s full-year EPS of $3.52 to grow 26.6%.
Key Takeaways from ATI’s Q1 Results
It was good to see ATI beat analysts’ EPS expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its revenue missed and its adjusted operating income fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded up 2.9% to $150.44 immediately following the results.
Should you buy the stock or not? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
