Loar Holdings is Monday's pick for IBD 50 Growth Stocks To Watch as the defense company's 2025 profits are expected to climb sharply after its first profitable year in 2024.
The aerospace and defense name is building the right side of a deep cup base as shares continue to climb from a recent low. An initial public offering last year, Loar stock was rising around 1% Monday, adding to last week's 27.2% gain. Shares are on pace for four straight weeks of increases.
Loar designs and makes aerospace parts, including braking, de-icing, electronics and fluid control parts.
It ranks No. 1 out of 71 stocks in the aerospace defense group, which holds the 7th spot out of the 197 industry groups that Investor's Business Daily tracks. The group holds a best-possible A+ Relative Strength Rating from IBD.
The defense industry player was the IPO Stock Of The Week Friday and is on the IBD Leaderboard watchlist and MarketSurge Growth 250.
How To Know It's Time To Sell Your Favorite Stock
Loar Stock Builds A Base
Loar stock started trading April 25, 2024, with an offer price of $28 a share.
Shares are building what would normally be the right side of an early-stage deep cup base with a 96.99 buy point. But look for a handle to form to offer a lower entry.
Note the buy point is only used during strong market environments and IBD continues to recommend 0% to 20% stock market exposure. Loar's status as a relatively recent IPO brings an additional layer of risk.
Shares plunged in early December after Loar announced a public offering of 4.75 million shares of common stock. The base count reset after the stock reversed sharply from the breakout and undercut the low of the prior flat base.
The stock started recovering in earnest after Loar's positive fourth-quarter earnings report on March 31. Shares reclaimed their 10-week moving average last week amid the stock's robust climb.
Its relative strength line has reached a 52-week high as shown by the blue dot on its chart. Shares have climbed 19% so far this year.
Its IBD Accumulation/Distribution Rating of B indicates moderate institutional buying over the last 13 weeks. And its volume has been trending higher in the last three weeks, as big money managers scoop up shares.
Aerospace Leader's Profits Look To Soar
The defense name beat fourth-quarter earnings and sales expectations on March 31, as the company reported a profit of 11 cents-per-share vs. a loss of a penny-per-share one year ago. Management raised its full-year 2025 net sales forecast to a range of $480 million to $488 million, up from a range of $470 million and $480 million, in the earnings release.
Its sales growth has averaged 30% over the last eight quarters. Projections call for an average 23% increase over the next four quarters.
Loar reported a 42 cent-per share profit in 2024 after two years of losses. Analysts' forecasts have been recently raised and show 2025 profit of 74 cents-a-share followed by 96 cents-a-share in 2026.
Loar stock boasts a best-possible 99 IBD Composite Rating and 97 Relative Strength Rating.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
