Innovative Solutions And Support: Robust 4Q25 Beat and Credible Long-Term Growth Targets Underpin Buy Rating

Analyst Bobby Brooks of Northland Securities maintained a Buy rating on Innovative Solutions And Support, retaining the price target of $16.50.

Bobby Brooks has given his Buy rating due to a combination of factors that highlight both strong current performance and compelling long-term prospects for Innovative Solutions And Support. The company delivered a substantial top-line and profitability surprise in 4Q25, with revenue and adjusted EBITDA significantly exceeding both consensus expectations and Brooks’s own above-street forecasts. Margin performance was particularly notable, as overall gross margins expanded sharply year over year, driven by an advantageous mix from higher-margin military programs and much stronger-than-modeled profitability in both product and service lines. While free cash flow was slightly below his estimate, this shortfall appears tied primarily to working-capital movements rather than structural issues.

In addition to the quarterly outperformance, Brooks places considerable weight on management’s newly articulated long-term targets, which call for meaningful revenue expansion to $250 million by FY29 coupled with robust 25–30% adjusted EBITDA margins. He views these objectives as credible and believes they will help strengthen investor conviction in the company’s growth trajectory and earnings power. Furthermore, backlog, though lower year over year, showed its first sequential increase in several quarters, signaling improving demand momentum. Taken together—outsized earnings beats, margin strength, visible growth drivers, and supportive long-term guidance—these elements underpin Brooks’s decision to recommend ISSC shares with a Buy rating.

Brooks covers the Industrials sector, focusing on stocks such as Graham, Tetra Technologies, and Ceco Environmental. According to TipRanks, Brooks has an average return of 38.7% and a 70.16% success rate on recommended stocks.