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HEICO
(NYSE:HEI)
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Rating:76Outperform
Price Target:
$379.00
â–²(29.99% Upside)
Action:Reiterated
Date:06/18/26
Score is driven primarily by strong financial performance and a very constructive earnings update with solid guidance and cash generation. Technicals also support the setup with a clear uptrend. The main limiter is expensive valuation (high P/E) and monitoring items around margins and leverage dynamics.
Positive Factors
Strong cash generation
HEICO's operating cash flow growth (43% YoY to $292M) and strong free cash flow provide durable internal financing for capex, tuck‑in M&A, dividends, and shareholder returns. Reliable cash conversion supports reinvestment without heavy reliance on external funding, strengthening long-term flexibility.
Negative Factors
Acquisition amortization drag
Frequent M&A has produced sizable intangible amortization (several hundred basis points impact), which persistently depresses GAAP operating margins even if cash economics are strong. Over time continued deal activity can keep reported profitability muted versus cash margins, complicating comparability and investor perception.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
HEICO's operating cash flow growth (43% YoY to $292M) and strong free cash flow provide durable internal financing for capex, tuck‑in M&A, dividends, and shareholder returns. Reliable cash conversion supports reinvestment without heavy reliance on external funding, strengthening long-term flexibility.
Read all positive factors
HEICO (HEI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$42.09B
Dividend Yield0.07%
Average Volume (3M)749.58K
Price to Earnings (P/E)64.0
Beta (1Y)0.90
Revenue Growth18.80%
EPS Growth30.84%
CountryUS
Employees10,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)5.66
Shares Outstanding55,170,956
10 Day Avg. Volume545,830
30 Day Avg. Volume749,580
Financial Highlights & Ratios
PEG Ratio1.88
Price to Book (P/B)10.26
Price to Sales (P/S)9.85
P/FCF Ratio51.30
Enterprise Value/Market Cap1.17
Enterprise Value/Revenue10.05
Enterprise Value/Gross Profit25.09
Enterprise Value/Ebitda36.09
Forecast
1Y Price Target
$390.46Price Target Upside33.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)6.09
Revenue Forecast (FY)$5.29B
HEICO Business Overview & Revenue Model
Company Description
HEICO Corporation operates as a global enterprise through its various subsidiaries, specializing in the design, manufacturing, and distribution of an extensive range of products and services tailored for the aerospace, defense, and electronics ind...
How the Company Makes Money
HEICO makes money primarily by selling high-value, specialized parts and services into regulated, reliability-driven markets, with a significant emphasis on aerospace aftermarket demand and engineered electronic components.
1) Flight Support Grou...
HEICO Earnings Call Summary
Earnings Call Date:May 27, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 31, 2026
Earnings Call Sentiment Positive
The call emphasized multiple record-setting financial metrics (net income +49%, operating income +41%, net sales +25%), robust cash flow (+43%) and strong segment performance (FSG and ETG both delivering record sales and operating income). Management highlighted healthy order flow, record backlogs, ongoing accretive M&A and participation in high‑profile programs (ARTEMIS II). Challenges cited were manageable: supply-chain constraints limiting some component repair growth, acquisition-related intangible amortization compressing GAAP margins, a moderate rise in leverage (net debt/EBITDA 1.74x) and some regional softness in the Middle East. Given the preponderance of operational and financial wins, plus clear commentary around sustainable demand and disciplined capital allocation, the tone is constructive and positive overall.Positive Updates
Record Consolidated Profitability and Revenue Growth
Consolidated net income rose 49% year-over-year to $233.8M ($1.66 per diluted share); consolidated operating income increased 41% and consolidated net sales increased 25% versus Q2 FY25, marking record results for the company.
Negative Updates
Supply Chain Constraints Impacting Component Repair Growth
Component repair organic growth (~10%) was constrained by supplier part shortages and supply-chain delays—management said missing single parts can prevent completion of assemblies and dampened what could have been higher repair growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Consolidated Profitability and Revenue Growth
Consolidated net income rose 49% year-over-year to $233.8M ($1.66 per diluted share); consolidated operating income increased 41% and consolidated net sales increased 25% versus Q2 FY25, marking record results for the company.
Read all positive updates
Company Guidance
HEICO guided to full‑year fiscal 2026 GAAP operating margins of 22%–24% and said it expects increased sales for the remainder of fiscal ’26 in both the Flight Support Group (FSG) and Electronic Technologies Group (ETG); Q2 metrics supporting that outlook included consolidated net sales up 25% YoY, consolidated net income up 49% to $233.8M ($1.66 diluted EPS), cash flow from operations up 43% to $292M, and consolidated EBITDA up 37% to $408.3M, with net debt/EBITDA of 1.74x (vs. 1.6x Oct‑31‑25) after four acquisitions in FY26 (two April deals—Sherwood Avionics 80%, Southwest Antennas 90%—expected to be accretive within a year). Segmentary Q2 detail: FSG net sales $929.4M (+21% YoY), operating income $243.1M (+31%), operating margin 26.2% and EBITA (cash margin before amortization) ~28.6% (vs. 27.0% prior); ETG posted operating income $121.8M (+56%), operating margin 26.5% (30.6% before acquisition‑related amortization) with strong organic growth—management cautioned ETG margins can be volatile but reiterated the 22%–24% FY26 GAAP target and said FSG margins could reasonably sit around 24%–26% going forward.HEICO Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
72
Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.91B | 4.49B | 3.86B | 2.97B | 2.21B | 1.87B |
| Gross Profit | 1.97B | 1.79B | 1.61B | 1.25B | 938.82M | 796.30M |
| EBITDA | 1.37B | 1.22B | 1.00B | 756.77M | 592.71M | 486.24M |
| Net Income | 789.63M | 690.38M | 514.11M | 403.60M | 351.68M | 304.22M |
Balance Sheet | ||||||
| Total Assets | 9.59B | 8.50B | 7.59B | 7.20B | 4.10B | 3.50B |
| Cash, Cash Equivalents and Short-Term Investments | 210.34M | 217.78M | 162.10M | 171.05M | 139.50M | 108.30M |
| Total Debt | 2.59B | 2.19B | 2.25B | 2.50B | 304.93M | 250.37M |
| Total Liabilities | 4.20B | 4.12B | 3.90B | 4.00B | 1.12B | 948.88M |
| Stockholders Equity | 4.77B | 4.31B | 3.64B | 3.15B | 2.61B | 2.26B |
Cash Flow | ||||||
| Free Cash Flow | 925.97M | 861.38M | 614.11M | 399.30M | 435.87M | 407.90M |
| Operating Cash Flow | 997.11M | 934.27M | 672.37M | 448.74M | 467.86M | 444.08M |
| Investing Cash Flow | -1.24B | -731.69M | -293.20M | -2.48B | -395.83M | -183.45M |
| Financing Cash Flow | 211.95M | -150.68M | -389.39M | 2.07B | -33.83M | -558.97M |
HEICO Technical Analysis
Positive
291.57
Price Trends
311.41
Positive
306.89
Positive
314.64
Positive
Market Momentum
11.63
Negative
72.48
Negative
91.83
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HEI, the sentiment is Positive. The current price of 291.57 is below the 20-day moving average (MA) of 338.33, below the 50-day MA of 311.41, and below the 200-day MA of 314.64, indicating a bullish trend. The MACD of 11.63 indicates Negative momentum. The RSI at 72.48 is Negative, neither overbought nor oversold. The STOCH value of 91.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HEI.
HEICO Risk Analysis
HEICO disclosed 20 risk factors in its most recent earnings report. HEICO reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
HEICO Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $42.09B | 63.97 | 17.82% | 0.07% | 18.80% | 30.84% | |
76 Outperform | $28.08B | 55.37 | 19.64% | 0.16% | 12.22% | 21.44% | |
73 Outperform | $15.56B | 16.88 | 12.13% | 0.09% | 9.48% | 18.21% | |
73 Outperform | $24.91B | 48.61 | 20.25% | 0.35% | 19.03% | 34.44% | |
69 Neutral | $56.27B | 32.62 | 8.87% | 1.61% | 5.79% | 9.31% | |
68 Neutral | $17.50B | 50.68 | 27.91% | 0.56% | 21.39% | 19.25% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
HEI
HEICO
362.09
36.81
11.32%
CW
Curtiss-Wright
760.23
269.60
54.95%
LHX
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302.07
49.73
19.71%
TXT
Textron
92.50
11.20
13.78%
WWD
Woodward
418.02
165.52
65.55%
BWXT
BWX Technologies
191.06
47.88
33.44%
HEICO Corporate Events
Business Operations and StrategyPrivate Placements and Financing
HEICO Expands and Extends Revolving Credit Facility Agreement
Positive
Jun 17, 2026
On June 11, 2026, HEICO Corporation amended its revolving credit agreement, increasing the capacity of its existing credit facility from $2.0 billion to $2.2 billion and extending the facility’s maturity to June 11, 2031. The amendment also ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.