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Heico Corp. (HEI)
NYSE:HEI

HEICO (HEI) AI Stock Analysis

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HE

HEICO

(NYSE:HEI)

Rating:80Outperform
Price Target:
$345.00
▲(13.59%Upside)
HEICO's strong financial performance and positive earnings call results are the primary strengths, supported by solid technical analysis. However, the high valuation presents a risk, potentially limiting upside potential.
Positive Factors
Earnings
HEICO's EPS of $1.12 exceeded expectations, driven by strong revenue and operating performance at Flight Support Group.
Financial Performance
The Flight Support segment generated $767.1mn in revenue vs. consensus of $732mn.
Growth Potential
There is potential for further customer penetration within FSG as the business continues to grow its PMA portfolio and find synergies from its prior acquisition of Wencor.
Negative Factors
Market Share
There is a long runway for growth, as its PMA revenue represents only about 2% share of the overall aftermarket components market.
Valuation
Reiterate Equal-weight rating as growth and current valuation are balanced.

HEICO (HEI) vs. SPDR S&P 500 ETF (SPY)

HEICO Business Overview & Revenue Model

Company DescriptionHEICO Corporation, through its subsidiaries, designs, manufactures, and sells aerospace, defense, and electronic related products and services in the United States and internationally. The company's Flight Support Group segment provides jet engine and aircraft component replacement parts; thermal insulation blankets and parts; renewable/reusable insulation systems; and specialty components. This segment also distributes hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical components for the commercial, regional, and general aviation markets; and offers repair and overhaul services for jet engine and aircraft component parts, avionics, instruments, composites, and flight surfaces of commercial aircraft, as well as for avionics and navigation systems, subcomponents, and other instruments utilized on military aircraft. Its Electronic Technologies Group segment provides electro-optical infrared simulation and test equipment; electro-optical laser products; electro-optical, microwave, and other power equipment; electromagnetic and RFI shielding and suppression filters; high-speed interface products; high voltage interconnection devices; high voltage advanced power electronics; power conversion products; and underwater locator beacons and emergency locator transmission beacons. This segment also offers traveling wave tube amplifiers and microwave power modules; three-dimensional microelectronic and stacked memory products; harsh environment connectivity products and custom molded cable assemblies; radio frequency and microwave amplifiers, transmitters, and receivers; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems; and nuclear radiation detectors. The company serves customers primarily in the aviation, defense, space, medical, telecommunications, and electronics industries. HEICO Corporation was incorporated in 1957 and is headquartered in Hollywood, Florida.
How the Company Makes MoneyHEICO makes money through its two main business segments. The Flight Support Group generates revenue by providing aftermarket parts and repair services for commercial and military aircraft, which include FAA-approved parts and repair agreements with airlines and defense departments. The Electronic Technologies Group contributes to revenue by designing and manufacturing technologically advanced electronic components and systems used in various high-reliability applications. HEICO also benefits from strategic partnerships and long-term agreements with major aerospace and defense companies, which help secure consistent revenue streams and market position.

HEICO Earnings Call Summary

Earnings Call Date:May 29, 2025
(Q2-2025)
|
% Change Since: 1.18%|
Next Earnings Date:Sep 01, 2025
Earnings Call Sentiment Positive
The earnings call for HEICO Corporation's second quarter of fiscal 2025 highlighted strong financial performance with record operating income and net sales, driven by organic growth and successful acquisitions. The Flight Support Group and Electronic Technologies Group both reported significant growth, contributing to a substantial increase in net income and cash flow. Despite challenges in the medical product segment and a slight decrease in the Electronic Technologies Group's operating margin, the overall sentiment is positive due to the robust growth and strategic acquisitions.
Q2-2025 Updates
Positive Updates
Record Operating Income and Net Sales
HEICO reported record consolidated operating income and net sales for the second quarter of fiscal 2025, with a 19% increase in operating income and a 15% increase in net sales compared to the second quarter of fiscal 2024.
Flight Support Group Performance
The Flight Support Group set all-time quarterly operating income and net sales records, with a 24% increase in operating income and a 19% increase in net sales, driven by 14% organic growth and successful acquisitions.
Electronic Technologies Group Growth
The Electronic Technologies Group saw a 7% increase in net sales, with 4% organic growth, primarily due to increased demand for space, aerospace, and electronics products.
Significant Increase in Net Income
Consolidated net income increased by 27% to $156.8 million, or $1.12 per diluted share, from $123.1 million, or $0.88 per diluted share, in the prior year period.
Strong Cash Flow and EBITDA
Cash flow from operating activities increased 45% to $204.7 million, and consolidated EBITDA increased 18% to $297.7 million, reflecting strong operational performance.
Successful Acquisition of Rosen Aviation LLC
HEICO's Electronic Technologies Group acquired Rosen Aviation LLC, expected to be accretive to earnings within the first year, showcasing HEICO's strategic acquisition strategy.
Negative Updates
Decreased Demand for Medical Products
The Electronic Technologies Group experienced decreased demand for medical products, impacting the overall growth in that segment.
Lower Operating Margin in Electronic Technologies Group
The operating margin for the Electronic Technologies Group decreased from 23.6% to 22.8%, primarily due to a lower gross profit margin from decreased defense and medical products net sales.
Company Guidance
During the HEICO Corporation Second Quarter 2025 Financial Results Call, guidance was provided that highlighted record results and strong performance across its segments. Consolidated operating income and net sales increased by 19% and 15%, respectively, compared to the same period last year, with consolidated net income rising 27% to $156.8 million, or $1.12 per diluted share. The Flight Support Group set all-time records with operating income and net sales up 24% and 19%, respectively, driven by 14% organic growth and strategic acquisitions. The Electronic Technologies Group also showed strength with 7% net sales growth and 4% organic growth, particularly in space and aerospace products. Cash flow from operating activities surged 45% to $204.7 million, and consolidated EBITDA increased by 18% to $297.7 million. The company completed its fourth acquisition of the fiscal year, acquiring Rosen Aviation LLC, which is expected to be accretive to earnings within the first year. Looking forward, HEICO remains confident in achieving continued net sales growth through strong organic demand and strategic acquisitions, maintaining a disciplined financial strategy aimed at maximizing long-term shareholder value.

HEICO Financial Statement Overview

Summary
HEICO exhibits exemplary financial health with consistent revenue growth, strong profitability margins, a debt-free balance sheet, and efficient cash flow generation. This positions it well for continued success in the Aerospace & Defense industry.
Income Statement
90
Very Positive
HEICO demonstrates strong financial performance with a consistently high gross profit margin of 55.42% and a solid net profit margin of 14.21% in the TTM (Trailing-Twelve-Months). The revenue growth rate is impressive at 3.47% from the previous year, indicating steady expansion. EBIT and EBITDA margins are robust at 21.81% and 24.02% respectively, showcasing the company's operational efficiency and profitability.
Balance Sheet
85
Very Positive
HEICO's balance sheet is strong, with a debt-to-equity ratio of 0.00, reflecting no outstanding debt and a healthy equity position. The return on equity (ROE) is commendable at 13.40%, indicating effective management in generating returns from equity. The equity ratio stands at 53.67%, highlighting a stable capital structure with more than half of the assets funded by equity.
Cash Flow
88
Very Positive
HEICO's cash flow is robust with an operating cash flow to net income ratio of 1.35, suggesting strong cash generation relative to net income. The free cash flow growth rate is 14.23%, indicating effective capital management and positive cash flow trajectory. Additionally, the free cash flow to net income ratio of 1.24 underscores efficient conversion of earnings to cash.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.99B3.86B2.97B2.21B1.87B1.79B
Gross Profit
1.59B1.50B1.15B862.76M727.42M682.13M
EBIT
870.87M824.46M625.34M496.84M392.90M376.65M
EBITDA
1.01B1.00B756.77M592.71M486.24M465.71M
Net Income Common Stockholders
567.37M514.11M403.60M351.68M304.22M313.98M
Balance SheetCash, Cash Equivalents and Short-Term Investments
165.47M162.10M171.05M139.50M108.30M406.85M
Total Assets
7.89B7.59B7.20B4.10B3.50B3.55B
Total Debt
2.35B2.25B2.50B290.27M236.50M739.83M
Net Debt
2.19B2.09B2.33B150.77M128.20M332.98M
Total Liabilities
3.66B3.90B3.64B1.12B1.20B1.54B
Stockholders Equity
3.75B3.64B3.15B2.65B2.30B2.01B
Cash FlowFree Cash Flow
701.53M614.11M399.30M435.87M407.90M386.19M
Operating Cash Flow
763.75M672.37M448.74M467.86M444.08M409.13M
Investing Cash Flow
-511.01M-293.20M-2.48B-395.83M-183.45M-199.04M
Financing Cash Flow
-281.00M-389.39M2.07B-33.83M-558.97M137.74M

HEICO Technical Analysis

Technical Analysis Sentiment
Positive
Last Price303.72
Price Trends
50DMA
266.17
Positive
100DMA
255.46
Positive
200DMA
255.60
Positive
Market Momentum
MACD
11.26
Negative
RSI
74.19
Negative
STOCH
95.02
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 303.72 is above the 20-day moving average (MA) of 284.93, above the 50-day MA of 266.17, and above the 200-day MA of 255.60, indicating a bullish trend. The MACD of 11.26 indicates Negative momentum. The RSI at 74.19 is Negative, neither overbought nor oversold. The STOCH value of 95.02 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 23 risk factors in its most recent earnings report. HEICO reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Changes in Internal Control Over Financial Reporting Q4, 2024
2.
Item 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Q4, 2024
3.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET Q4, 2024

HEICO Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
HEHEI
80
Outperform
$36.64B70.9116.34%0.07%17.74%34.81%
LHLHX
76
Outperform
$45.67B28.958.49%1.92%5.39%36.86%
CWCW
74
Outperform
$17.06B40.2517.40%0.18%9.77%15.66%
TXTXT
74
Outperform
$13.64B17.1111.70%0.10%0.57%-5.62%
72
Outperform
$5.86B28.7911.61%0.61%4.50%9.90%
WWWWD
72
Outperform
$13.96B37.9016.35%0.45%4.96%8.41%
66
Neutral
$4.50B12.295.40%248.66%4.13%-12.33%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HEI
HEICO
303.72
80.20
35.88%
CW
Curtiss-Wright
460.06
191.93
71.58%
LHX
L3Harris Technologies
245.41
29.58
13.71%
MOG.A
Moog
185.10
21.95
13.45%
TXT
Textron
77.08
-8.28
-9.70%
WWD
Woodward
234.56
54.52
30.28%

HEICO Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
HEICO Announces Leadership Transition Effective May 2025
Neutral
Apr 22, 2025

On April 18, 2025, HEICO Corporation’s Board of Directors approved leadership transitions, effective May 1, 2025, as part of its long-standing internal succession planning. Laurans A. Mendelson will transition from Chairman and CEO to Executive Chairman, while Eric A. Mendelson and Victor H. Mendelson will become Co-Chief Executive Officers. This change aligns with the company’s strategic direction and reflects the roles the Mendelsons have played over the years. The transition is largely titular, as the Mendelsons have collaboratively managed HEICO since 1990, significantly growing the company from a struggling entity to a major player in the aerospace and defense industry with a market capitalization nearing $30 billion.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.