Innovative Solutions And Support (ISSC) AI Stock Analysis

• Market Cap: $217.41M
• Dividend Yield: N/A
• Average Volume (3M): 255.60K
• Price to Earnings (P/E): 20.1
• Beta (1Y): 1.31
• Revenue Growth: 58.67%
• EPS Growth: 70.38%
• Country: US
• Employees: 133
• Sector: Industrials
• Sector Strength: 84
• Industry: Aerospace & Defense
• EPS (TTM): 0.30
• Shares Outstanding: 17,604,155
• 10 Day Avg. Volume: 237,283
• 30 Day Avg. Volume: 255,598
• PEG Ratio: -0.29
• Price to Book (P/B): 2.19
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 39.13
• Enterprise Value/Market Cap: 0.26
• Enterprise Value/Revenue: 0.27
• Enterprise Value/Gross Profit: 1.74
• Enterprise Value/Ebitda: 1.08
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 81 Outperform
• Price Target: $15.50 ▲(25.61%Upside)

Innovative Solutions And Support receives a strong overall score of 81, driven primarily by excellent financial health and strong technical indicators. The company's impressive revenue growth and strategic military expansion are key positives. While valuation is reasonable, the absence of a dividend yield and the need for improvement in free cash flow are areas to monitor. The positive sentiment from the earnings call further supports the stock's potential.

Innovative Solutions And Support Business Overview & Revenue Model

Company Description

Innovative Solutions and Support, Inc., a systems integrator, designs, develops, manufactures, sells, and services flight guidance, autothrottle, and cockpit display systems in the United States and internationally. It offers flat panel display systems that replicate the display of analog or digital displays on one screen and replace existing displays in legacy aircraft, as well as used for security monitoring on-board aircraft and as tactical workstations on military aircraft; and flight management systems that complement the flat panel display system upgrade for commercial air transport aircraft. The company also provides integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single standby/backup navigation instrument for military, commercial air transport, and corporate/general aviation applications. In addition, it offers digital air data computers that calculate various air data parameters, such as altitude, airspeed, vertical speed, angle of attack, and other information; integrated air data computers and display units, which calculate and convey air data information; altitude displays that convey aircraft altitude measurements; airspeed displays that convey various airspeed measurements; and altitude alerters. Further, the company offers the engine and fuel displays that convey information related to fuel and oil levels, and engine activity, including oil and hydraulic pressure and temperature; integrated global navigation systems; ThrustSense, a full regime autothrottle; and utility management systems. It serves commercial air transport carriers and corporate/general aviation companies, the Department of Defense and its commercial contractors, aircraft operators, aircraft modification centers, government agencies, and foreign militaries, as well as original equipment manufacturers. Innovative Solutions and Support, Inc. was incorporated in 1988 and is based in Exton, Pennsylvania.

How the Company Makes Money

ISSC makes money primarily through the sale of its avionics products and systems to original equipment manufacturers (OEMs), airlines, and military organizations. The company generates revenue by developing custom solutions tailored to the specific needs of its clients and offering comprehensive support and maintenance services. Key revenue streams include product sales, service contracts, and long-term partnerships with leading aerospace and defense companies. The company also benefits from ongoing contracts and collaborations with government agencies and defense contractors, which provide stable and recurring income.

Innovative Solutions And Support Financial Statement Overview

Summary

Innovative Solutions And Support shows strong financial health, with impressive revenue and profit growth, robust profitability margins, and a stable balance sheet. However, increased leverage and limited free cash flow generation are areas to monitor.

Income Statement

Innovative Solutions And Support has demonstrated strong revenue growth, with total revenue increasing by 37.8% in the TTM compared to the prior year. The company maintains a solid gross profit margin of 50.2% and a net profit margin of 16.6% for the TTM, indicating efficient cost management and profitability. EBIT and EBITDA margins are also robust at 22.6% and 26.7%, respectively. These figures suggest a competitive position in the industry with healthy profitability metrics.

Balance Sheet

The balance sheet is solid, with a debt-to-equity ratio of 0.51, indicating moderate leverage. Return on equity (ROE) stands at 20.2% for the TTM, reflecting effective utilization of shareholder funds. The equity ratio of 59.5% signals a strong equity base relative to total assets, contributing to financial stability. However, the increase in total debt over recent periods should be monitored for any potential liquidity risks.

Cash Flow

Cash flow generation is consistent, with an operating cash flow to net income ratio of 0.42 for the TTM, indicating healthy cash conversion. The free cash flow to net income ratio of 0.22 suggests positive but limited free cash flow generation relative to profits. While free cash flow has decreased in the TTM, the company maintains sufficient operational cash flow to support ongoing activities and investments.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
65.06M	47.20M	34.81M	27.74M	23.04M	21.60M
	Gross Profit
32.69M	25.91M	21.31M	16.67M	12.78M	11.80M
	EBIT
14.73M	9.66M	7.77M	7.22M	3.90M	2.75M
	EBITDA
17.34M	11.89M	8.73M	7.71M	4.33M	3.18M
	Net Income Common Stockholders
10.81M	7.00M	6.03M	5.52M	5.06M	3.27M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.23M	538.98K	3.10M	17.25M	8.27M	12.60M
	Total Assets
89.89M	82.38M	62.96M	34.71M	27.09M	41.55M
	Total Debt
27.40M	28.03M	19.51M	28.68K	28.68K	45.13K
	Net Debt
26.18M	27.49M	16.42M	-17.22M	-8.24M	-12.56M
	Total Liabilities
36.37M	35.74M	24.32M	3.96M	2.50M	13.78M
	Stockholders Equity
53.51M	46.64M	38.64M	30.75M	24.59M	27.77M
Cash Flow		Free Cash Flow
2.34M	5.14M	1.80M	5.93M	4.25M	2.07M
	Operating Cash Flow
4.51M	5.80M	2.10M	6.09M	4.59M	2.19M
	Investing Cash Flow
-20.62M	-16.88M	-36.16M	2.59M	-340.68K	-118.80K
	Financing Cash Flow
16.76M	8.53M	19.91M	301.15K	-19.77M	-705.33K

Innovative Solutions And Support Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ISSC, the sentiment is Positive. The current price of 12.34 is above the 20-day moving average (MA) of 11.63, above the 50-day MA of 8.94, and above the 200-day MA of 8.06, indicating a bullish trend. The MACD of 1.02 indicates Positive momentum. The RSI at 66.75 is Neutral, neither overbought nor oversold. The STOCH value of 52.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ISSC.

Innovative Solutions And Support Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ISSC	81 Outperform	$217.41M	20.07	22.77%	―	58.67%	70.38%
CODA	72 Outperform	$82.22M	25.39	6.40%	―	15.63%	64.98%
VTSI	67 Neutral	$68.70M	47.20	3.10%	―	-29.61%	-78.85%
Sector *	66 Neutral	$4.44B	12.08	5.34%	5.82%	4.17%	-11.81%
XTIA	58 Neutral	$28.75M	―	-327.59%	―	―	―
CVU	52 Neutral	$40.30M	21.83	7.62%	―	-7.34%	-88.84%
SPCE	48 Neutral	$124.31M	―	-95.46%	―	-34.33%	52.30%

Innovative Solutions And Support Corporate Events

Innovative Solutions Appoints Denise Devine to Board

On January 27, 2025, Innovative Solutions & Support, Inc. announced the appointment of Denise L. Devine as an independent director to its Board of Directors. Ms. Devine, who also joins the Audit Committee, brings extensive experience in finance and business leadership, having founded and led companies in the health and wellness sector. Her appointment is part of IS&S’s strategy to enhance board expertise and support its long-term strategic goals. The move is expected to bolster the company’s leadership as it continues to advance in the aerospace industry.