Innovative Solutions And Support (ISSC) AI Stock Analysis

• Market Cap: $321.52M
• Dividend Yield: N/A
• Average Volume (3M): 429.66K
• Price to Earnings (P/E): 21.7
• Beta (1Y): 1.39
• Revenue Growth: 78.60%
• EPS Growth: 121.71%
• Country: US
• Employees: 133
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.39
• Shares Outstanding: 17,636,625
• 10 Day Avg. Volume: 849,835
• 30 Day Avg. Volume: 429,660
• PEG Ratio: 0.11
• Price to Book (P/B): 3.40
• Price to Sales (P/S): 2.60
• P/FCF Ratio: 32.32
• Enterprise Value/Market Cap: 0.83
• Enterprise Value/Revenue: 3.45
• Enterprise Value/Gross Profit: 7.63
• Enterprise Value/Ebitda: 13.58
• 1Y Price Target: $18.75
• Price Target Upside: -0.95% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.73
• Revenue Forecast (FY): $86.23M

• Rating: 75 Outperform
• Price Target: $21.50 ▲(13.58% Upside)

Innovative Solutions And Support demonstrates strong financial performance and strategic growth initiatives, contributing to a solid stock score. While technical indicators suggest bullish momentum, potential overvaluation and future revenue challenges warrant caution. The company's strategic board appointment further supports its growth outlook.

Positive Factors

Revenue Growth

Strong revenue growth indicates successful market penetration and product adoption, supporting long-term business expansion and stability.

Product Development

New product developments enhance competitive positioning and open new market opportunities, driving future revenue and growth.

Financial Health

A strong balance sheet with low debt enhances financial flexibility, enabling strategic investments and resilience against economic fluctuations.

Negative Factors

Expected Revenue Decline

Anticipated revenue decline due to prior pull-forwards could impact growth momentum, requiring strategic adjustments to sustain performance.

Margin Pressure

Reliance on lower-margin military sales could pressure overall profitability, necessitating focus on higher-margin opportunities for margin improvement.

Gross Profit Margin Decline

Declining gross profit margins suggest cost pressures, which could affect long-term profitability if not addressed through cost management strategies.

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 generates revenue through multiple streams, primarily by selling software licenses for its proprietary solutions, which include customizable flight operation and maintenance management software. In addition to software sales, the company offers ongoing technical support and maintenance contracts, providing a steady stream of recurring revenue. ISSC also partners with various aviation organizations and regulatory bodies to deliver tailored solutions, which can lead to additional project-based income. Furthermore, the company participates in government contracts and grants within the aerospace sector, contributing to its overall earnings.

Innovative Solutions And Support Financial Statement Overview

Summary

Innovative Solutions And Support shows strong financial health with robust revenue growth, profitability, and cash flow generation. The company maintains a solid balance sheet with low leverage, supporting its financial stability. Minor areas for improvement include maintaining gross profit margins and optimizing cash conversion.

Income Statement

Innovative Solutions And Support has demonstrated strong revenue growth, with a notable increase of 8.86% in the most recent year. The company maintains healthy profitability, with a gross profit margin of 48.06% and a net profit margin of 18.54%. The EBIT and EBITDA margins are also robust at 25.71% and 30.14%, respectively, indicating efficient operations and cost management. However, the slight decline in gross profit margin from previous years suggests potential cost pressures.

Balance Sheet

The company exhibits a solid financial position with a low debt-to-equity ratio of 0.37, indicating prudent leverage management. Return on equity is strong at 24.19%, reflecting effective use of shareholder capital. The balance sheet shows a healthy equity base, but the increase in total debt over the years warrants monitoring to ensure it does not impact financial flexibility.

Cash Flow

Cash flow generation is robust, with operating cash flow coverage remaining stable. Free cash flow has grown significantly by 32.36%, indicating strong cash generation capabilities. The ratio of free cash flow to net income is healthy at 51.05%, suggesting efficient conversion of earnings into cash. However, the operating cash flow to net income ratio is slightly below optimal, which could indicate some inefficiencies in cash conversion.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	77.43M	84.30M	47.20M	34.81M	27.74M	23.04M
Gross Profit	34.99M	40.51M	25.91M	21.31M	16.67M	12.78M
EBITDA	19.66M	25.41M	11.89M	8.73M	7.71M	4.33M
Net Income	11.70M	15.63M	7.00M	6.03M	5.52M	5.06M
Balance Sheet
Total Assets	91.78M	103.36M	83.67M	62.96M	35.36M	27.09M
Cash, Cash Equivalents and Short-Term Investments	601.76K	2.69M	538.98K	3.10M	17.25M	8.27M
Total Debt	23.26M	24.14M	28.03M	19.93M	28.68K	42.98K
Total Liabilities	35.00M	38.76M	37.03M	24.32M	4.61M	2.50M
Stockholders Equity	56.79M	64.60M	46.64M	38.64M	30.75M	24.59M
Cash Flow
Free Cash Flow	5.13M	6.79M	5.14M	1.80M	5.93M	4.25M
Operating Cash Flow	10.78M	13.30M	5.80M	2.10M	6.09M	4.59M
Investing Cash Flow	-24.10M	-6.51M	-16.88M	-36.16M	2.59M	-340.68K
Financing Cash Flow	13.40M	-4.64M	8.53M	19.91M	301.15K	-19.77M

Innovative Solutions And Support Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 18.93
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 18.93 is above the 20-day moving average (MA) of 11.74, above the 50-day MA of 10.46, and above the 200-day MA of 10.95, indicating a bullish trend. The MACD of 1.85 indicates Negative momentum. The RSI at 87.35 is Negative, neither overbought nor oversold. The STOCH value of 98.56 is Negative, 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	75 Outperform	$321.52M	21.70	28.10%	―	78.60%	121.71%
NPK	65 Neutral	$772.77M	19.96	10.69%	0.92%	34.75%	14.31%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DCO	58 Neutral	$1.46B	―	-5.27%	―	3.16%	-213.56%
MRCY	57 Neutral	$4.42B	-133.34	-2.24%	―	8.63%	72.72%
EVEX	43 Neutral	$1.67B	-6.82	-115.63%	―	―	-33.69%
EVTL	25 Underperform	$561.61M	-0.59	―	―	―	―

Innovative Solutions And Support Corporate Events

Innovative Aerosystems Appoints Richard Silfen to Board

Innovative Solutions & Support, Inc., operating as Innovative Aerosystems, announced the appointment of Richard Silfen as an independent director to its Board of Directors on October 28, 2025. This strategic addition aims to enhance the board’s expertise in capital markets and transactions, aligning with the company’s long-term strategy and commitment to growth in the aerospace industry.