Innovative Solutions And Support (ISSC) AI Stock Analysis

• Market Cap: $228.28M
• Dividend Yield: N/A
• Average Volume (3M): 796.71K
• Price to Earnings (P/E): 19.5
• Beta (1Y): 1.36
• Revenue Growth: 72.82%
• EPS Growth: 80.22%
• Country: US
• Employees: 133
• Sector: Industrials
• Sector Strength: 79
• Industry: Aerospace & Defense
• EPS (TTM): 0.14
• Shares Outstanding: 17,628,162
• 10 Day Avg. Volume: 704,341
• 30 Day Avg. Volume: 796,710
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.18
• Enterprise Value/Revenue: 3.49
• Enterprise Value/Gross Profit: 7.72
• Enterprise Value/Ebitda: 13.75
• 1Y Price Target: $15.00
• Price Target Upside: 15.83% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 75 Outperform
• Price Target: $15.00 ▲(15.83% Upside)

Innovative Solutions And Support shows strong financial performance and strategic growth initiatives, supported by a new credit facility. While technical indicators suggest short-term weakness, the stock's valuation remains attractive. The company's ability to manage cost pressures and leverage will be crucial for sustaining growth.

Innovative Solutions And Support Business Overview & Revenue Model

Company Description

Innovative Solutions And Support (ISSC) is a technology-driven company specializing in providing advanced software solutions and support services to various industries, including aerospace, defense, and commercial sectors. The company focuses on delivering cutting-edge systems for mission planning, logistics, and data analysis, ensuring clients achieve operational efficiency and enhanced decision-making capabilities. ISSC is committed to innovation, leveraging state-of-the-art technology to meet the evolving needs of its customers.

How the Company Makes Money

ISSC generates revenue primarily through the sale of software licenses, subscription services, and maintenance contracts for its technological solutions. The company also earns money by providing consulting services, training, and technical support to its clients, which are critical for the successful implementation and use of their products. Key revenue streams include long-term contracts with government and defense agencies, as well as partnerships with major technology firms that enhance their service offerings and market reach. Additionally, ISSC may benefit from recurring revenue through software-as-a-service (SaaS) models, which provide ongoing income as clients subscribe to their solutions.

Innovative Solutions And Support Financial Statement Overview

Summary

Innovative Solutions And Support exhibits 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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	77.43M	47.20M	34.81M	27.74M	23.04M	21.60M
Gross Profit	34.99M	25.91M	21.31M	16.67M	12.78M	11.80M
EBITDA	19.66M	11.89M	8.73M	7.71M	4.33M	3.18M
Net Income	11.70M	7.00M	6.03M	5.52M	5.06M	3.27M
Balance Sheet
Total Assets	91.78M	82.38M	62.96M	34.71M	27.09M	41.55M
Cash, Cash Equivalents and Short-Term Investments	601.76K	538.98K	3.10M	17.25M	8.27M	12.60M
Total Debt	23.26M	28.03M	19.51M	28.68K	28.68K	45.13K
Total Liabilities	35.00M	35.74M	24.32M	3.96M	2.50M	13.78M
Stockholders Equity	56.79M	46.64M	38.64M	30.75M	24.59M	27.77M
Cash Flow
Free Cash Flow	5.13M	5.14M	1.80M	5.93M	4.25M	2.07M
Operating Cash Flow	10.78M	5.80M	2.10M	6.09M	4.59M	2.19M
Investing Cash Flow	-24.10M	-16.88M	-36.16M	2.59M	-340.68K	-118.80K
Financing Cash Flow	13.40M	8.53M	19.91M	301.15K	-19.77M	-705.33K

Innovative Solutions And Support Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 12.95
• 50DMA: Negative
• 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 Negative. The current price of 12.95 is below the 20-day moving average (MA) of 15.32, below the 50-day MA of 14.82, and above the 200-day MA of 10.02, indicating a neutral trend. The MACD of -0.58 indicates Positive momentum. The RSI at 40.62 is Neutral, neither overbought nor oversold. The STOCH value of 44.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$228.28M	19.53	23.40%	―	72.82%	80.22%
CODA	72 Outperform	$91.17M	26.76	6.40%	―	24.78%	23.18%
Sector *	64 Neutral	$10.72B	16.04	7.75%	2.00%	2.65%	-15.66%
VTSI	59 Neutral	$67.34M	167.98	0.83%	―	-17.36%	-94.28%
CVU	49 Neutral	$32.58M	18.87	-3.87%	―	-14.35%	-105.66%
XTIA	47 Neutral	$40.71M	―	-434.59%	―	―	―
SPCE	47 Neutral	$179.11M	―	-91.98%	―	-84.19%	55.27%

Innovative Solutions And Support Corporate Events

Innovative Solutions Secures $100 Million Credit Agreement

On July 18, 2025, Innovative Solutions and Support, Inc. entered into a new five-year, $100 million credit agreement with JPMorgan Chase Bank, replacing its previous $35 million line of credit. This agreement includes a $30 million revolving credit facility, a $25 million term loan, and a $45 million delayed draw term loan, with an option for additional loan commitments. The new credit facilities are intended to provide expanded liquidity and flexibility, supporting the company’s long-term growth strategy and capital allocation priorities.