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Innovative Solutions And Support
(NASDAQ:ISSC)
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Rating:71Outperform
Price Target:
$20.50
▲(7.11% Upside)
Action:Upgraded
Date:07/22/26
The score is driven primarily by strong underlying financial performance (growth, profitability, and improving TTM cash flow) and supportive earnings-call indicators like backlog expansion and strong free-cash-flow generation. This is tempered by increased leverage from acquisitions and mixed technical/valuation signals, including a mid-range P/E and only moderately positive price momentum.
Positive Factors
Multi-year Revenue & Profit Growth
Sustained revenue expansion and improving net income over multiple years signal scalable demand and successful commercialization of products. This scale supports higher operating leverage, broader customer relationships and deeper engineering investments that underpin durable competitive positioning over the next several quarters.
Negative Factors
Rising Leverage from Acquisitions
Meaningfully higher leverage reduces financial flexibility and increases interest and refinancing risk, particularly if cash conversion softens. Elevated net debt from acquisition financing amplifies execution risk on integrations and constrains the ability to pursue opportunistic investments without deleveraging progress.
Read all positive and negative factors
Positive Factors
Negative Factors
Multi-year Revenue & Profit Growth
Sustained revenue expansion and improving net income over multiple years signal scalable demand and successful commercialization of products. This scale supports higher operating leverage, broader customer relationships and deeper engineering investments that underpin durable competitive positioning over the next several quarters.
Read all positive factors
Innovative Solutions And Support Key Performance Indicators (KPIs)
Any
Backlog
Measures the value of unfulfilled orders or contracted work waiting to be delivered, giving a view of near-term revenue visibility and demand strength. A healthy backlog can signal steady future cash flows, while an unusually large or growing backlog may indicate delivery bottlenecks, supply constraints, or cancellation risk that could delay revenue and pressure margins.
Measures the value of unfulfilled orders or contracted work waiting to be delivered, giving a view of near-term revenue visibility and demand strength. A healthy backlog can signal steady future cash flows, while an unusually large or growing backlog may indicate delivery bottlenecks, supply constraints, or cancellation risk that could delay revenue and pressure margins.
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The Fly
The FlyInnovative Solutions And Support (ISSC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$327.26M
Dividend YieldN/A
Average Volume (3M)373.98K
Price to Earnings (P/E)19.1
Beta (1Y)1.36
Revenue Growth39.21%
EPS Growth56.31%
CountryUS
Employees147
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.96
Shares Outstanding17,892,748
10 Day Avg. Volume280,737
30 Day Avg. Volume373,980
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)3.40
Price to Sales (P/S)2.60
P/FCF Ratio32.32
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$29.50Price Target Upside54.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.92
Revenue Forecast (FY)$91.75M
Innovative Solutions And Support Business Overview & Revenue Model
Company Description
Innovative Aerosystems, Inc., established in 1988 and based in Exton, Pennsylvania, specializes in the engineering, manufacturing, and provision of sophisticated avionic systems. The company offers a broad spectrum of advanced solutions, including...
Innovative Solutions And Support Earnings Call Summary
Earnings Call Date:May 14, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 13, 2026
Earnings Call Sentiment Positive
The call highlights solid operational momentum: modest revenue growth (2% YoY), meaningful product sales growth (~8.3%), strong operational cash generation and backlog expansion, plus strategic acquisitions adding ~$10M in annual revenue and substantially expanding avionics/autopilot capabilities. Offsetting these positives were near-term profitability pressures—notably a ~35.8% drop in GAAP net income, declines in adjusted metrics and a ~51% rise in operating expenses driven by R&D and acquisition costs—and a $7M F-16 revenue headwind tied to transition timing. Liquidity and leverage remain manageable with available credit. Overall, the company shows constructive strategic and cash-flow progress while absorbing near-term cost and timing impacts from acquisitions and program transitions.Positive Updates
Revenue Growth
Net revenues of $22.4M in Q2, up 2% year-over-year, driven by strong organic growth in commercial aerospace and business aviation.
Negative Updates
F-16 Revenue Decline
F-16 related revenues declined by approximately $7M year-over-year due to timing and transition of manufacturing approvals, creating a quarter-over-quarter mix shift away from defense to commercial sales.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Net revenues of $22.4M in Q2, up 2% year-over-year, driven by strong organic growth in commercial aerospace and business aviation.
Read all positive updates
Company Guidance
Management guided third‑quarter revenues of $24–$26 million and reiterated that organic revenue for FY26 should be essentially flat year‑over‑year (reflecting a $7M F‑16 pull‑forward into FY25), said F‑16 volumes should normalize to roughly $3–$5 million per quarter going forward, expects long‑term gross margins in the mid‑40% range (Q2 was 51.1%), and plans to increase R&D spending after a ~$1.0M Q2 step‑up; backlog was ~$87M (up ~$7M), Q2 new orders were $24.7M, the recent acquisitions are projected to add ~$10M of annual revenue at ~50% blended gross margin, and liquidity/financials supporting the plan include cash of $6.8M, total debt $55.1M (net debt $48.3M), cash plus available credit ≈ $49.8M, net leverage ~1.7x, YTD cash flow from operations $10.5M, H1 capex $2.7M and H1 free cash flow $7.7M.Innovative Solutions And Support Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
70
Positive
Cash Flow
77
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 90.56M | 84.30M | 47.20M | 34.81M | 27.74M | 23.04M |
| Gross Profit | 44.22M | 38.30M | 25.91M | 21.31M | 16.67M | 12.78M |
| EBITDA | 28.37M | 25.41M | 11.89M | 8.73M | 7.71M | 4.41M |
| Net Income | 17.05M | 15.63M | 7.00M | 6.03M | 5.52M | 5.06M |
Balance Sheet | ||||||
| Total Assets | 138.27M | 103.36M | 82.38M | 62.96M | 34.71M | 27.09M |
| Cash, Cash Equivalents and Short-Term Investments | 6.76M | 2.69M | 538.98K | 3.10M | 17.25M | 8.27M |
| Total Debt | 54.92M | 24.14M | 28.03M | 19.51M | 28.68K | 42.98K |
| Total Liabilities | 66.15M | 38.76M | 35.74M | 24.32M | 3.96M | 2.50M |
| Stockholders Equity | 72.11M | 64.60M | 46.64M | 38.64M | 30.75M | 24.59M |
Cash Flow | ||||||
| Free Cash Flow | 13.20M | 6.79M | 5.14M | 1.80M | 5.93M | 4.25M |
| Operating Cash Flow | 20.62M | 13.30M | 5.80M | 2.10M | 6.09M | 4.59M |
| Investing Cash Flow | -40.43M | -6.51M | -16.88M | -36.16M | 2.59M | -340.68K |
| Financing Cash Flow | 25.34M | -4.64M | 8.53M | 19.91M | 301.15K | -19.77M |
Innovative Solutions And Support Technical Analysis
Positive
19.14
Price Trends
17.87
Positive
20.27
Negative
18.25
Positive
Market Momentum
0.16
Positive
57.63
Neutral
45.78
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 19.14 is above the 20-day moving average (MA) of 18.64, above the 50-day MA of 17.87, and above the 200-day MA of 18.25, indicating a bullish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 57.63 is Neutral, neither overbought nor oversold. The STOCH value of 45.78 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 Risk Analysis
Innovative Solutions And Support disclosed 37 risk factors in its most recent earnings report. Innovative Solutions And Support 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
Innovative Solutions And Support Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $327.26M | 19.05 | 26.00% | ― | 39.21% | 56.31% | |
65 Neutral | $870.10M | 26.98 | 8.32% | 0.80% | 24.88% | -24.68% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $5.83B | -114.48 | -0.96% | ― | 8.95% | 78.82% | |
61 Neutral | $2.70B | -77.16 | -4.86% | ― | 6.48% | -191.94% | |
46 Neutral | $808.07M | -3.18 | -258.98% | ― | ― | -33.98% | |
39 Underperform | $157.89M | -0.30 | 251.21% | ― | ― | ― |
* Industrials Sector Average
ISSC
Innovative Solutions And Support
19.47
2.01
11.51%
DCO
Ducommun
182.83
90.18
97.33%
MRCY
Mercury Systems
105.79
52.23
97.52%
NPK
National Presto
134.91
38.59
40.06%
EVTL
Vertical Aerospace
1.27
-4.89
-79.38%
EVEX
Eve Holding
2.40
-4.23
-63.80%
Innovative Solutions And Support Corporate Events
Business Operations and StrategyM&A Transactions
Innovative Solutions And Support completes Aydin Displays acquisition
Positive
Jul 21, 2026
On July 21, 2026, Innovative Aerosystems completed the acquisition of Aydin Displays, a Birdsboro, Pa.-based designer and manufacturer of ruggedized display technologies for defense, industrial, and other mission-critical aerospace applications. A...
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.