Innovative Solutions And Support (ISSC) AI Stock Analysis

• Market Cap: $212.24M
• Dividend Yield: N/A
• Average Volume (3M): 709.84K
• Price to Earnings (P/E): 17.9
• Beta (1Y): 1.35
• Revenue Growth: 72.82%
• EPS Growth: 80.22%
• Country: US
• Employees: 133
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.14
• Shares Outstanding: 17,628,162
• 10 Day Avg. Volume: 366,998
• 30 Day Avg. Volume: 709,839
• 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: 1.27
• Enterprise Value/Revenue: 3.49
• Enterprise Value/Gross Profit: 7.72
• Enterprise Value/Ebitda: 13.75
• 1Y Price Target: $14.00
• Price Target Upside: 18.04% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 73 Outperform
• Price Target: $14.00 ▲(18.04% Upside)

Innovative Solutions And Support's strong financial performance and strategic growth initiatives are key strengths, supported by robust revenue growth and a solid balance sheet. However, mixed technical indicators and challenges in maintaining margins present some risks. The stock is reasonably valued, but the absence of a dividend yield may limit its appeal to certain investors.

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 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 performance with robust revenue growth and healthy profitability margins. The balance sheet is stable, with manageable leverage and strong returns on equity. Cash flow generation is impressive, supporting future growth initiatives. However, careful monitoring of cost pressures and debt levels is essential.

Income Statement

Innovative Solutions And Support has demonstrated strong revenue growth with a 19.03% increase in the TTM period, indicating robust demand for its products. The company maintains healthy profitability with a gross profit margin of 45.18% and a net profit margin of 15.11%. The EBIT and EBITDA margins are also solid at 20.88% and 25.39%, respectively, showcasing efficient cost management. However, the slight decline in gross profit margin compared to previous years suggests potential cost pressures.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.41, indicating moderate leverage. The return on equity is strong at 22.85%, reflecting effective utilization of shareholder funds. The equity ratio stands at 61.88%, suggesting a solid equity base. However, the increase in total debt over the years warrants monitoring to ensure it does not impact financial flexibility.

Cash Flow

The company has shown impressive free cash flow growth of 119.02% in the TTM period, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is 0.96, indicating efficient conversion of earnings into cash. The free cash flow to net income ratio is 0.48, suggesting a balanced approach to reinvestment and shareholder returns. Continued focus on cash flow management will be crucial for sustaining growth.

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: Neutral
• Last Price: 11.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ISSC, the sentiment is Neutral. The current price of 11.86 is above the 20-day moving average (MA) of 11.74, below the 50-day MA of 14.02, and above the 200-day MA of 10.37, indicating a neutral trend. The MACD of -0.55 indicates Negative momentum. The RSI at 44.70 is Neutral, neither overbought nor oversold. The STOCH value of 74.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	73 Outperform	$212.24M	17.89	23.40%	―	72.82%	80.22%
CODA	72 Outperform	97.08M	27.00	―	―	29.34%	13.81%
VTSI	59 Neutral	61.86M	153.65	0.82%	―	-17.36%	-94.28%
CVU	49 Neutral	33.10M	-33.69	-3.90%	―	-14.35%	-105.66%
SPCE	49 Neutral	215.39M	-0.38	-114.94%	―	-84.19%	55.27%
XTIA	40 Underperform	48.71M	-0.03	-389.23%	―	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

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.