Heico Cp Cl A (HEI.A) AI Stock Analysis

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Heico Cp Cl A

(NYSE:HEI.A)

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Rating:74Outperform

Price Target:$251.00▼(-0.89% Downside)

Action:reiterated

Date:08/27/26

HEICO earns a solid score driven by excellent financial performance — rapid multi-year revenue and earnings growth, expanding margins, improving returns on equity, meaningful deleveraging, and consistently strong free cash flow conversion. The most recent earnings call reinforced this, with record sales, profits and cash flow, broad-based organic growth across aerospace, defense and electronics, a record backlog, and a strengthened liquidity position. The primary drag is valuation: a P/E near 57 and a negligible dividend yield leave little cushion if growth decelerates further from the exceptional FY2024 pace. Technicals are mixed — the long-term uptrend is intact above the 100- and 200-day averages, but the stock has recently drifted below its shorter-term averages amid soft momentum. Additional watch items include supply-chain constraints limiting component repair throughput, a sizable acquisition-related intangible base, and a one-time cash outflow that will weigh on fourth-quarter cash flow.

Positive Factors

Diversified Niche Aerospace PlatformHEICO combines an aircraft aftermarket business with specialized electronics and defense products, creating diversified exposure across high-reliability markets. FAA-approved replacement parts, repair services and niche subsystems can support durable demand as aircraft fleets, defense programs and space applications require ongoing investment.

Negative Factors

Supply-Chain ConstraintsPersistent shortages of raw materials and subcomponents can limit HEICO’s ability to convert repair demand and backlog into revenue on schedule. If constraints continue, they may delay customer fulfillment, reduce near-term operating efficiency and make growth more dependent on eventual supply normalization.

Heico Cp Cl A (HEI.A) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $47.55B
Dividend Yield: 0.10%
Average Volume (3M): 305.15K
Price to Earnings (P/E): 56.0
Beta (1Y): 0.83
Revenue Growth: 20.69%
EPS Growth: 31.56%
Country: US
Employees: 11,100
Sector: Industrials
Sector Strength: 63
Industry: Aerospace & Defense

Heico Cp Cl A Business Overview & Revenue Model

Company Description

HEICO Corporation operates as a diversified enterprise, involved in the design, manufacturing, and global distribution of specialized products and services primarily for the aerospace, defense, and electronics sectors. Its activities span both domest...

How the Company Makes Money

HEICO makes money primarily by selling engineered products and related services through its two operating segments. (1) Flight Support Group (FSG): Revenue is generated from the sale of FAA-approved replacement parts (often used as lower-cost alterna...

Heico Cp Cl A Earnings Call Summary

Earnings Call Date:Aug 25, 2026(Q3-2026)|% Change Since:-1.49%|Next Earnings Date:Dec 21, 2026

Earnings Call SentimentPositive

The call conveyed a strongly positive operational and financial performance: record revenues, operating income, EBITDA and cash flow, broad-based organic growth (notably ETG +18% organic), margin expansion on a cash basis, strengthened liquidity and an active, accretive M&A pipeline. Headwinds are mostly operational (supply-chain parts shortages impacting component repairs), acquisition-related amortization pressuring GAAP margins, a one-time estate cash outflow ($70–$75M) that will reduce Q4 operating cash, and elevated valuations affecting deal pricing. On balance, the positives (record results, strong cash, robust backlog and disciplined capital strategy) materially outweigh the challenges.

Positive Updates

Record Consolidated Results

Consolidated net sales rose 23% YoY to a record $1,413.1M; consolidated operating income increased 34% YoY to a record $355.2M; consolidated net income increased 33% YoY to a record $235.4M ($1.67 per diluted share).

Negative Updates

Supply Chain and Parts Shortages

Ongoing supply chain bottlenecks and longer lead times for certain raw materials and subcomponents continue to constrain component repair throughput and cause backlog/fulfillment challenges; some improvement in legacy issues but new constraints have emerged.

Company Guidance

Management guided that for the remainder of fiscal 2026 they expect increased net sales at both the Flight Support Group and Electronic Technologies Group, driven by strong underlying demand and recent acquisitions (Cook Defence, CalRamic), which they expect to be accretive within one year; they reiterated a longer‑term goal to grow net income ~15–20% annually. Segment margin guidance for ETG was 22–24% GAAP (roughly 26–28% EBITDA) for the period, and consolidated metrics shown this quarter included consolidated EBITDA of $415.2M, operating cash flow of $345.3M (≈150% of net income), and Q3 net debt/EBITDA of 1.57x. On capital allocation and liquidity, they issued $1.2B of senior unsecured notes, extended the revolver to June 2031 and increased committed capacity to $2.2B (with an $800M accordion to $3B), paid a $0.13/share semiannual dividend (up 8%), expect strong free‑cash conversion (≈70%) for the year, but flagged a $70–75M operating cash outflow in Q4 related to an estate payment; CapEx was described around ~1.5% of sales (could rise toward ~2%).

Heico Cp Cl A Financial Statement Overview

Summary

A high-quality financial profile across all three statements. Revenue has compounded from ~$1.87B in FY2021 to ~$5.18B TTM with net margin expanding to ~16.4%, and operating income nearly tripling since 2021 (Income Statement: 87). The balance sheet has strengthened materially, with equity at ~57% of assets and debt-to-equity falling from 0.79 in FY2023 to 0.51 in FY2025 after the debt-funded acquisition wave, while ROE improved to ~17.6% (Balance Sheet: 78). Cash generation is a standout, with ~$1.11B operating cash flow and ~$1.03B free cash flow TTM and roughly 93% FCF-to-OCF conversion (Cash Flow: 86). Offsetting factors are decelerating growth versus the exceptional FY2024 pace, heavy reliance on acquisitions leaving a sizable intangible base, and exposure to commercial aerospace and defense cycles.

Income Statement

87Very Positive

Balance Sheet

78Positive

Cash Flow

86Very Positive

Financial statement breakdown
Breakdown	TTM	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	5.18B	4.49B	3.86B	2.97B	2.21B	1.87B
Gross Profit	2.09B	1.79B	1.61B	1.25B	938.82M	796.30M
EBITDA	1.47B	1.22B	1.00B	758.31M	593.74M	487.36M
Net Income	847.72M	690.38M	514.11M	403.60M	351.68M	304.22M
Balance Sheet
Total Assets	9.94B	8.50B	7.59B	7.20B	4.10B	3.50B
Cash, Cash Equivalents and Short-Term Investments	240.96M	217.78M	162.10M	171.05M	139.50M	108.30M
Total Debt	2.54B	2.19B	2.25B	2.50B	304.93M	250.37M
Total Liabilities	4.29B	4.12B	3.90B	4.00B	1.12B	948.88M
Stockholders Equity	4.95B	4.31B	3.64B	3.15B	2.61B	2.26B
Cash Flow
Free Cash Flow	1.03B	861.38M	614.11M	399.30M	435.87M	407.90M
Operating Cash Flow	1.11B	934.27M	672.37M	448.74M	467.86M	444.08M
Investing Cash Flow	-1.11B	-731.69M	-293.20M	-2.48B	-395.83M	-183.45M
Financing Cash Flow	-25.92M	-150.68M	-389.39M	2.07B	-33.83M	-558.97M

Heico Cp Cl A Technical Analysis

Technical Analysis SentimentPositive

Last Price253.26

Price Trends

50DMA233.84Positive

100DMA245.42Positive

200DMA238.14Positive

Market Momentum

MACD6.58Negative

RSI60.10Neutral

STOCH76.62Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HEI.A, the sentiment is Positive. The current price of 253.26 is above the 20-day moving average (MA) of 242.90, above the 50-day MA of 233.84, and above the 200-day MA of 238.14, indicating a bullish trend. The MACD of 6.58 indicates Negative momentum. The RSI at 60.10 is Neutral, neither overbought nor oversold. The STOCH value of 76.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HEI.A.

Heico Cp Cl A Risk Analysis

Heico Cp Cl A disclosed 20 risk factors in its most recent earnings report. Heico Cp Cl A reported the most risks in the "Production" category.

Production - Risks related to the company’s ability to manufacture goods and services

Latest Risks Added

3 New Risks

1.Changes in Internal Control Over Financial ReportingQ4, 2024

2.Item 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and ProceduresQ4, 2024

3.Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETQ4, 2024

Heico Cp Cl A Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

HEI.A against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MOG.A	80Outperform	$10.87B	28.51	18.00%	0.35%	15.65%	78.52%
HONA	78Outperform	$52.70B	27.55	-221.47%	0.00%	8.36%	-32.92%
HEI.A	74Outperform	$40.24B	55.95	18.30%	0.10%	20.69%	31.56%
CW	73Outperform	$17.30B	31.34	21.16%	0.21%	10.71%	21.98%
TDG	71Outperform	$65.67B	34.28	-21.90%	―	19.55%	10.78%
WWD	71Outperform	$19.60B	35.66	21.75%	0.38%	22.35%	41.77%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

* Industrials Sector Average

Performance Comparison

HEI.A and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
HEI.A	Heico Cp Cl	253.26	11.13	4.59%
CW	Curtiss-Wright Corp	472.06	-70.81	-13.04%
MOG.A	Moog Inc.	339.51	144.28	73.91%
TDG	Transdigm	1217.28	-118.49	-8.87%
WWD	Woodward	329.86	70.96	27.41%
HONA	Honeywell Aerospace Inc	165.01	-34.51	-17.30%

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.

Date of analysis: Aug 27, 2026

Heico Cp Cl A AI Stock Analysis