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1. Company Snapshot

1.a. Company Description

HEICO Corporation, through its subsidiaries, designs, manufactures, and sells aerospace, defense, and electronic related products and services in the United States and internationally.The company's Flight Support Group segment provides jet engine and aircraft component replacement parts; thermal insulation blankets and parts; renewable/reusable insulation systems; and specialty components.This segment also distributes hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical components for the commercial, regional, and general aviation markets; and offers repair and overhaul services for jet engine and aircraft component parts, avionics, instruments, composites, and flight surfaces of commercial aircraft, as well as for avionics and navigation systems, subcomponents, and other instruments utilized on military aircraft.


Its Electronic Technologies Group segment provides electro-optical infrared simulation and test equipment; electro-optical laser products; electro-optical, microwave, and other power equipment; electromagnetic and RFI shielding and suppression filters; high-speed interface products; high voltage interconnection devices; high voltage advanced power electronics; power conversion products; and underwater locator beacons and emergency locator transmission beacons.This segment also offers traveling wave tube amplifiers and microwave power modules; three-dimensional microelectronic and stacked memory products; harsh environment connectivity products and custom molded cable assemblies; radio frequency and microwave amplifiers, transmitters, and receivers; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems; and nuclear radiation detectors.The company serves customers primarily in the aviation, defense, space, medical, telecommunications, and electronics industries.


HEICO Corporation was incorporated in 1957 and is headquartered in Hollywood, Florida.

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1.b. Last Insights on HEI

HEICO Corporation's recent performance has been driven by strong aerospace presence, solid liquidity, and low debt. The company's Q4 earnings report revealed a 35% increase in net income to a record $188.3 million, with net sales up 19%. Its earnings per share (EPS) rose 34.3% year-over-year, beating estimates. A Zacks upgrade to a Buy rating cites growing optimism about earnings prospects. Additionally, the company's strong segment sales growth and lower interest expenses have contributed to its growth outlook across commercial and defense markets.

1.c. Company Highlights

2. HEICO's Q4 FY2025 Earnings: Strong Growth and Positive Outlook

HEICO Corporation reported a strong fourth quarter fiscal 2025, with consolidated net income increasing 35% to a record $188.3 million or $1.33 per diluted share, up from $139.7 million or $0.99 per diluted share in the same period last year. Consolidated operating income and net sales also set record results, improving by 28% and 19%, respectively. The company's actual EPS of $1.33 beat estimates of $1.22, indicating a positive surprise. The Flight Support Group's net sales increased 21% to a record $834.4 million, driven by 16% organic growth and acquisitions. The Electronic Technologies Group's net sales also rose 14% to a record $384.8 million, driven by 7% organic growth and acquisitions.

Publication Date: Dec -23

📋 Highlights
  • Record Net Income Growth:: Consolidated net income surged 35% to $188.3 million ($1.33/share) in Q4 2025, up from $139.7 million ($0.99/share) in Q4 2024.
  • Operating Group Sales Milestones:: Flight Support Group (FSG) net sales hit $834.4 million (+21%), driven by 16% organic growth and acquisitions; Electronic Technologies Group (ETG) reached $384.8 million (+14%) with 7% organic growth.
  • EBITDA & Cash Flow Expansion:: Consolidated EBITDA rose 26% to $331.4 million, while operating cash flow jumped 44% to $295.3 million, reflecting strong operational efficiency.
  • Acquisition Momentum:: Completed five acquisitions in 2025 and added two pending deals, expanding its portfolio to ~110 companies since the program began 27 years ago.
  • Balance Sheet Strength:: Net debt-to-EBITDA ratio improved to 1.60, with $934 million in annual operating cash flow providing flexibility for strategic M&A and long-term net income growth targets of 15-20%.

Segment Performance

The Flight Support Group saw improved margins in 2025 due to a favorable mix of repairs and overhauls, including heavier PMA and DER repairs, as well as growth in defense-related business. The Electronic Technologies Group is expected to see mid- to low-single-digit organic growth in the next year, driven by demand in space and defense tech. As management noted, "the market will continue to evolve, with opportunities in both established and new segments."

Valuation and Growth Prospects

With a P/E Ratio of 67.47 and an EV/EBITDA ratio of 39.75, HEICO's valuation suggests that the market has already priced in significant growth prospects. However, the company's history of compounding its bottom line at 18% over 35 years and its target of 15-20% net income growth over the long term indicate that there is still room for growth. The company's strong balance sheet, with a net debt-to-EBITDA ratio of 1.6, provides flexibility for acquisitions, which is a key growth driver.

Acquisitions and Integration

HEICO completed five acquisitions in fiscal 2025 and announced two new agreements expected to close in the first quarter of calendar 2026. The company's acquisition program, started 27 years ago, has led to the purchase of around 110 companies, giving them a strong track record and reputation as a great home for sellers. The integration of HEICO and Wencor part and repair catalogs offers opportunities for cross-selling, and management believes this can be a growth tailwind.

Outlook and Challenges

HEICO expects net sales growth across both operating groups in fiscal 2026, driven by organic growth and acquisitions. The company remains optimistic about its prospects, citing its strong financial position, experienced acquisition team, and ability to integrate new businesses. However, the company also faces challenges, such as qualifying PMA parts for military aircraft, which can be more complicated than for commercial aircraft. Analysts estimate next year's revenue growth at 9.9%, indicating a continued positive trend.

3. NewsRoom

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HEICO Corporation Completes Axillon Fuel Containment Acquisition

Jan -27

Source: accessnewswire.com

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Heico Corporation (NYSE:HEI) Given Average Recommendation of “Moderate Buy” by Brokerages

Dec -28

Source: defenseworld.net

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Which Aerospace Stock Stands Out: Astronics or Heico?

Dec -22

Source: zacks.com

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Heico Corporation (HEI) Just Reclaimed the 50-Day Moving Average

Dec -22

Source: zacks.com

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Assenagon Asset Management S.A. Buys Shares of 18,505 Heico Corporation $HEI

Dec -22

Source: defenseworld.net

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Reassessing HEICO's Perennially High P/E: Upgrading To 'Neutral'

Dec -21

Source: seekingalpha.com

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Why Heico Stock Zoomed Nearly 6% Higher Today

Dec -19

Source: fool.com

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HEICO Corporation (HEI) Q4 2025 Earnings Call Transcript

Dec -19

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.90%)

6. Segments

Flight Support Group (FSG)

Expected Growth: 5.6%

None

Intersegment Sales

Expected Growth: 5.5%

HEICO's intersegment sales are driven by its proprietary products and services, strong relationships with customers, and strategic acquisitions. The company's focus on innovation and R&D investments also contributes to its growth.

Electronic Technologies Group (ETG)

Expected Growth: 6.5%

HEICO’s Electronic Technologies Group benefits from increasing demand for electronic, electrical and electro-optical equipment in aerospace, defense, and industrial markets, driven by technological advancements, growing need for surveillance and security, and rising global defense expenditures.

7. Detailed Products

Aerospace and Defense Products

HEICO Corporation's Aerospace and Defense Products segment provides a range of products and services for the aerospace, defense, and space industries.

Electronic Technologies

HEICO Corporation's Electronic Technologies segment designs and manufactures a range of electronic components and subsystems for the aerospace, defense, and industrial markets.

Aerospace and Defense Electronics

HEICO Corporation's Aerospace and Defense Electronics segment provides a range of electronic components and subsystems for the aerospace and defense industries.

Space Components and Equipment

HEICO Corporation's Space Components and Equipment segment designs and manufactures a range of components and equipment for the space industry.

Test and Simulation Solutions

HEICO Corporation's Test and Simulation Solutions segment provides a range of test and simulation solutions for the aerospace, defense, and industrial markets.

Flight Support and Technical Services

HEICO Corporation's Flight Support and Technical Services segment provides a range of technical services and support for the aerospace and defense industries.

8. HEICO Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for HEICO Corporation is medium due to the availability of alternative products and services in the aerospace and electronics industries.

Bargaining Power Of Customers

The bargaining power of customers for HEICO Corporation is low due to the company's strong relationships with its customers and the lack of buyer concentration in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers for HEICO Corporation is medium due to the presence of multiple suppliers in the industry, but the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for HEICO Corporation is low due to the high barriers to entry in the aerospace and electronics industries, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry for HEICO Corporation is high due to the competitive nature of the aerospace and electronics industries, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.70%
Debt Cost 3.95%
Equity Weight 56.30%
Equity Cost 9.49%
WACC 7.07%
Leverage 77.61%

11. Quality Control: HEICO Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 5.4/10

Value: 0.4

Growth: 8.4

Quality: 6.9

Yield: 0.0

Momentum: 8.0

Volatility: 8.3

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Yield: 6.0

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A-Score: 4.8/10

Value: 0.7

Growth: 3.4

Quality: 6.8

Yield: 0.0

Momentum: 9.5

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

331.52$

Current Price

331.52$

Potential

-0.00%

Expected Cash-Flows