HEICO (HEI) AI Stock Analysis

• Market Cap: $30.51B
• Dividend Yield: 0.09%
• Average Volume (3M): 563.31K
• Price to Earnings (P/E): 61.8
• Beta (1Y): 0.68
• Revenue Growth: 23.06%
• EPS Growth: 32.43%
• Country: US
• Employees: 10,000
• Sector: Industrials
• Sector Strength: 70
• Industry: Aerospace & Defense
• EPS (TTM): 4.04
• Shares Outstanding: 55,024,967
• 10 Day Avg. Volume: 686,730
• 30 Day Avg. Volume: 563,308
• PEG Ratio: 1.91
• Price to Book (P/B): N/A
• Price to Sales (P/S): 9.10
• Price to Cash Flow (P/CF): 44.70
• P/FCF Ratio: 39.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $279.60
• Price Target Upside: 11.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

HEICO's strong financial performance and very positive earnings call results drive the overall score. The stock's technical indicators suggest a potential overbought condition, and its high valuation could limit upside potential. Despite some supply chain challenges, the company's strategic acquisitions and record financial metrics support its robust market position.

Positive Factors

Acquisitions and Synergies

The Wencor acquisition is still exceeding expectations more than a year after closing, with a strong cultural fit and ability to achieve synergies.

Financial Performance

HEI reported strong financial results with earnings per share and revenues surpassing market expectations.

Market Performance

Shares of Heico, a leading aerospace aftermarket parts provider, traded up 14% after the company reported strong first-quarter results above consensus.

Negative Factors

Valuation Concerns

Even after today's move, HEI trades at a 145% premium to the S&P FY2 P/E, which compares to its 2018-19 average of 160%.

HEICO Business Overview & Revenue Model

Company Description

HEICO Corporation (HEI) is an aerospace and electronics company primarily engaged in the design, manufacture, and sale of aerospace, defense, and electronic-related products and services. It operates through two main segments: the Flight Support Group (FSG) and the Electronic Technologies Group (ETG). The company provides cost-effective aftermarket parts for the aviation industry and high-performance components for a wide array of industries, including defense, communications, and healthcare.

How the Company Makes Money

HEICO Corporation generates revenue through its two main business segments. The Flight Support Group (FSG) offers replacement parts, repair and overhaul services, and distribution of aircraft components, primarily for commercial airlines, defense contractors, and aircraft maintenance companies. This segment capitalizes on the demand for cost-effective solutions in the aviation aftermarket. The Electronic Technologies Group (ETG) provides high-reliability electronic components and subsystems for aviation, defense, space, medical, and telecommunications industries. This segment benefits from long-term contracts and partnerships with major players in these fields, offering products that are integral to critical systems and components. HEICO's revenue model is bolstered by strategic acquisitions that expand its product offerings and market reach, as well as a focus on innovation and quality in its manufacturing processes.

HEICO Financial Statement Overview

Summary

HEICO demonstrates exemplary financial health with strong revenue growth, profitability margins, a debt-free balance sheet, and robust cash flow generation, positioning it well in the industry.

Income Statement

HEICO demonstrates strong financial performance with a consistently high gross profit margin of 55.42% and a solid net profit margin of 14.21% in the TTM (Trailing-Twelve-Months). The revenue growth rate is impressive at 3.47% from the previous year, indicating steady expansion. EBIT and EBITDA margins are robust at 21.81% and 24.02% respectively, showcasing the company's operational efficiency and profitability.

Balance Sheet

HEICO's balance sheet is strong, with a debt-to-equity ratio of 0.00, reflecting no outstanding debt and a healthy equity position. The return on equity (ROE) is commendable at 13.40%, indicating effective management in generating returns from equity. The equity ratio stands at 53.67%, highlighting a stable capital structure with more than half of the assets funded by equity.

Cash Flow

HEICO's cash flow is robust with an operating cash flow to net income ratio of 1.35, suggesting strong cash generation relative to net income. The free cash flow growth rate is 14.23%, indicating effective capital management and positive cash flow trajectory. Additionally, the free cash flow to net income ratio of 1.24 underscores efficient conversion of earnings to cash.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.99B	3.86B	2.97B	2.21B	1.87B	1.79B
	Gross Profit
1.59B	1.50B	1.15B	862.76M	727.42M	682.13M
	EBIT
870.87M	824.46M	625.34M	496.84M	392.90M	376.65M
	EBITDA
958.85M	824.46M	756.77M	592.71M	486.24M	465.71M
	Net Income Common Stockholders
567.37M	514.11M	403.60M	351.68M	304.22M	313.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.54M	162.10M	171.05M	139.50M	108.30M	406.85M
	Total Assets
781.64M	7.59B	7.20B	4.10B	3.50B	3.55B
	Total Debt
14.22M	2.25B	2.50B	290.27M	236.50M	739.83M
	Net Debt
7.68M	2.09B	2.33B	150.77M	128.20M	332.98M
	Total Liabilities
171.77M	3.90B	3.64B	1.12B	1.20B	1.54B
	Stockholders Equity
469.11M	3.64B	3.15B	2.65B	2.30B	2.01B
Cash Flow		Free Cash Flow
701.53M	614.11M	399.30M	435.87M	407.90M	386.19M
	Operating Cash Flow
763.75M	672.37M	448.74M	467.86M	444.08M	409.13M
	Investing Cash Flow
-511.01M	-293.20M	-2.48B	-395.83M	-183.45M	-199.04M
	Financing Cash Flow
-281.00M	-389.39M	2.07B	-33.83M	-558.97M	137.74M

HEICO Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 249.97
• 50DMA: Positive
• 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 HEI, the sentiment is Neutral. The current price of 249.97 is below the 20-day moving average (MA) of 259.37, above the 50-day MA of 248.81, and above the 200-day MA of 248.01, indicating a neutral trend. The MACD of 6.32 indicates Positive momentum. The RSI at 65.37 is Neutral, neither overbought nor oversold. The STOCH value of 64.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HEI.

HEICO Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HEI	78 Outperform	$30.51B	61.84	16.18%	0.09%	23.06%	32.43%
LHX	76 Outperform	$41.68B	28.19	7.85%	2.11%	9.82%	22.33%
CW	75 Outperform	$11.93B	30.00	16.95%	0.27%	9.69%	14.65%
WWD	71 Outperform	$9.87B	27.83	16.82%	0.61%	7.38%	26.61%
MOG.A	70 Neutral	$5.19B	25.03	12.07%	0.69%	7.22%	22.61%
TXT	64 Neutral	$11.93B	15.17	11.63%	0.12%	0.14%	-5.38%
Sector *	62 Neutral	$7.62B	13.01	3.19%	3.32%	3.77%	-14.28%

HEICO Corporate Events

HEICO Announces Retirement of Chief Accounting Officer

HEICO Corporation, a company involved in the aerospace and electronics industries, announced that its Chief Accounting Officer, Steven M. Walker, will retire on February 14, 2025, after a long tenure since 2002. Walker will continue with the company until March 31, 2025, to ensure a smooth transition, and will be succeeded by Bradley K. Rowen, who has been with HEICO since 2011 and has a strong background in financial reporting and compliance.