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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

Breaking News: HEICO Corporation reported Q1 2026 earnings, surpassing estimates with a significant 14.4% sales growth driven by strong Flight Support performance and organic gains across both segments. The company posted a Q1 EPS beat. Institutional investors, such as Citizens Business Bank, have been modifying their holdings, with the bank acquiring 1,773 shares valued at approximately $572,000. Some analysts have given a buy recommendation, while others have a hold rating. The company's recent performance and growth have been notable, with a focus on its Flight Support segment.

1.c. Company Highlights

2. HEICO's Q1 2026 Earnings: Strong Growth and Optimism

HEICO Corporation reported a strong first quarter 2026, with consolidated net income increasing 13% to $190.2 million, or $1.35 per diluted share, beating estimates of $1.28. Consolidated operating income and net sales improved by 15% and 14%, respectively, as compared to the first quarter of fiscal '25. The Flight Support Group delivered strong results with a 21% increase in operating income and a 15% increase in net sales, while the Electronic Technologies Group's net sales improved 12%. The company's actual EPS came in higher than expected, driven by strong operational performance.

Publication Date: Feb -27

📋 Highlights
  • 36-Year Share Price Growth: HEICO achieved a 23% compound annual growth rate in share price over 36 years.
  • Record Q1 Net Income: Consolidated net income rose 13% to $190.2 million ($1.35 per diluted share), with operating income up 15% and net sales up 14%.
  • Flight Support Group Strength: Delivered 21% operating income growth and 15% net sales increase, driven by operational excellence and strong aftermarket demand.
  • Electronic Technologies Margin Pressure: Operating margin dipped due to defense product mix and lower space sales, but pre-amortization margin held at ~24%, with sales up 12%.
  • Acquisition Pipeline & Organic Growth: Organic growth hit 12% despite difficult comparisons, while acquisition activity (e.g., Rockmart Fuel) targets 1st-year earnings accretion and strategic expansion.

Segment Performance

The Flight Support Group's strong performance was driven by a 21% increase in operating income and a 15% increase in net sales. The Electronic Technologies Group's operating margin decreased primarily due to a less favorable product mix of defense products and a decrease in net sales of space products. However, before acquisition-related intangibles amortization expense, the group's operating margin was approximately 24%. Eric Mendelson noted that the recent sequential drop in ETG sales is temporary and expected to bounce back to the low to mid-20s range for the year.

Valuation and Growth Prospects

HEICO's current valuation metrics indicate a premium, with a P/E Ratio of 61.21 and an EV/EBITDA of 35.89. The company's ROE stands at 16.33%, and ROIC at 10.0%. Analysts estimate next year's revenue growth at 7.9%. The company's strong track record of growth, with a 36-year 23% compound annual growth rate in share price, justifies some premium. HEICO's disciplined focus on financial management emphasizes long-term shareholder value through a combination of strategic acquisitions and organic growth while preserving financial strength and flexibility.

Acquisition Activity and Outlook

HEICO continues to pursue selective acquisition opportunities that align with its growth strategy. The company is optimistic about its ability to win new opportunities in fiscal '26 and continue its growth, profitability, and strong cash generation legacy. The acquisition of Rockmart Fuel is expected to be accretive to earnings in the first year, and the company is excited about the Ethos acquisition, which provides access to a growing market in power generation.

Industry Trends and Competitive Advantage

HEICO's PMA business has been a significant contributor to its growth, with a strong presence in the market. The company has a catalog of 20,000 parts, which is a competitive advantage, and is focusing on developing new parts and expanding its offerings. The industry is facing service challenges, and HEICO's availability and quality are key differentiators. Eric Mendelson believes that the industry is recognizing the value of PMA, and HEICO's customer relationships are unmatched.

3. NewsRoom

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Contrasting Outdoor (NASDAQ:POWW) and Heico (NYSE:HEI)

Mar -01

Source: defenseworld.net

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HEICO Corporation (HEI) Q1 2026 Earnings Call Transcript

Feb -26

Source: seekingalpha.com

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HEICO Q1 Earnings Surpass Estimates, Sales Increase Y/Y

Feb -26

Source: zacks.com

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Heico (HEI) Q1 Earnings: Taking a Look at Key Metrics Versus Estimates

Feb -26

Source: zacks.com

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Citizens Business Bank Acquires Shares of 1,773 Heico Corporation $HEI

Feb -26

Source: defenseworld.net

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HEICO Corporation Reports Record Net Income (Up 13%) and Strong Increases in Operating Income (Up 15%) and Net Sales (Up 14%) for the First Quarter of Fiscal 2026

Feb -25

Source: accessnewswire.com

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Heico Corporation $HEI Position Lifted by Fox Run Management L.L.C.

Feb -25

Source: defenseworld.net

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Heico to Report Q1 Earnings: What's in Store for the Stock?

Feb -24

Source: zacks.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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Northrop Grumman

A-Score: 6.2/10

Value: 3.6

Growth: 5.9

Quality: 6.4

Yield: 3.0

Momentum: 9.0

Volatility: 9.0

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L3Harris

A-Score: 6.0/10

Value: 2.8

Growth: 5.6

Quality: 5.4

Yield: 4.0

Momentum: 8.5

Volatility: 9.7

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Raytheon Technologies

A-Score: 5.5/10

Value: 2.3

Growth: 3.4

Quality: 5.0

Yield: 4.0

Momentum: 9.5

Volatility: 8.7

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HEICO

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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A-Score: 5.1/10

Value: 2.8

Growth: 5.1

Quality: 4.5

Yield: 6.0

Momentum: 3.0

Volatility: 9.3

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GE

A-Score: 4.8/10

Value: 0.7

Growth: 3.4

Quality: 6.8

Yield: 0.0

Momentum: 9.5

Volatility: 8.3

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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

329.25$

Current Price

329.25$

Potential

-0.00%

Expected Cash-Flows