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Heico Corp HEI

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Stock XNYS Rating as of
$227.26 −0.77 (0.34%)
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As of Delayed Price Closed
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Company Report

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Heico Earnings: Solid Results and Prospects for Continued Acquisition; Fair Value Up 1% to $173

Nicolas Owens

Heico's second-quarter 2024 operating margins came in very close to our overall expectations. We tweaked the growth rates of the company's subordinate businesses and increased our forecast for the amount of growth it will likely acquire in the medium term, though these changes had very little effect on our fair value estimate, which we have updated to $173 per share from $171.

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Price vs Fair Value

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HEI is trading at a 91% premium.
Price
$227.26
Fair Value
$854.00
Uncertainty
Medium
1-Star Price
$837.63
5-Star Price
$779.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Heico independently develops replacement parts for highly complex aircraft components—the juiciest market segment in aerospace, with a fraction of the required R&D as OEMs.

Bears

Private equity firms have entered the defense supplier market and may push up prices for target companies, which would limit Heico's ability to generate value-accretive inorganic growth.

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Trading Information

Previous Close Price
$228.03
Day Range
$225.49–228.47
52-Week Range
$155.42–232.02
Bid/Ask
$226.16 / $227.91
Market Cap
$31.47 Bil
Volume/Avg
210,446 / 385,898

Key Statistics

Price/Earnings (Normalized)
69.29
Price/Sales
9.04
Dividend Yield (Trailing)
0.09%
Dividend Yield (Forward)
0.10%
Total Yield
0.09%

Company Profile

Heico is an aerospace and defense supplier that focuses on creating niche replacement parts for commercial aircraft and components for defense products. In commercial aerospace, Heico is the largest independent producer of replacement aircraft parts. In the defense market, the company produces niche subcomponents used in targeting technology as well as simulation equipment, among other categories. It operates as two segments: the flight support group,or FSG, and the electronic technologies group, or ETG, both of which supply the aerospace and defense sectors to different degrees. The company is persistently acquisitive, focusing on companies in similar or adjacent markets that are generating strong cash flow with the potential for growth.
Sector
Industrials
Industry
Aerospace & Defense
Stock Style Box
Mid Growth
Total Number of Employees
9,600
Website
https://www.heico.com

Competitors

Valuation

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Metric
HEI
TDG
BA
Price/Earnings (Normalized)
 69.2941.88—
Price/Book Value
 9.28——
Price/Sales
 9.0410.041.47
Price/Cash Flow
 46.7434.7160.37
Price/Earnings
HEI
TDG
BA

Financial Strength

Metric
HEI
TDG
BA
Quick Ratio
 1.462.460.22
Current Ratio
 3.523.711.14
Interest Coverage
 5.512.680.21
Quick Ratio
HEI
TDG
BA

Profitability

Metric
HEI
TDG
BA
Return on Assets (Normalized)
 7.79%8.63%−1.22%
Return on Equity (Normalized)
 16.16%——
Return on Invested Capital (Normalized)
 11.33%14.75%0.74%
Return on Assets
HEI
TDG
BA
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