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What this page is: Delvantic's full research page for Heico Corporation (HEI) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-10-07): Designation Watch · Gem Score -14 (−100…+100 Quality+Value blend) · Quality 80 · Value -76 · Sentiment 27 (timing only, not weighted) · Composite fair value $144.18 vs $374.67 at analysis
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
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Heico Corporation
HEI NYSEHeico Corporation is an aerospace and defense technology company focused on specialized replacement parts, components, and electronic systems used across commercial, regional, business, and military aircraft. The company also serves industrial and defense markets with products for turbines, targeting systems, missiles, simulation equipment, and electro-optical applications. Its business is organized around flight support and electronic technologies, reflecting a role in both aircraft maintenance and mission-critical systems supply. Heico Corporation is known for serving niche, high-precision segments where reliability, certification, and long product lifecycles are essential, making it an important supplier within the broader aerospace and defense ecosystem.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 4.90
Total Equity: $4.85B
Shares: 140,771,000
Total Debt: $3.36M
Cash: $217.78M
EBITDA: $1.22B
Total Debt: $3.36M
Cash: $217.78M
Revenue: $4.49B
Revenue: $4.49B
Revenue: $4.49B
Total Equity: $4.85B
Tax Rate: 16.6%
Equity: $4.85B
Total Debt: $3.36M
Cash: $217.78M
Current Liabilities: $832.00M
Long-Term Debt: $0.00
Total Debt: $3.36M
Total Equity: $4.85B
Shares: 140,771,000
Shares: 140,771,000
CapEx: -$72.89M
Shares: 140,771,000
Stock Price: $374.67
Net Income: $690.39M
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 16, 2026 12:25am (52d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.9B | $2.2B | $3.0B | $3.9B | $4.5B |
| Cost of Revenue | $1.1B | $1.3B | $1.8B | $2.4B | $2.7B |
| Gross Profit | $727.4M | $862.8M | $1.2B | $1.5B | $1.8B |
| Operating Expenses | $334.5M | $365.9M | $528.1M | $677.3M | $767.5M |
| Operating Income | $392.9M | $496.8M | $625.3M | $824.5M | $1.0B |
| Net Income | $304.2M | $351.7M | $403.6M | $514.1M | $690.4M |
| EBITDA | $485.9M | $593.2M | $755.4M | $999.8M | $1.2B |
| EPS | $2.25 | $2.59 | $2.94 | $3.71 | $4.97 |
| EPS (Diluted) | $2.21 | $2.55 | $2.91 | $3.67 | $4.90 |
Balance Sheet (Annual)
Last updated: Aug 16, 2026 12:11am (52d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $108.3M | $139.5M | $171.0M | $162.1M | $217.8M |
| Total Current Assets | $937.4M | $1.2B | $1.9B | $2.1B | $2.4B |
| Total Assets | $3.5B | $4.1B | $7.2B | $7.6B | $8.5B |
| Current Liabilities | $294.9M | $420.9M | $665.3M | $663.9M | $832.0M |
| Long-Term Debt | — | — | — | — | — |
| Total Liabilities | $948.9M | $1.1B | $3.6B | $3.5B | $3.7B |
| Total Equity | $2.5B | $3.0B | $3.6B | $4.1B | $4.8B |
| Retained Earnings | $1.9B | $2.3B | $2.6B | $3.1B | $3.6B |
Cash Flow (Annual)
Last updated: Aug 16, 2026 12:25am (52d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $444.1M | $467.9M | $448.7M | $672.4M | $934.3M |
| Capital Expenditure | -$36.2M | -$32.0M | -$49.4M | -$58.3M | -$72.9M |
| Free Cash Flow | $407.9M | $435.9M | $399.3M | $614.1M | $861.4M |
| Acquisitions (net) | -$136.5M | -$347.3M | -$2.4B | -$219.3M | -$629.8M |
| Net Debt Issued / (Repaid) | $0 | $0 | $1.2B | $0 | $0 |
| Dividends Paid | -$23.0M | -$24.5M | -$27.4M | -$29.1M | -$32.0M |
| Stock Buybacks | — | — | — | — | — |
| Net Change in Cash | -$298.6M | $31.2M | $31.5M | -$8.9M | $55.7M |
Growth Trends (YoY %)
Last updated: Aug 16, 2026 12:25am (52d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +18.4% | +34.4% | +30.0% | +16.3% |
| Gross Profit Growth | +18.6% | +33.7% | +30.2% | +19.0% |
| Operating Income Growth | +26.5% | +25.9% | +31.8% | +23.6% |
| Net Income Growth | +15.6% | +14.8% | +27.4% | +34.3% |
| EBITDA Growth | +22.1% | +27.3% | +32.4% | +21.5% |
Dividend History (Last 20)
Last updated: Aug 11, 2026 12:58pm (57d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-07-01 | $0.13 | — | — | — |
| 2026-01-05 | $0.12 | — | — | — |
| 2025-07-01 | $0.12 | — | — | — |
| 2025-01-03 | $0.11 | — | — | — |
| 2024-07-01 | $0.11 | — | — | — |
| 2024-01-03 | $0.10 | — | — | — |
| 2023-06-30 | $0.10 | — | — | — |
| 2023-01-04 | $0.10 | — | — | — |
| 2022-06-30 | $0.09 | — | — | — |
| 2022-01-05 | $0.09 | — | — | — |
| 2021-06-30 | $0.09 | — | — | — |
| 2021-01-06 | $0.08 | — | — | — |
| 2020-06-30 | $0.08 | — | — | — |
| 2020-01-08 | $0.08 | — | — | — |
| 2019-06-28 | $0.07 | — | — | — |
| 2019-01-02 | $0.07 | — | — | — |
| 2018-07-10 | $0.06 | — | — | — |
| 2018-01-02 | $0.03 | — | — | — |
| 2017-06-30 | $0.03 | — | — | — |
| 2016-12-30 | $0.02 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Computed 2026-10-01 02:00A +1σ run of quarters pays -62%; a −1σ run costs 80%. Ratio -0.8:1 (μ 21.7%, σ 9.1% , 16 pairs).
Older method (repeat-worst-quarter): -0.6 : 1
| Case | Growth | Margin | Fair value | vs price ($374.67) |
|---|---|---|---|---|
| Bull — recovery | +41% | 18.8% | $197.27 | -47% |
| Base — stabilizes | +28% | 16.4% | $119.23 | -68% |
| Bear — keeps slipping | +14% | 13.9% | $69.13 | -82% |
| Stress — last quarter repeats | +14% | 16.4% | $81.32 | -78% |
| Upside — a +1σ run of quarters (v2) | +31% | 18.0% | $142.26 | -62% |
| Stress — a −1σ run of quarters (v2) | +13% | 16.4% | $76.81 | -80% |
Narrative Economics
market-narrative step).
Growth Outlook
Analyzed 2026-08-17 16:17The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.
Claude Reading
The raw quarterly cadence is genuinely impressive and complicates the "overvalued" call. Revenue climbed from $992M (Jul-24) to $1.38B (Apr-26) — that's 39% growth over seven quarters with net margin expanding from 13.8% to 17.0%. The most recent print showed 25% YoY revenue growth and net income of $233.8M vs $136.6M — a 71% earnings jump. The "decelerating" tag in secondary signals is wrong on the tape: Q2'26 accelerated meaningfully off Q1'26's $1.18B. FCF conversion is exceptional ($861M FCF on $690M NI = 125%), debt is a rounding error ($3.4M against $4.85B equity), and ROIC of 18.3% on a business that compounds via bolt-on M&A is exactly the setup that justifies a premium — the question is how much.
That said, 76x trailing P/E and 42x EV/EBITDA are not defensible on any normal DCF, and the synthesis fair value of $178 is directionally right even if I'd argue it undershoots. Let me steelman higher: assume FY26 earnings run-rate off the last four quarters is ~$790M (annualizing the recent trajectory yields closer to $900M), grow 18% annually for five years to ~$1.8B, apply a generous 35x exit multiple (still a premium to peers like TDG), discount at 9% — you get roughly $220-240 fair value, still 35-40% below spot. The gap to $375 requires believing HEI compounds earnings at 20%+ for a decade AND retains a 40x+ multiple at the end. That's a possible outcome, not a base case. The synthesis is right that this is priced for perfection; the narrative layer's "50-60% is story" framing feels about right.
The contrarian pushback the models underweight: HEI's aftermarket parts business (Flight Support Group) has genuine pricing power that doesn't show up in typical DCF discount rates — PMA parts are effectively regulated micro-monopolies with 20-year annuities, and the family-run capital allocation record (Mendelson family) has delivered 20%+ IRRs on acquisitions for three decades. If you handicap that the M&A machine keeps working and defense/aerospace stay structurally strong post-Ukraine/Taiwan-anxiety spending resets, the intrinsic multiple probably deserves to be in the 45-55x range, not 25-30x. That would land fair value closer to $260-290. Still below $375, but the discount is 25%, not 52%. Where the models are most exposed to being wrong: assuming HEI's compounding rate reverts to industrial averages. It might not.
Where the data is thin: no insider activity provided, no segment split between Flight Support (aftermarket/commercial) and Electronic Technologies (defense), and the annual metrics tag on P/E suggests trailing figures that don't reflect the Q2'26 acceleration — forward P/E is probably closer to 55-60x. The "Macro Headwinds" signal contradicts the actual print, which shows accelerating growth into a supposedly weakening macro. Either HEI is genuinely decoupled (plausible given aftermarket recurring revenue) or Q2'26 pulled forward demand. I'd want the Q3 print before adding, and I'd want to see if the margin expansion to 17% is sustainable or a one-quarter mix benefit. My verdict: I partially agree with the synthesis that HEI is overvalued, but $178 fair value is too pessimistic — it ignores the demonstrated compounding rate and moat quality. Real fair value is $250-280. Not a short, not a buy here, but a name to accumulate 20-30% lower or on a clean earnings miss.
GPT Reading
The raw numbers say HEICO is an exceptional business and a difficult stock. On fundamentals alone, the operating machine is hard to criticize: annual revenue has scaled from $1.87B in 2021 to $4.49B in 2025, a 2.4x increase in four years, while net income rose from $304M to $690M. That is not just top-line expansion; operating margin moved from 21.0% in 2021 to 22.7% in 2025, gross margin from 38.9% to 39.8%, and free cash flow reached $861M against $690M of net income, which is unusually clean conversion for an industrial. The balance sheet is absurdly conservative, with only $3.4M of debt and $218M of cash, so this is effectively ungeared equity in a business generating high-teens ROIC and over $900M of operating cash flow. The quarterly sequence is even stronger than the annual view: revenue went from $992M in July 2024 to $1.38B in April 2026, while net margin expanded from 13.8% to 17.0%. That kind of simultaneous growth and margin expansion usually deserves a premium.
But the stock is priced for a continuation of something close to perfection. At $374.67 and a $52.4B market cap, investors are paying roughly 11.8x trailing sales, 76x earnings, and 42.7x EV/EBITDA for an aerospace and defense components company, not a software platform. Even if I annualize the most recent quarter’s $233.8M of net income to around $935M, the stock is still about 56x a run-rate earnings base. Likewise, annualizing the latest quarter’s revenue gets you roughly $5.5B, which still leaves the stock near 9.5x forward-ish sales. Those are elite multiples usually reserved for businesses with either much higher incremental margins, much larger TAM expansion, or clearer network effects than HEICO has. The core contradiction in the model outputs is that some of the language treats HEICO like a mature earner with durable compounding, which is directionally right, but the market is not valuing it like a mature earner at all; it is valuing it like a near-frictionless compounder that can sustain 20%+ growth and premium margins for many years without cyclical interruption. For an industrial tied to aviation utilization, defense budgets, and acquisition execution, that is too generous.
What stands out most to me is that the quality is real enough to tempt analysts into excusing the valuation. This is not a low-quality roll-up hiding behind adjusted EBITDA. The company is producing real earnings, real cash flow, and rising margins, and the near-zero leverage gives management enormous optionality. That said, the current price already capitalizes a lot of future M&A success and a lot of resilience. If HEICO earns roughly $0.9B to $1.0B within the next year and compounds earnings at, say, 15-18% for several years, the current multiple could eventually be “grown into,” but buyers at $375 are accepting years of execution risk with little valuation protection. My read is simple: this is a great company where the stock has become the weak link. I would not short a franchise this strong, but I also would not underwrite fresh capital here unless I believed normalized earnings power can exceed $1.2B fairly soon, because that is the kind of path required to make today’s price look merely reasonable rather than stretched.
The strongest case against my view is that HEICO has repeatedly earned the right to look expensive. The recent quarterly trajectory is not mild growth; it is acceleration. Revenue was up about 16% year over year in the latest quarter, but net income grew nearly 49% versus the $156.8M reported in the comparable quarter a year earlier, and net margin stepped up from 14.3% to 17.0%. If that margin profile holds, 2025 may understate the earnings base materially. A bull can also point out that return metrics remain strong despite a huge equity base, with ROIC at 18.4%, and that the balance sheet leaves room for acquisition-led EPS accretion without stressing the business. In that framework, a high multiple is not irrational but a rational tax investors pay for durability, scarcity, and management trust. I weigh that evidence differently because even outstanding companies can be bad stocks at the wrong entry price, and the multiple here leaves too little room for any pause in civil aerospace demand, any defense program hiccup, or simply a re-rating of long-duration equities.
What would change my mind is not another quarter of “good” results but evidence that HEICO is moving into a meaningfully higher earnings plateau than the market already discounts. Specifically, if quarterly revenue sustains above $1.35B and net margin stays at 16.5-17.0% or better for several quarters, that would imply annualized net income approaching or exceeding $950M with more confidence. I would also revisit my stance if management deploys the balance sheet into a large, clearly accretive acquisition without sacrificing returns, or if the stock corrected materially into the high-$200s while operations remained intact. Absent that, I see a premium business priced at an ultra-premium level.
Grok Reading
The raw numbers describe a genuine high-quality compounder that has executed nearly flawlessly, not a story stock inventing growth. Revenue scaled from $1.87B in FY2021 to $4.49B in FY2025, a 22.9% CAGR, while net income climbed from $304M to $690M and free cash flow hit $861M against only $73M of capex. The latest quarter accelerated again—$1.38B revenue and $234M net income at a 17% margin—extending a multi-year pattern of operating leverage that has lifted annual operating margin to 22.7% and ROIC to 18.4%. The balance sheet is a fortress: $3.4M of total debt against $4.85B of equity and $218M of cash, so virtually every dollar of the $934M operating cash flow is available for the acquisition engine that has defined the model. That combination of niche aerospace aftermarket positions, defense electronics, and serial accretive M&A is real and has produced earnings and FCF CAGRs of 31% and 47%.
What the same numbers refuse to support is a 76x trailing P/E, 12x sales, and 43x EV/EBITDA at a $52B enterprise value. FY2025 net income of $690M and FCF of $861M imply an earnings yield under 1.4% and an FCF yield of roughly 1.6%. Even granting another year of mid-teens-to-20% growth, the forward multiple remains in the mid-50s to low-60s—levels that already embed perpetual mid-teens compounding plus continued margin expansion plus flawless M&A deployment. Annual revenue growth has already decelerated from the 30%+ rates of FY2023–24 to 16% in FY2025, and the secondary signal flags a decelerating quarterly trend. At these prices the market is not paying for the business that exists; it is paying for an uninterrupted decade of TransDigm-like durability with better visibility, and the 50–60% narrative premium flagged in the briefing is visible in every multiple.
The strongest counter-argument is straightforward and data-backed: businesses that compound free cash flow at nearly 50% for half a decade with zero leverage and high switching-cost moats routinely confound traditional DCF anchors, and the $178 signal-adjusted fair value may simply be using too low a terminal growth or too high a discount rate for a company whose aftermarket and defense niches have historically proven counter-cyclical and certification-protected. A bull can also note that the most recent quarter’s 25% year-on-year revenue jump and 17% net margin show the operating leverage thesis is still intact, and that a pristine balance sheet means dilution or distress risk is near zero—so patient capital can still earn mid-teens IRRs if earnings power triples over five to seven years even with multiple compression. I weigh this less heavily because the deceleration in the organic growth rate is already visible, ROIC of 18% is excellent for an industrial but not scarce enough to justify 76x, and the macro-headwinds flag plus concentrated exposure to commercial aerospace cycles and defense budgets create asymmetric downside if either falters. The quality is not in dispute; the price of that quality is.
I would reverse to a neutral or constructive stance if the next two reported quarters re-accelerate organic revenue growth sustainably above 20% while holding or expanding the 17% net margin, or if a material acquisition lands that is immediately accretive enough to pull the forward P/E below 45x on updated consensus. A clear defense-budget upcycle that lifts the electronics segment faster than commercial aftermarket softens would also narrow the gap. Absent those, the stock is priced for perfection that the decelerating top-line already begins to question.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Revenue grew from $1.87B in 2021 to $4.49B in 2025, a 24% CAGR, while gross margin held a tight band of 38.9-39.8% and operating margin expanded from 21.1% to 22.7%. Net income more than doubled from $304M to $690M and free cash flow tracks earnings closely ($861M FCF vs $690M net income in 2025, a 125% conversion), which is a strong tell on earnings integrity - the reported profits are cash-real, not accrual-inflated. Diluted share count crept from 137.9M to 140.8M over five years, roughly 0.4% annualized dilution, so per-share value accrues to owners rather than being siphoned to stock comp. FCF per share went from ~$2.96 to ~$6.12, more than doubling. The combination of scaling revenue, expanding margins, superb cash conversion, and disciplined share count is what a well-run aerospace aftermarket franchise looks like. Without balance sheet detail I cannot confirm leverage/liquidity, but the operating engine itself is running clean.
Verify before trusting this (6)
- Net debt, interest coverage, and debt maturity ladder from the latest 10-K given HEI's acquisition-driven history
- Organic vs acquired revenue split - how much of the 24% CAGR is same-store growth
- Goodwill and intangibles as a percentage of assets and any impairment history
- Stock-based compensation as a percentage of revenue and FCF (dilution has been contained but true cost of SBC needs confirmation)
- Customer and program concentration in the aftermarket segment
- Working capital dynamics - inventory build vs revenue growth
The composite fair value lands at $139.31 and the signal-adjusted FV at $178.07 versus a $374.67 price - implied downside of 52% to 62% on the e2e math. Even the most generous input, the anchored-PE at $272.34, still sits 27% below spot, while the DCF ($118.10) and EPV floor ($48.69) suggest the market is capitalizing not just current earnings power but decades of pristine compounding. I discount the EPV as a true floor (aftermarket franchises deserve a premium above no-growth earnings) and treat the anchored-PE as the most relevant read given the Fortress quality grade.
Verify before trusting this (5)
- Organic vs acquired growth split in latest 10-Q - is the aftermarket engine still compounding without M&A?
- Defense budget commentary and FMS backlog trends on latest call
- Incremental margin trajectory - any signs of mix-driven compression
- Cash acquisition multiples paid in recent tuck-ins (are they still accretive?)
- Any pension/lease/off-balance-sheet items that would lower the deserved equity value
The tape is mildly risk-on (VIX 14, S&P near highs) and HEI's 1.05 beta means it participates cleanly on up days without being punished on down days. More importantly, the active narrative on this name - platform-monopoly, strong intensity, durable, medium cult - is exactly the kind of story that gets rewarded in a calm, risk-on regime: aerospace aftermarket dominance, certification moats, serial-acquirer flywheel. That story is doing the heavy lifting on the tape and is still intact. News flow is quiet but supportive - growth-investor framing, cash-producer buy lists, sector-relative performance pieces - nothing narrative-cracking. Momentum is strong_positive on a multi-year basis, though the recent 16% vs 22% long-term deceleration is a subtle amber light that could feed the bear thesis if defense spending or M&A cadence wobbles. The lone real headwind is macro: 10y at 4.63% and market PE 26 make richly-valued long-duration compounders like HEI (trading at ~2x DCF anchor) structurally exposed to any rate scare or growth-scare rotation. Net: a persistent, moderate tailwind from narrative + tape, with a latent valuation-sensitivity risk that isn't currently being pressed.
Verify before trusting this (4)
- Whether recent-vs-long-term momentum gap widens into next earnings - would give bears their first real hook
- Defense budget headlines or prime-contractor consolidation news that could pressure the aftermarket monopoly story
- Any move in the 10y toward 5% - would disproportionately pressure premium-multiple compounders like HEI
- M&A cadence - the serial-acquirer story needs continued deals to justify the accretion premium
The world is short of new aircraft and long of old ones. Every year OEM deliveries under-run plan, the installed fleet ages and the aftermarket — parts, repair, PMA alternatives — captures spend that would otherwise have gone into new metal. Airlines under cost pressure are structurally more willing to accept certified PMA and third-party repair, which widens HEICO's addressable share of a growing pool. In parallel, Western defense budgets are in a replenishment phase favouring electronics, sensors and munitions content over big platforms — exactly HEICO's slice. The offsets are macro (higher long rates raise the cost of the acquisition engine) and supply-chain/labour constraints on capacity to convert demand into shipments. Net: the structural wind is behind this business for several years, with the debate being rate of compounding, not direction.
When we made this prediction on Aug 16, 2026, HEI was $374.67. We expect it to be $352.00 by Feb 2027, and we consider it great value under $230.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 16, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.