HEICO Corp. is a designer and manufacturer of aerospace, defense and specialty electronics components and repair services, presenting a profile of above‑average per‑share growth and strong cash generation alongside elevated market multiples.
The company’s per‑share expansion has been notable: Revenue per share has risen to $34.83 (most recent) with revenue‑per‑share growth accelerating to 43.1% (period end 2024‑07‑31), while diluted EPS reached $4.90 (most recent) with EPS growth of 34.3% (period end 2025‑10‑31) — see EPS Diluted & Revenue per Share and Revenue & EPS Growth. Operational cash generation is another strength: trailing‑12‑month operating cash flow was $934.3M versus trailing net income of $690.4M, a cash‑earnings excess of $243.9M, and free cash flow margin stands at 19.2% — see Earnings Quality Analysis and Strategic Capital Allocation. Profitability at the product and net level remains healthy with a gross margin around 39.8% and a net margin near 15.4% (most recent) — see Profit Margin Trends — and the balance sheet shows liquidity with a current ratio of 2.83 and modest leverage (debt‑to‑equity ~0.50).
Areas of concern include valuation and episodic earnings volatility. The trailing P/E is elevated at about 64.9x (most recent), implying high growth expectations embedded in the share price — see Price-to-Earnings (PE) Ratio Trend. Capital deployment and cash flow timing warrant attention: investing cash flow turned more negative to -$731.7M (TTM), and recent quarterly results show lumpiness — the latest quarter reported revenue of $153.8M and net income of $12.6M despite larger TTM aggregates — see Revenue & Net Income and Strategic Capital Allocation.
Key fundamental metrics to watch going forward include sequential revenue and net income trends and per‑share growth metrics (Revenue & Net Income, EPS Diluted & Revenue per Share), the gap between operating cash flow and net income and free cash flow margin (Earnings Quality Analysis), changes in investing outflows and financing cash flow (Strategic Capital Allocation), sustained margin levels (Profit Margin Trends), return on equity (currently 14.2% TTM; see Return on Equity (ROE)), and the trajectory of the P/E multiple (Price-to-Earnings (PE) Ratio Trend).
The foundation of business quality and long-term value creation
HEICO CORP’s revenue shows a multi-year upward shift from the sub-$500M quarterly range in 2017–2019 to sustained billion-dollar quarters beginning in 2020. Revenue peaked in the dataset at $1.38B for the period ending 2026-04-30, with several consecutive quarters above $1.0B through early 2026, before the most recent reported quarter showing $153.8M. Net income has been more variable: after mid‑single-digit to low‑hundreds of millions through 2018–2021, recent quarters include large net income prints (examples in the dataset include $356.3M for 2025-10-31 and entries of $233.8M and $250.3M for 2026-04-30), followed by a much smaller net income of $12.6M in the latest report.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Over the period May 2025 to Apr 2026, Heico Corp generates $4.91B in revenue. The waterfall below shows how revenue flows through various expense categories.
Period Information
Report Type: Annual (10-K)
Period: May 2025 to Apr 2026
Revenue composition by disclosure category for the latest period
- Design, manufacture and sale of FAA-approved jet engine and aircraft component replacement parts (PMA parts), sold as factory-new, new surplus, overhauled, repairable and as removed.
- Repair, overhaul and refurbishment services for jet engine and aircraft components, avionics, instruments, composites and flight surfaces.
- Provision of proprietary repairs approved by FAA-designated engineering representatives and/or owner/operators.
- Distribution of FAA-approved hydraulic, pneumatic, structural, interconnect, mechanical and electro-mechanical components for commercial, regional and general aviation markets.
- Manufacturing and sale of specialty and subcontract parts for aerospace and industrial OEMs and the U.S. government; manufacture of advanced niche components and complex composite assemblies for aviation, defense and space.
- Engineering, design and manufacture of thermal insulation blankets, removable/reusable insulation systems and expanded foil mesh for lightning strike protection.
- Overhaul of industrial pumps, motors and hydraulic units with focus on legacy systems for the U.S. Navy.
- Tight-tolerance machining, brazing, fabricating and welding services for aerospace, defense and other industrial applications.
- Manufacture and distribution of emergency descent devices, personnel and cargo parachute products, missile hardware and other defense-related products.
- Accessory component exchange services for airlines, regional operators, asset managers and MRO providers as an alternative to OEM spares services.
- Design, manufacture and sale of electro-optical infrared simulation, testing and calibration equipment.
- Design and manufacture of laser rangefinder receivers, photodetectors and related electro-optical products.
- Design and manufacture of power electronics: electrical power supplies, back-up/backup power supplies, power conversion products, capacitor charging power supplies, amplifiers, traveling wave tube amplifiers, microwave power modules, flash lamp and laser diode drivers, arc lamp power supplies and custom power supply designs.
- Manufacture of emergency locator transmission beacons and underwater locator beacons for aviation and marine applications.
- Design and manufacture of EMI/RFI shielding, transient protection filters and high-voltage interconnection devices, cable assemblies and harsh-environment connectors.
- Design and manufacture of memory products and specialty semiconductors, including three-dimensional microelectronic and stacked memory, SRAM and EEPROM products.
- Design and manufacture of RF and microwave products, transmitters, receivers, integrated assemblies, converters, filters and related subsystems for satellites, spacecraft and defense applications.
- Design and manufacture of wireless cabin control systems, in-cabin power and entertainment components, cockpit displays and other avionics components.
- Production of crashworthy and ballistically self-sealing auxiliary fuel systems, high performance active antennas and airborne antennas, nuclear radiation detectors, TSCM equipment, rugged embedded computing solutions, high-performance test sockets and adapters, Hi-Rel passive components and rotary joint assemblies.
- Provision of radiation assurance services and other technical services related to high-reliability electronic components and subsystems.
- Repair, overhaul and exchange services (FSG) represent repeatable, service-oriented revenue streams tied to maintenance cycles and component lifecycles; rotables are designed to be repaired or overhauled and reused multiple times.
- Parts categorized as rotable, repairable and expendable imply differing revenue patterns: rotables and repairables support recurring maintenance and overhaul activity; expendables support transactional, consumable sales.
- Factory-new, new surplus and overhauled parts are sold in ready-to-install condition (transactional), while parts in as-removed or repairable condition require inspection, testing and repair before return to service (service-driven/recurring).
- ETG product lines include both recurring service-oriented engagements (e.g., calibration, simulation, radiation assurance services) and transactional product sales of high-reliability components and assemblies.
Regulatory approvals from the Federal Aviation Administration (PMA approvals) and FAA-designated engineering representatives (DER approvals) are required to design, manufacture and sell non-OEM replacement parts; the PMA and DER processes are described as a prerequisite to market participation.
Customer reliance in some cases on the Company’s unique manufacturing capabilities and proprietary repair processes, which are primarily protected as trade secrets rather than by material patents, creates dependency for certain designed products.
Sales to government and defense customers are subject to export controls, trade compliance regimes and licensing requirements (ITAR, EAR, OFAC and similar laws), creating dependency on the ability to obtain required authorizations.
Supply chain dependencies include availability of raw materials such as high-temperature alloys, castings, forgings, pre-plated metals, electrical components and advanced composite materials from various vendors; the filing notes normal lead times and potential exposure to global price fluctuations and trade regulations.
Certification and conformance requirements: repair and overhaul operations must be performed by certified repair facilities and certified technicians under regulatory frameworks; loss or suspension of material authorizations or certifications could affect the ability to sell or install parts.
Dependence on key personnel with specialized technical, engineering and management expertise for product development, operations and regulatory navigation.
Exposure to risks associated with sales to foreign customers and operations in foreign jurisdictions, including geopolitical, regulatory, currency and export license risks.
Competitive pressure from OEMs and other service providers that may have greater resources, and the historical role of OEMs as primary sources of replacement parts, which affects market dynamics and competitive positioning.
Analyzing long-term margin stability and competitive positioning
HEICO CORP’s gross margin has been consistently in the high-30s over the period shown, rising gradually from the mid-30% range in the mid-2010s to the upper-30s by the most recent quarter. Recent gross-margin readings include 39.1% (2022-10-31), 39.2% (2023-01-31) and 39.8% (2025-10-31), indicating relatively stable product-level profitability.
Net profit margin moved from single digits in the early 2010s into the low-to-mid teens thereafter, peaking at 17.6% (2020-10-31) and showing mid-teen levels in recent quarters with 15.9% (2022-10-31), 13.6% (2023-10-31) and 15.4% (2025-10-31).
Operating-margin data are more sporadic and show notable variation: roughly 17–20% in the early years reported, a large spike to 138.9% on 2018-10-31, and a later elevated reading of 43.9% on 2022-10-31. Those operating-margin inflection points contrast with the steady gross-margin trend and the net margin’s consolidation in the mid-teens. The latest observed values are:
Understanding Profit Margins
Between May 2025 and Apr 2026, Heico Corp converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
HEICO CORP’s trailing‑12‑month operating cash flow and net income have both trended upward over the past several reported periods, with the acceleration most pronounced since the 2023‑10‑31 observation. Operating cash flow rose from $448.7M (2023‑10‑31) to $672.4M (2024‑10‑31) and then to $934.3M (2025‑10‑31). Net income climbed from $403.6M (2023‑10‑31) to $514.1M (2024‑10‑31) and then to $690.4M (2025‑10‑31), so operating cash flow has expanded faster than net income and the cash‑earnings gap has widened over the last two years.
The most recent TTM data show operating cash flow exceeding reported net income by $243.9M (934.3M vs. 690.4M), up from a gap of $158.3M at 2024‑10‑31. The most recent trailing twelve‑month operating cash flow was $934.3M and the most recent trailing twelve‑month net income was $690.4M.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
Trailing Twelve Months
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
HEICO CORP's trailing twelve-month Return on Equity has risen modestly over the last two reported years, moving from 11.3% at period end 2023-10-31 to 14.1% at 2024-10-31 and 14.2% at 2025-10-31. The most recent quarters show relative stability just above 14%, marking an uptick from the 2023 trough.
Over the longer history, ROE reached multi-year highs in 2014–2015 (peaking at 21.1% on 2015-01-31) and generally sat in the mid-to-high teens through much of the 2010s before the dip in 2023 and the subsequent recovery to the current mid-teens. The most recent trailing twelve-month ROE (period ending 2025-10-31) was 14.2%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
HEICO CORP's trailing twelve-month operating cash flow has risen steadily in recent reported periods, climbing from $448.7M (2023-10-31) to $672.4M (2024-10-31), then to $763.8M (2025-01-31) and most recently to $934.3M (2025-10-31). Over the same recent window, investing cash flow moved more negative, widening from -$293.2M (2024-10-31) to -$731.7M (2025-10-31), indicating larger net investing outflows in the latest TTM reading.
Financing cash flow has been volatile: large positive inflows were recorded in 2023–mid‑2024 (e.g., $2.07B on 2023-10-31, $1.54B on 2024-04-30, $916.9M on 2024-07-31) before shifting to net outflows of -$389.4M (2024-10-31) and -$150.7M (2025-10-31), with a modest positive TTM balance of $68.2M in the latest 2026-01-31 report. The most recent trailing twelve-month values were: Operating Cash Flow $934.3M; Investing Cash Flow -$731.7M; Financing Cash Flow $68.2M.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Trailing Twelve Months
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
HEICO CORP's trailing twelve-month P/E has trended higher over the past decade, moving from the low–30s in the early 2010s to a mid–30s/40s range by 2013–2014, rising to the low–30s again in 2015–2016, and then increasing through 2018–2019 into the high–40s/50s. Notable inflection points include the rise from about 31x in 2015–2016 to 45.6x in 2018 and a further move to 53.0x in 2019, followed by a dip to 48.8x in 2020 and renewed increases thereafter.
In the most recent quarters the P/E has been elevated: 55.3x at period end 2023–10–31, 67.2x at 2024–10–31, and a slight decline to 64.9x at 2025–10–31. The most recent Price-to-Earnings ratio was 64.9x as of period end 2025–10–31.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.