Heico (NYSE:HEI) Shares Gap Up After Earnings Beat

Key Points

• Heico beat quarterly expectations, reporting earnings per share of $1.67 versus the $1.51 consensus and revenue of $1.41 billion versus $1.35 billion expected. Revenue increased 23.1% year over year, while EPS rose from $1.26.
• Shares initially gapped higher from a prior close of $351.05 to an opening price of $370 following the results, though they later traded near $355.29.
• Analysts maintain a generally positive outlook, with a consensus “Moderate Buy” rating and an average price target of $379.56. However, Heico’s elevated valuation— including a P/E ratio above 60—remains a key risk if growth slows.

Heico Corporation (NYSE:HEI - Get Free Report)'s stock price gapped up prior to trading on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $351.05, but opened at $370.00. Heico shares last traded at $355.2850, with a volume of 164,143 shares traded.

The aerospace company reported $1.67 earnings per share for the quarter, beating analysts' consensus estimates of $1.51 by $0.16. The firm had revenue of $1.41 billion during the quarter, compared to the consensus estimate of $1.35 billion. Heico had a return on equity of 17.52% and a net margin of 16.08%.The business's revenue was up 23.1% compared to the same quarter last year. During the same period last year, the company earned $1.26 earnings per share.

Heico Announces Dividend

The company also recently announced a dividend, which was paid on Wednesday, July 15th. Investors of record on Wednesday, July 1st were issued a dividend of $0.13 per share. This represents a yield of 7.0%. The ex-dividend date was Wednesday, July 1st. Heico's payout ratio is presently 4.64%.

Key Stories Impacting Heico

Here are the key news stories impacting Heico this week:

• Positive Sentiment: Quarterly earnings and revenue exceeded expectations. HEI reported adjusted EPS of $1.67, ahead of the $1.51 consensus estimate, while revenue reached $1.41 billion versus expectations of $1.35 billion. EPS increased from $1.26 a year earlier, and revenue rose 23.1% year over year. Heico Corporation Q3 Earnings and Revenues Beat Estimates
• Positive Sentiment: Record profitability underscored strong operating momentum. Third-quarter net income climbed 33% to a record $235.4 million, while operating income increased 34% and net sales rose 23%. Organic consolidated sales growth reached 14%, suggesting the performance was not driven solely by acquisitions. HEICO Reports Record Net Income, Operating Income and Net Sales
• Positive Sentiment: Aerospace and defense demand remained favorable. Coverage linked the results to increased demand across HEI’s aerospace and defense businesses, with acquisitions also contributing to revenue growth. The results support the company’s exposure to aftermarket aerospace activity and defense spending. Heico Beats Estimates on Aerospace and Defense Demand
• Neutral Sentiment: Valuation and growth expectations remain important risks. HEI trades near its 12-month high with a P/E ratio above 60, leaving less room for disappointing results. Investors may focus on whether aerospace demand, organic growth and acquisition benefits can sustain the company’s elevated valuation.

Wall Street Analysts Forecast Growth

Several research analysts have recently weighed in on the stock. Susquehanna boosted their price objective on shares of Heico from $321.00 to $365.00 and gave the stock a "neutral" rating in a research note on Friday, May 29th. Wells Fargo & Company set a $350.00 price target on Heico and gave the stock an "equal weight" rating in a report on Monday, June 1st. UBS Group reissued a "neutral" rating and set a $390.00 price target (up from $371.00) on shares of Heico in a research report on Monday, June 1st. Royal Bank Of Canada upped their price objective on Heico from $375.00 to $390.00 and gave the company an "outperform" rating in a research note on Friday, May 29th. Finally, Truist Financial raised Heico to a "strong-buy" rating in a research report on Friday, May 1st. Three investment analysts have rated the stock with a Strong Buy rating, ten have assigned a Buy rating and four have given a Hold rating to the company. Based on data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $379.56.

Insiders Place Their Bets

In other Heico news, CAO Bradley K. Rowen sold 1,326 shares of the stock in a transaction on Wednesday, June 10th. The stock was sold at an average price of $241.63, for a total transaction of $320,401.38. The transaction was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. 4.86% of the stock is owned by insiders.

Hedge Funds Weigh In On Heico

Institutional investors and hedge funds have recently modified their holdings of the business. Maridea Wealth Management LLC bought a new stake in shares of Heico during the 2nd quarter valued at approximately $1,128,000. Indivisible Partners acquired a new position in Heico during the 4th quarter worth approximately $5,883,000. Silvant Capital Management LLC bought a new position in Heico in the 2nd quarter valued at approximately $9,385,000. PFA Pension Forsikringsaktieselskab acquired a new stake in Heico in the fourth quarter valued at approximately $8,395,000. Finally, SBI Okasan Asset Management Co.Ltd. bought a new stake in shares of Heico during the second quarter worth $1,262,000. 27.12% of the stock is currently owned by institutional investors and hedge funds.

Heico Stock Up 1.1%

The firm's fifty day moving average price is $353.68 and its 200-day moving average price is $321.20. The company has a market capitalization of $49.58 billion, a price-to-earnings ratio of 63.42, a P/E/G ratio of 3.56 and a beta of 1.04. The company has a debt-to-equity ratio of 0.53, a current ratio of 2.92 and a quick ratio of 1.36.

Heico Company Profile

HEICO Corporation is an aerospace, defense and electronics company that designs, manufactures, and sells a range of products and provides repair and aftermarket services. Headquartered in Hollywood, Florida, HEICO supplies replacement components, repair services and engineered systems for commercial and business aviation, military and space markets as well as for selected industrial and medical customers. The company's offerings are focused on sustaining and improving the reliability and availability of complex equipment across its end markets.

HEICO operates through two principal business areas.

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