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Heico Corp HEI

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Heico Drove Substantial Incremental Profits on Improved Flight Support Group Revenue During Q1

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Narrow-moat rated Heico reported a solid first fiscal quarter of 2021. The year-over-year declines in the company’s flight support group as the pandemic continues to depress overall air traffic were partially offset by solid growth in the company’s electronic technologies group. Heico’s earnings per share of $0.51 beat FactSet consensus by 6.1% and the company posted a revenue decline of about 17.5% that was reasonably consistent with consensus estimates. We’re maintaining our $90 fair value estimate as we have marginally increased our near-term profitability assumptions and decreased our revenue assumptions.

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Company Profile

Business Description

Heico is an aerospace and defense supplier that primarily 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 parts for aircraft, primarily within the engine. In the defense market, the company produces niche subcomponents used in targeting technology as well as simulation equipment, among other things. The company is highly acquisitive, focusing on companies that are generating strong cash flow with the potential for sustainable growth.

3000 Taft Street
Hollywood, FL, 33021
T +1 954 987-4000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Jan 31, 2021
Fiscal Year End Oct 31, 2020
Stock Type Cyclical
Employees 5,200