Value
3.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 2.8 |
| P/S | 5.5 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.0 |
| PEG | 4.2 |
- ▸Forward P/E: 57.1x
- ▸PEG: 2.25
- ▸Expensive valuation
HEI-A · Why this verdict
Why Heico (HEI-A) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Heico's Class A shares offer exposure to a high-quality, high-growth industrial franchise with favorable technical momentum and a 1.3-to-1 reward-to-risk in your favor — meaningful but short of the 1.5-to-1 preferred threshold — while the nearly 58-times forward earnings multiple and heavy product concentration in the Flight Support Group (approximately 70% of revenue) keep the asymmetry below the bar for a compelling new entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company delivers best-in-class margins relative to industry peers, a perfect nine-for-nine Piotroski financial health score, and approximately 25% year-over-year revenue growth, establishing the operating business as a high-quality, compounding industrial franchise. Bull case | Revenue growth sustains above 20% year-over-year and operating margins hold at or above 16% over the next 4 quarters. | →Stable |
| CounterApproximately 70% of revenue is generated by the Flight Support Group — a highly concentrated product exposure that creates an outsized single-segment dependency; deterioration in that segment's demand would disproportionately impact total results. | ||
The stock exhibits a momentum continuation setup with RSI at 62, a bullish MACD configuration, and trading above its 200-day moving average — technical signals that are constructive even as the death cross lingers in recovery. Momentum breakdown | Price sustains momentum and tests the analyst consensus target near $272 within 6 months, with RSI remaining between 50 and 70 throughout. | →Stable |
| CounterThe 200-day moving average slope is flat, not rising, and the death cross has not yet fully resolved — the trend re-assertion is incomplete, which may limit how far momentum can carry the price before the technical structure needs to rebuild. | ||
A forward price-to-earnings of approximately 58 times screens as expensive, and while the reward-to-risk of approximately 1.3-to-1 is favorable in direction, it falls short of the 1.5-to-1 threshold required for a compelling entry — the franchise quality is evident, but the price demands a significant premium. Valuation breakdown | Forward earnings growth causes the effective multiple to compress below 45 times within 12 months while the price appreciates toward the target, improving entry attractiveness. | →Stable |
| CounterA 25% revenue growth rate combined with the highest financial health score in the peer group provides a rational basis for premium pricing, and such multiples can persist for extended periods when execution is consistent. | ||
With approximately 70% of revenue generated by the Flight Support Group, the business carries meaningful product concentration risk — a demand disruption, contract loss, or regulatory change affecting that single segment would have an outsized impact on total revenue and earnings. Bear case | The Flight Support Group's share of total revenue declines below 65% as other segments grow faster, reducing single-segment dependency. | →Stable |
| CounterHigh concentration in a segment with strong positioning and consistent growth can reflect focused competitive advantage rather than fragility — diversification for its own sake may dilute rather than de-risk the franchise. | ||
The company delivers best-in-class margins relative to industry peers, a perfect nine-for-nine Piotroski financial health score, and approximately 25% year-over-year revenue growth, establishing the operating business as a high-quality, compounding industrial franchise.
→StableBull case
- Expectation
- Revenue growth sustains above 20% year-over-year and operating margins hold at or above 16% over the next 4 quarters.
CounterApproximately 70% of revenue is generated by the Flight Support Group — a highly concentrated product exposure that creates an outsized single-segment dependency; deterioration in that segment's demand would disproportionately impact total results.
The stock exhibits a momentum continuation setup with RSI at 62, a bullish MACD configuration, and trading above its 200-day moving average — technical signals that are constructive even as the death cross lingers in recovery.
→StableMomentum breakdown
- Expectation
- Price sustains momentum and tests the analyst consensus target near $272 within 6 months, with RSI remaining between 50 and 70 throughout.
CounterThe 200-day moving average slope is flat, not rising, and the death cross has not yet fully resolved — the trend re-assertion is incomplete, which may limit how far momentum can carry the price before the technical structure needs to rebuild.
A forward price-to-earnings of approximately 58 times screens as expensive, and while the reward-to-risk of approximately 1.3-to-1 is favorable in direction, it falls short of the 1.5-to-1 threshold required for a compelling entry — the franchise quality is evident, but the price demands a significant premium.
→StableValuation breakdown
- Expectation
- Forward earnings growth causes the effective multiple to compress below 45 times within 12 months while the price appreciates toward the target, improving entry attractiveness.
CounterA 25% revenue growth rate combined with the highest financial health score in the peer group provides a rational basis for premium pricing, and such multiples can persist for extended periods when execution is consistent.
With approximately 70% of revenue generated by the Flight Support Group, the business carries meaningful product concentration risk — a demand disruption, contract loss, or regulatory change affecting that single segment would have an outsized impact on total revenue and earnings.
→StableBear case
- Expectation
- The Flight Support Group's share of total revenue declines below 65% as other segments grow faster, reducing single-segment dependency.
CounterHigh concentration in a segment with strong positioning and consistent growth can reflect focused competitive advantage rather than fragility — diversification for its own sake may dilute rather than de-risk the franchise.
Per-dimension breakdown
Quality
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.7 |
| ROA | 5.5 |
| Gross margin | 4.0 |
| Op margin | 10.0 |
| Net margin | 8.0 |
| Current ratio | 9.8 |
| FCF quality | 6.5 |
| Moat | 6.9 |
| Piotroski F | 10.0 |
- ▸Strong margins: 16%
- ▸Strong Piotroski F-Score: 9/9
Growth
9.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.8 |
| EPS growth | 10.0 |
- ▸Strong growth: 25% YoY
Momentum
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 8.0 |
| Volume | 5.8 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.6 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 30%
Insider
5.0/10data confidence 50%Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.4 |
| quality rank | 7.9 |
| growth rank | 6.7 |
- ▸Best-in-class margins
Technical
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.9 |
| support resistance | 4.4 |
| 52w position | 7.6 |
| gap | 6.0 |
Risk (lower is worse)
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.6 |
| days to cover | 9.0 |
| volatility | 3.5 |
| put call | 10.0 |
| beta | 6.9 |
| debt equity | 8.1 |
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.0 |
| dividend safety | 5.2 |
- ▸Dividend: 10.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:62d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.1<4.5
- ASYMMETRY:1.4<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.45
Upside
+10.6%
Downside
7.3%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 54 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Growth at 9.4; weakest: Value at 3.0. No conviction either direction.
The strongest dimensions are Growth at 9.4, Risk (lower is worse) at 7.9, and Quality at 7.4; the weakest are Value at 3.0, Momentum at 4.1, and Peer rank at 4.7. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.45 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The company delivers best-in-class margins relative to industry peers, a perfect nine-for-nine Piotroski financial health score, and approximately 25% year-over-year revenue growth, establishing the operating business as a high-quality, compounding industrial franchise.
Trip ifRevenue growth falls below 15% year-over-year for 2 consecutive quarters.
- P2The stock exhibits a momentum continuation setup with RSI at 62, a bullish MACD configuration, and trading above its 200-day moving average — technical signals that are constructive even as the death cross lingers in recovery.
Trip ifRSI falls below 40 for 2 consecutive weeks, or price crosses below the 200-day moving average and holds there for 4 consecutive weeks.
- P3A forward price-to-earnings of approximately 58 times screens as expensive, and while the reward-to-risk of approximately 1.3-to-1 is favorable in direction, it falls short of the 1.5-to-1 threshold required for a compelling entry — the franchise quality is evident, but the price demands a significant premium.
Trip ifAnalyst consensus price target rises above $310, expanding upside from current levels beyond 20%.
- P4With approximately 70% of revenue generated by the Flight Support Group, the business carries meaningful product concentration risk — a demand disruption, contract loss, or regulatory change affecting that single segment would have an outsized impact on total revenue and earnings.
Trip ifFlight Support Group revenue share falls below 65% of total revenue for 2 consecutive fiscal quarters.