Value
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.0 |
| P/S | 3.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.4 |
| PEG | 3.7 |
| Analyst target | 5.0 |
- ▸Forward P/E: 49.0x
- ▸PEG: 3.07
- ▸Expensive valuation
HEI · Why this verdict
Why Heico (HEI) 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 operates a genuinely high-quality industrial franchise with a perfect financial health score, best-in-class peer margins, and four consecutive earnings beats averaging approximately 12% positive surprise, but the stock is priced at roughly 49 times forward earnings with only 3.4% upside to consensus — an unfavorable 0.49-to-1 reward-to-risk means the business merits holding but the current setup does not support adding.
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, representing a high-quality, compounding industrial franchise with strong execution. Bull case | Revenue growth sustains above 20% year-over-year and operating margins hold at or above 16% over the next 4 quarters. | →Stable |
| CounterThe Flight Support Group accounts for approximately 70% of total revenue, concentrating growth and quality in a single segment — any demand disruption there would disproportionately impact overall results. | ||
Four consecutive quarterly earnings beats with an average positive surprise of approximately 12.4% — including a most-recent-quarter beat of nearly 25% — demonstrate a management discipline of delivering above analyst expectations across multiple reporting periods. Earnings | The beat streak extends to 6 or more consecutive quarters with average positive surprises remaining above 8%. | →Stable |
| CounterBeat streaks of this magnitude tend to attract upward analyst estimate revisions, progressively raising the bar and making future beats harder to achieve at comparable magnitudes. | ||
A forward price-to-earnings of approximately 49 times and a price-to-earnings-growth ratio of 3.08 reflect a premium multiple that leaves just 3.4% of price appreciation to the analyst consensus target, producing an unfavorable 0.49-to-1 reward-to-risk that does not compensate for the implied downside. Valuation breakdown | The forward earnings multiple compresses below 35 times as earnings growth accelerates, or analyst targets are raised enough to provide more than 15% upside from current levels. | →Stable |
| CounterA sustained 25% growth trajectory combined with the highest financial health score in the peer group can support premium multiples for extended periods as long as execution remains consistent. | ||
A confirmed death cross pattern has triggered a hard technical block, with mixed chart signals preventing a clear continuation pattern from forming — the technical setup remains a constraint on near-term entry even with price above the 200-day moving average. Engine gate (failed) | The death cross resolves within 3 months, the 50-day moving average crosses back above the 200-day, and momentum indicators confirm a clear uptrend resumption. | →Stable |
| CounterPrice is still trading above its 200-day moving average and volume accumulation (rising OBV) signals that buying interest persists beneath the surface of the cross pattern. | ||
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, representing a high-quality, compounding industrial franchise with strong execution.
→StableBull case
- Expectation
- Revenue growth sustains above 20% year-over-year and operating margins hold at or above 16% over the next 4 quarters.
CounterThe Flight Support Group accounts for approximately 70% of total revenue, concentrating growth and quality in a single segment — any demand disruption there would disproportionately impact overall results.
Four consecutive quarterly earnings beats with an average positive surprise of approximately 12.4% — including a most-recent-quarter beat of nearly 25% — demonstrate a management discipline of delivering above analyst expectations across multiple reporting periods.
→StableEarnings
- Expectation
- The beat streak extends to 6 or more consecutive quarters with average positive surprises remaining above 8%.
CounterBeat streaks of this magnitude tend to attract upward analyst estimate revisions, progressively raising the bar and making future beats harder to achieve at comparable magnitudes.
A forward price-to-earnings of approximately 49 times and a price-to-earnings-growth ratio of 3.08 reflect a premium multiple that leaves just 3.4% of price appreciation to the analyst consensus target, producing an unfavorable 0.49-to-1 reward-to-risk that does not compensate for the implied downside.
→StableValuation breakdown
- Expectation
- The forward earnings multiple compresses below 35 times as earnings growth accelerates, or analyst targets are raised enough to provide more than 15% upside from current levels.
CounterA sustained 25% growth trajectory combined with the highest financial health score in the peer group can support premium multiples for extended periods as long as execution remains consistent.
A confirmed death cross pattern has triggered a hard technical block, with mixed chart signals preventing a clear continuation pattern from forming — the technical setup remains a constraint on near-term entry even with price above the 200-day moving average.
→StableEngine gate (failed)
- Expectation
- The death cross resolves within 3 months, the 50-day moving average crosses back above the 200-day, and momentum indicators confirm a clear uptrend resumption.
CounterPrice is still trading above its 200-day moving average and volume accumulation (rising OBV) signals that buying interest persists beneath the surface of the cross pattern.
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
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 6.7 |
| erm sentiment | 5.0 |
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.3 |
- ▸Negligible insider selling — $471,150 (0.001% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.6 |
| quality rank | 7.9 |
| growth rank | 6.7 |
- ▸Best-in-class margins
Technical
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.8 |
| support resistance | 1.7 |
| 52w position | 9.1 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.2 |
| days to cover | 10.0 |
| volatility | 4.8 |
| put call | 0.0 |
| implied vol | 7.1 |
| max pain risk | 3.0 |
| beta | 6.9 |
| debt equity | 8.1 |
- ▸Elevated put/call: 32.91
- ▸Above max pain $230
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.7 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 7.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:61d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.05
Upside
+0.5%
Downside
8.9%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
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: MOMENTUM:4.9>=4.5. Top dim: Growth at 9.4; weakest: Value at 3.0. No conviction either direction.
The strongest dimensions are Growth at 9.4, Quality at 7.4, and Catalyst at 6.8; the weakest are Value at 3.0, Technical at 3.9, and Peer rank at 4.3. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.05 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, representing a high-quality, compounding industrial franchise with strong execution.
Trip ifRevenue growth falls below 15% year-over-year for 2 consecutive quarters.
- P2Four consecutive quarterly earnings beats with an average positive surprise of approximately 12.4% — including a most-recent-quarter beat of nearly 25% — demonstrate a management discipline of delivering above analyst expectations across multiple reporting periods.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3A forward price-to-earnings of approximately 49 times and a price-to-earnings-growth ratio of 3.08 reflect a premium multiple that leaves just 3.4% of price appreciation to the analyst consensus target, producing an unfavorable 0.49-to-1 reward-to-risk that does not compensate for the implied downside.
Trip ifAnalyst consensus price target rises above $400, expanding upside from current levels beyond 15%.
- P4A confirmed death cross pattern has triggered a hard technical block, with mixed chart signals preventing a clear continuation pattern from forming — the technical setup remains a constraint on near-term entry even with price above the 200-day moving average.
Trip ifThe 50-day moving average crosses back above the 200-day moving average and holds for 4 consecutive weeks.