A month has gone by since the last earnings report for Heico Corporation (HEI). Shares have lost about 3.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Heico due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Heico Corporation before we dive into how investors and analysts have reacted as of late.
HEICO’s Q3 Earnings Surpass Estimates, Sales Increase Y/Y
The company reported third-quarter fiscal 2025 earnings per share (EPS) of $1.26, which beat the Zacks Consensus Estimate of $1.12 by 12.5%. The bottom line also improved 29.9% from the prior-year quarter’s 97 cents. The year-over-year increase in the bottom line can be attributed to robust sales growth and higher operating income, as well as lower interest expenses from the prior-year quarter.
HEI’s Total Sales
The company’s net sales increased 15.7% year over year to $1.15 billion. The figure also beat the Zacks Consensus Estimate of $1.11 billion by 3.1%.
The year-over-year upside was driven by solid sales growth delivered by both its segments.
HEICO’s Operational Update
HEICO’s cost of sales jumped 14.5% year over year to $690.4 million.
The company’s selling, general and administrative (SG&A) expenses rose 11.2% to $192.1 million.
Interest expenses declined 13.8% to $31.7 million from $36.8 million in the prior-year quarter.
HEI’s Segmental Performance
Flight Support Group:Net sales from this segment surged 17.8% year over year to $802.7 million. This rise was driven by strong organic sales growth of 13% and the positive impact of its fiscal 2025 and 2024 acquisitions.
The segment’s operating income soared 29.1% year over year to $198.3 million. This increase was due to solid net sales growth and an improved gross profit margin.
Electronic Technologies Group: The segment’s net sales surged 10.5% to $355.9 million. This rise was driven by strong organic sales growth of 7% and the positive impact of its fiscal 2025 and 2024 acquisitions.
The segment’s operating income increased 6.9% year over year to $81 million. This rise was due to solid net sales growth and SG&A expense efficiencies realized from the net sales growth.
HEI’s Financial Details
As of July 31, 2025, HEI’s cash and cash equivalents totaled $261.9 million compared with $162.1 million as of Oct. 31, 2024.
Cash flow from operating activities was $638.9 million during the first nine months of fiscal 2025, reflecting a 36.9% rise from the prior-year period’s level.
HEICO reported a long-term debt (net of current maturities) of $2.44 billion as of July 31, 2025, up from $2.23 billion as of Oct. 31, 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
VGM Scores
At this time, Heico has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Heico has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Heico is part of the Zacks Aerospace - Defense Equipment industry. Over the past month, Mercury Systems (MRCY), a stock from the same industry, has gained 11.4%. The company reported its results for the quarter ended June 2025 more than a month ago.
Mercury Systems reported revenues of $273.11 million in the last reported quarter, representing a year-over-year change of +9.9%. EPS of $0.47 for the same period compares with $0.23 a year ago.
For the current quarter, Mercury Systems is expected to post earnings of $0.08 per share, indicating a change of +100% from the year-ago quarter. The Zacks Consensus Estimate has changed -33.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Mercury Systems. Also, the stock has a VGM Score of B.
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Heico Corporation (HEI): Free Stock Analysis Report Mercury Systems Inc (MRCY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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