HEICO (HEI) Stock Trades Down, Here Is Why

What Happened?

Shares of aerospace and defense company HEICO (NSYE:HEI) fell 12.2% in the afternoon session after it reported fourth-quarter 2025 earnings that, despite beating headline estimates, contained underlying weaknesses that concerned investors. 

While revenue grew 14.4% year-on-year to $1.18 billion, narrowly beating expectations, investors focused on several negative details in the report. The company's GAAP earnings per share of $1.35 only surpassed estimates due to what the company called "a discrete income tax benefit from stock option exercises;" without it, the company would have missed expectations. Furthermore, Adjusted EBITDA of $312 million fell short of Wall Street's consensus. Another key concern was a decline in cash generation, with the free cash flow margin dropping to 14% from 18% in the same quarter last year. The sharp stock decline suggested investors were more worried about the lower-quality earnings beat and weaker cash flow than the top-line growth.

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What Is The Market Telling Us

HEICO’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for HEICO and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 12 months ago when the stock gained 14.1% on the news that the company reported strong fourth-quarter results, with revenue, EBITDA, and EPS all surpassing expectations by significant margins. Sales grew 15% year-on-year, driven by strong organic demand in both the Flight Support and Electronic Technologies segments, along with contributions from recent acquisitions. Overall, this was a solid performance for the quarter.

HEICO is down 7.9% since the beginning of the year, and at $303.43 per share, it is trading 15.3% below its 52-week high of $358.04 from January 2026. Investors who bought $1,000 worth of HEICO’s shares 5 years ago would now be looking at an investment worth $2,412.

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