What Happened?
Shares of aerospace and defense company HEICO (NSYE:HEI) jumped 6.5% in the morning session after the company reported impressive first quarter 2025 financial results, which beat analysts' revenue and EBITDA expectations. Sales rose 15% thanks to higher orders for flight parts and aerospace electronics, especially in the company's Flight Support and Electronic Technologies groups. Zooming out, we think this was a solid print.
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What The Market Is Telling Us
HEICO’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 9.8% on the news that the company reported weak third-quarter 2024 earnings. Its revenue missed, and its adjusted operating income fell short of Wall Street's estimates.
Also, the company's debt profile continued to leave little room for error, given the negative net cash position, with management highlighting a total debt-to-net income ratio of 4.34x.
In addition, the top-line growth continued to decelerate, with revenue up 8.2% year on year during the quarter, a sharp drop from the double-digit growth recorded in the previous quarters, presenting more reasons for investors to be worried. Overall, this was a weaker quarter.
HEICO is up 23.3% since the beginning of the year, and at $292.55 per share, has set a new 52-week high. Investors who bought $1,000 worth of HEICO’s shares 5 years ago would now be looking at an investment worth $2,815.
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