What Happened?

Shares of aerospace and defense company HEICO (NSYE:HEI) jumped 14.1% in the afternoon session after 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.

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What The Market Is Telling Us

HEICO’s shares are not very volatile and have only had a move 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 2 months ago when the stock dropped 9.8% on the news that the company reported weak third-quarter 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 8.9% since the beginning of the year, and at $258.33 per share, it is trading close to its 52-week high of $279.02 from November 2024. Investors who bought $1,000 worth of HEICO’s shares 5 years ago would now be looking at an investment worth $2,453.

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