Hiko today
(As of 12/20/2024 at 05:45 PM ET)
- 52 week range
- $169.70
▼
$283.60
- Dividend yield
- 0.09%
- P/E ratio
- 70.07
- Price target
- $270.20
Defense stocks are on fire in 2024, with names like HEICO NYSE: Hello Gain more than 50% at the peak of the movement. Now, looking back, the question is whether this airline has been bought out or whether it’s time to fly the coop, sit on the sidelines, and wait for better prices. As the company grows organically, acquires businesses, generates cash flow, reduces debt, and is supported by global trends, this stock is likely to rise in the coming year. In this scenario, the question becomes which price points to target.
HEICO declines on mixed results, including wider margins and record profits
HEICO reported mixed Q4 results, but expectations were high, results were strong, and the positive outlook makes declining prices a potential buy signal for long-term investors. The company reported net revenue of $1.01 billion, up 7.9% compared to last year. Revenue beat the reported MarketBeat consensus by a modest $0.02 billion, about 190 basis points, offset by wider margin and expectations for sustainable growth in 2025.
HEICO stock forecast today
$270.20
13.08% upModerate purchase
Based on 10 analyst ratings
| High expectations | $285.00 |
|---|---|
| Average expectations | $270.20 |
| Low expectations | $245.00 |
HEICO stock forecast details
The company’s fourth-quarter and full-year revenue set a record high driven by continued strength in its business-focused aviation support group. The business has grown for the 17th consecutive quarter and is expected to grow in 2025 both organically and through acquisition. Aviation Support Group sales increased 15%, membership 12%, offset by a slight decline in the Electronic Technology Group. The electronic technology group is more sensitive to government spending, often leading to what the company described as “lumpy” results.
Margin is another area of strength primarily driven by the aviation support group. The company reported a 140 basis point improvement in consolidated operating margin, a 13% increase in EBITDA, a 15% increase in operating income, and a 35% increase in net income. Cash flow growth was also strong, growing 39%, and the net result was $0.99 in GAAP earnings, up $0.25 from a year ago and a penny above expectations despite a weak top line. The company did not provide specific guidance for next year but is optimistic about growth in both sectors and continued strength in FSG.
Heiko: Improving the balance sheet quarter by quarter
Important details from HEICO’s fourth-quarter results include an improving balance sheet. Highlights include a decrease in cash position offset by an increase in current and total assets, a decrease in debt, and total liabilities. The stock value has risen by 15% because of this, and leverage is declining. Debt to net income fell by nearly two indexes to 4.3x, while long-term debt to equity fell to 0.6x from 0.77x, strengthening an already strong financial position. This is one of the reasons why Warren Buffet is interested and why Berkshire Hathaway is interested New York Stock Exchange: BRK.A Bought into stocks this year. The holdings are small but they are a vote of confidence and confirmation of expectations. Analysts see this defense company’s profits to grow by about 25% next year and 70% by 2028 versus 2024’s total.
Analyst trends are positive in 2024 and are unlikely to change now that Q4 results have been released. Analysts issued revisions steadily throughout the year, raising the consensus target by 35%. Consensus suggests around 5% of the pre-issue closing price and 10% of the critical support target, with another 7% to 10% potentially in the high-end range.
Post-release price action is negative, with shares down 5% in pre-market trading. However, the market is above a crucial support level and may trigger buying when the opening bell rings. If the move breaks below the critical support level near $245, the market could fall to $225 or lower. If support is confirmed, investors can look forward to a rebound that will likely take this market to retest all-time highs and possibly set new highs.
Before you consider HEICO, you’ll want to hear this.
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