HEI · US
HEI.US: Aerospace aftermarket + electronics compounder
HEICO aero aftermarket + electronics.
Cite a section with a deep link, e.g. /en/r/hei-us-research#thesis
Snapshot
- Price
- USD 320
- Mkt cap
- USD 45.0B
- Revenue
- USD 4.5B
- Gross margin (approx)
- 0.4
Thesis
HEICO Compounding platform via PMA aftermarket parts + electronics/defense subsystem M&A: multi-year revenue and OCF expansion with solid margins; rich valuation—watch organic growth, flight hours, M&A discipline.
Business
Model: Flight Support + Electronic Technologies. Flagships: PMA/OEM aftermarket; rad-hard/RF/power electronics. Edge: certification moat, cost vs OEM, M&A culture. Strategy: bolt-on acquisitions to widen install base and electronics content.
Value chain
Mid-stack aero manufacturing/MRO; upstream metals/electronics; downstream airlines, MROs, OEMs, some defense. Risks: certification lead times; materials/chips; flight-hour cycle.
Valuation
Quality compounder premium (high P/E); sensitive to airline cycle and deal multiples.
Financial trend (~24 months)
Illustrative 8Q with YoY/QoQ (reconstructed from public disclosures; not audit-line):
Revenue · last 8Q
Interactive chart available in the reader.
Gross margin · last 8Q
Interactive chart available in the reader.
Operations
Volume: utilization + parts catalog; price: PMA discount vs OEM with margin; cost: deal amortization + manufacturing. Strong OCF.
Key financials
| Item | Value | YoY | Note |
|---|---|---|---|
| FY2025 rev (approx) | ~$4.49B | +16% | Continued compounding |
| OCF | Strong / rising | — | Cash generation quality |
| Flight Support | Core aftermarket | — | Flight-hour linked |
| Electronic Tech | Niche modules | — | Higher tech content |
Competition
Peer strengths/weaknesses:
Peer map
| Company | Share/role | Margin | Strength | Weakness |
|---|---|---|---|---|
| HEICO (self) | PMA+electronics | High teens OM | Compounder M&A | Valuation |
| TransDigm | Proprietary aero | Very high | Pricing power | Leverage / multiple |
| Honeywell | Diversified aero | Mid | Scale avionics | Less pure aftermarket |
| RTX (Collins) | OEM systems | Mid | OEM content | Conglomerate |
Management
Management (24m)
| Role | Name | Since | 24m change |
|---|---|---|---|
| Co-CEO | Eric Mendelson / Victor Mendelson | long-tenured | No material change |
| CFO | Carlos Macau | long-tenured | Stable |
| Board / founders | Mendelson family influence | ongoing | Culture continuity |
Stability: Steady: long-tenured family/professional leadership; stable M&A culture.
Outlook
Track Flight Support organic growth, ET orders, M&A pace, multiple digestion.
Scenarios
| Scenario | Condition | Implication |
|---|---|---|
| Bull | Demand/execution beats | Upside |
| Base | Trend continues | Hold/watch |
| Bear | Cycle/competition worsens | Drawdown/reassess |
Risks
Not investment advice; defer to latest company filings.