HEICO Corporation designs, manufactures, and sells aerospace, defense, and electronic related products and services in the United States and internationally. The company was founded in 1949 and is based in Hollywood, Florida.
HEI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Heico Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Heico Corp ranked in the 38th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 30.67%. The most interesting components of our discounted cash flow analysis for Heico Corp ended up being:
The company's balance sheet shows it gets 96% of its capital from equity, and 4% of its capital from debt. Notably, its equity weight is greater than 92.04% of US equities in the Industrials sector yielding a positive free cash flow.
The business' balance sheet suggests that 4% of the company's capital is sourced from debt; this is greater than only 11.26% of the free cash flow producing stocks we're observing.
HEI's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 51.94% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Heico Corp? See CHRW, CODA, RSG, CHRA, and EVI.
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Shares of Heico (NYSE: HEI) traded up more than 5% on Wednesday afternoon, and soared as high as up 10% earlier in the day, after the aerospace component manufacturer reported fiscal second-quarter results that came in ahead of expectations. After markets closed Tuesday, Heico reported second-quarter earnings of $0.55 per share on revenue of $468.1 million, beating Wall Street expectations for $0.44 per share in earnings on $462.86 million in revenue. Investors went into earnings season bracing for the worst from commercial aerospace, with the COVID-19 pandemic causing airlines to retrench by grounding planes and postponing expansion plans.