# HEICO Corporation (HEI) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/HEI/thesis · /stocks/HEI/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: HEI
step: "04"
title: Financial Snapshot — 3-Year P&L Summary
created: 2026-05-29
---

### HEI — Financial Snapshot (3-Year P&L Summary)

#### Income Statement Summary

All figures in millions USD except per-share data. Fiscal year ends October 31.

| Metric | FY2022 | FY2023 | FY2024 | 3-Yr CAGR |
|--------|--------|--------|--------|-----------|
| **Revenue** | $2,410M | $3,230M | $3,870M | +26.7% |
| **Gross Profit** | ~$880M | ~$1,130M | ~$1,350M | |
| **Gross Margin** | ~36.5% | ~35.0% | ~34.9% | |
| **Operating Income (EBIT)** | ~$490M | ~$620M | ~$870M | |
| **EBIT Margin** | ~20.3% | ~19.2% | ~22.5% | |
| **Net Income** | ~$374M | ~$449M | ~$598M | +26.5% |
| **Net Margin** | ~15.5% | ~13.9% | ~15.5% | |
| **EPS (diluted)** | ~$2.71 | ~$3.19 | ~$4.19 | |
| **EBITDA** | ~$560M | ~$740M | ~$1,010M | |
| **EBITDA Margin** | ~23.2% | ~22.9% | ~26.1% | |

Note: FY2023 margins were compressed by Wencor acquisition costs and integration; FY2024 shows normalization and leverage.

#### Segment Operating Income

| Segment | FY2022 OI | FY2022 Margin | FY2023 OI | FY2023 Margin | FY2024 OI | FY2024 Margin |
|---------|-----------|--------------|-----------|--------------|-----------|--------------|
| FSG | ~$275M | ~17.4% | ~$380M | ~17.9% | ~$530M | ~20.9% |
| ETG | ~$220M | ~26.4% | ~$250M | ~22.5% | ~$345M | ~25.9% |
| Corporate/Other | (~$5M) | — | (~$10M) | — | (~$5M) | — |
| **Total** | **~$490M** | **~20.3%** | **~$620M** | **~19.2%** | **~$870M** | **~22.5%** |

Note: ETG consistently earns higher margins than FSG due to its proprietary defense electronics positions and smaller scale of individual operations.

#### Revenue Growth Analysis

| Period | Revenue | YoY Growth | Organic | M&A |
|--------|---------|-----------|---------|-----|
| FY2020 | $1,834M | -3.8% | — | — |
| FY2021 | $2,084M | +13.6% | +5-7% | +6-9% |
| FY2022 | $2,410M | +15.6% | +10-12% | +4-6% |
| FY2023 | $3,230M | +34.0% | +10-12% | +22-24% (Wencor) |
| FY2024 | $3,870M | +19.8% | +8-10% | +10-12% (full yr Wencor) |

The FY2023 surge was dominated by the Wencor acquisition. FY2024 reflects the first full fiscal year of Wencor contribution plus normal organic growth.

#### Profitability Trends

##### Gross Margin

Gross margins have trended slightly lower over the period (36.5%→34.9%) due to:
- Wencor's distribution-heavy model carries lower gross margins (~25–28%) than HEICO's manufactured PMA parts (~55–65%)
- Mix shift from high-margin PMA manufacturing toward distribution pulls blended gross margin down
- This is normal and expected; operating leverage and SG&A discipline maintain EBIT margins

##### EBIT Margin Trajectory
- FY2022: ~20.3% — pre-Wencor, legacy HEICO margins
- FY2023: ~19.2% — Wencor integration costs + deal financing costs compressed margins
- FY2024: ~22.5% — integration benefits emerging, operating leverage kicking in
- Long-term target: Management has consistently guided to 20–25% EBIT margins as the business model range

##### Net Income Bridge (FY2023 → FY2024)
- Revenue growth: +$640M → ~+$150M net income impact at ~23% flow-through
- EBIT margin improvement: +330bps → additional ~$100M impact
- Higher interest expense (Wencor debt): partially offset (~-$50M)
- Tax rate roughly stable (~21-22%)
- Net: ~+$149M net income increase

#### EPS Analysis

| Metric | FY2022 | FY2023 | FY2024 |
|--------|--------|--------|--------|
| Basic EPS | ~$2.73 | ~$3.20 | ~$4.20 |
| Diluted EPS | ~$2.71 | ~$3.19 | ~$4.19 |
| YoY EPS growth | +20.5% | +17.7% | +31.3% |
| Shares (diluted, M) | 138.0M | 140.7M | 142.8M |

Note: HEI is modestly dilutive due to stock-based compensation; share count growth is slow (~1% per year). The dual class structure (HEI + HEI.A) means reported EPS uses combined diluted share count.

#### R&D and Investment Spending

HEICO's nature as a parts replicator rather than an innovator means its "R&D" spending is actually PMA engineering — the process of reverse-engineering and certifying OEM parts:

- HEICO does not report a separate R&D line
- Engineering costs embedded in COGS for PMA parts operations
- Capital intensity is LOW — Capex typically 1.5–2.5% of revenue
- The value creation is in the FAA approval process, not in traditional R&D

#### Cash Earnings vs. GAAP Earnings

| Metric | FY2022 | FY2023 | FY2024 |
|--------|--------|--------|--------|
| GAAP Net Income | ~$374M | ~$449M | ~$598M |
| D&A | ~$70M | ~$120M | ~$140M |
| Amortization of intangibles | ~$80M | ~$120M | ~$150M |
| Stock comp | ~$20M | ~$30M | ~$35M |
| Operating Cash Flow | ~$480M | ~$600M | ~$750M |
| Capex | ~$50M | ~$60M | ~$75M |
| Free Cash Flow | ~$430M | ~$540M | ~$675M |
| FCF/Net Income conversion | ~115% | ~120% | ~113% |

FCF consistently exceeds GAAP net income due to the amortization of acquisition intangibles — a key quality signal. These are non-cash charges that reduce GAAP income but not economic earnings power.

#### Balance Sheet Snapshot (FY2024 Year-End)

| Item | FY2024 | FY2023 | Change |
|------|--------|--------|--------|
| Cash & Equivalents | ~$180M | ~$150M | +20% |
| Total Debt | ~$2,600M | ~$2,800M | -7% |
| Net Debt | ~$2,420M | ~$2,650M | -9% |
| Shareholders' Equity | ~$3,800M | ~$3,100M | +23% |
| Total Assets | ~$8,500M | ~$8,000M | +6% |
| Net Debt / EBITDA | ~2.4x | ~3.6x | Rapid deleveraging |

Post-Wencor leverage has been declining rapidly as EBITDA scales and HEICO generates strong free cash flow for debt repayment.

#### Key Valuation Metrics (as of late 2024)

| Metric | Value |
|--------|-------|
| Market Cap | ~$27–30B |
| EV (Market Cap + Net Debt) | ~$30–33B |
| EV/EBITDA | ~30–33x |
| P/E (trailing) | ~50–60x |
| P/E (forward) | ~42–48x |
| EV/Revenue | ~8–9x |
| P/FCF | ~40–45x |

HEICO trades at a persistent premium valuation reflecting the quality of the business model, the compounding track record, and the scarcity of a business with these characteristics.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/HEI/fundamental

## Navigation

- Overview: /stocks/HEI
- Financials (this page): /stocks/HEI/financials
- Thesis: /stocks/HEI/thesis
- Investment Memo: /stocks/HEI/memo
- Coverage universe: /stocks