The company is experiencing explosive growth, but investors are increasingly questioning the fairness of its valuation.

What’s so special about HEICO?

HEICO has the capability to provide critical aircraft parts (albeit in small quantities) with FAA PMA certification and sell them at 30-50% lower than original manufacturer (OEM) prices. This builds customer loyalty and ensures a steady stream of revenue.

dispersed structure

The acquired company retains management and operational independence. This incentivizes the team and enables HEICO to efficiently integrate new assets while maintaining its expertise.

Two growth engines: aviation and electronics.

Aviation Support Group (FSG, approximately 55% of revenue): repairs and manufactures aircraft parts. This group is growing due to the resurgence of air travel and fleet modernization.

Electronic Technologies Group (ETG, about 45% of revenue): High-margin components for aerospace, defense and medical. This is strategic diversification and entry into markets with high barriers to entry.

The company specializes in acquiring specialized companies (more than 10 in the past three years), which has strengthened its experience and market share.

Future growth factors:

The aircraft maintenance market is expected to grow to $156 billion by 2035.

ETG Sector: Growing commercial launch, satellite programs (Starlink, Kuiper) and defense contracts directly support this highly profitable segment.

Despite the high debt level, the debt-to-EBITDA ratio remains within an acceptable range (around 3.8x). Operating cash flow is strong (over $600 million in the first nine months of 2025), allowing the company to pay down debt and fund dividends through stock buybacks.

The downside is that the company trades at higher valuations at multiple price-to-earnings ratios. For example, a price-to-sales ratio of 10 is considered overstated. The market pays for high-quality, growing assets.

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