Why Is Heico (HEI) Down 10.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Heico Corporation (HEI). Shares have lost about 10.3% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Heico due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Heico Corporation before we dive into how investors and analysts have reacted as of late.
HEICO Q3 Earnings Top Estimates, Sales Increase Year Over Year
HEICO Corporation posted third-quarter fiscal 2026 earnings of $1.67 per share, which beat the Zacks Consensus Estimate of $1.51 by 10.6%. The bottom line also improved 32.5% from the year-ago quarter’s $1.26.
HEI’s Total Sales
Quarterly net sales came in at $1.41 billion, which rose 23.1% year over year and surpassed the consensus mark of $1.35 billion by 4.9%. Results were driven by consolidated organic net sales growth of 14% and contributions from acquisitions.
HEICO’s Operational Update
HEICO’s cost of sales increased 20.5% year over year to $832 million.
The company’s selling, general and administrative (SG&A) expenses rose 17.5% to $225.8 million.
Interest expense climbed 13.3% to $35.9 million from $31.7 million in the year-ago quarter.
HEI Posts Record Profit as Margins Expand
Operating income jumped 34% year over year to $355.2 million, and consolidated operating margin expanded to 25.1% from 23.1% in the prior-year period.
HEI delivered record quarterly net income of $235.4 million, up 32.8% year over year.
HEI’s Segmental Performance in Q3
Flight Support Group: Net sales from this segment rose 18% year over year to $947.8 million. Growth was led by robust organic expansion of 12%, supported by improved demand across the group’s product lines as well as the impact of fiscal 2026 acquisitions.
The segment’s operating income increased 24% year over year to $245.3 million, and operating margin improved to 25.9% from 24.7%, helped by a more favorable product mix and efficiencies in SG&A expenses.
Electronic Technologies Group: The segment’s net sales climbed 36% to $483.5 million. The increase reflected organic growth of 18% plus contributions from acquisitions completed in fiscal 2025 and fiscal 2026, with demand improving across several end markets.
The segment’s operating income rose 55% year over year to $125.6 million, and operating margin expanded to 26% from 22.8%, driven by net sales growth, improved gross profit margin and better SG&A leverage.
HEI’s Financial Details
As of July 31, 2026, HEI’s cash and cash equivalents totaled $241 million compared with $217.8 million as of Oct. 31, 2025.
Cash flow provided by operating activities was $815.9 million during the first nine months of fiscal 2026, reflecting a rise of 27.7% from the prior-year period’s level.
HEICO reported a long-term debt (net of current maturities) of $2.54 billion as of July 31, 2026, up from $2.16 billion as of Oct. 31, 2025.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Heico has a nice Growth Score of B, a score with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Heico has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
