HEICO Corporation (HEI)
Quantitative Summary
DeterministicHEI trades at 62.1x earnings — a 39% premium to its sector average of 44.7x — without a dominant ROIC-WACC spread. Financial health metrics are strong: Piotroski 7/9, Altman Z 7.6 (above 3.0 safe zone threshold). DCF fair value of $173 implies 41% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe company demonstrates robust fundamental quality, evidenced by a Piotroski F-Score of 7/9 and a Beneish M-Score of -2.45, signaling strong financial health with low earnings manipulation risk. The DuPont decomposition reveals that the 15.8% ROE is primarily driven by exceptional profitability rather than operational efficiency or leverage; specifically, a net margin of 15.4% acts as the dominant force, while asset turnover remains modest at 0.53x and equity multiplier sits at only 1.94x. This high-margin profile supports revenue growth of 16.3% year-over-year, yet the implied ROIC-WACC spread is not explicitly quantified in the provided metrics to determine if returns significantly exceed the cost of capital beyond the stated 10.5% ROIC figure alone.
Valuation metrics present a significant divergence between current pricing and intrinsic value estimates. The stock trades at a premium P/E ratio of 52.8x, which implies aggressive market expectations for future earnings expansion that must be validated against historical norms or sector peers to assess reasonableness. Conversely, the DCF model calculates a fair value of $181 per share; comparing this intrinsic target directly against the current market price is essential to determine if the high multiple is justified by implied long-term growth rates exceeding those embedded in the discount rate. The wide gap between these valuation anchors suggests that any deviation from projected performance will be magnified due to the elevated entry multiple.
Insider activity remains neutral over the last 90 days with zero net flow, indicating no specific directional signal from management regarding near-term corporate actions or capital allocation priorities. While the strong fundamentals and growth trajectory provide a solid operational base, the substantial valuation premium leaves limited margin for error if actual execution falters relative to analyst consensus. The risk/reward profile hinges on whether the market's pricing of sustained high margins aligns with realized future performance given the lack of insider conviction or additional qualitative data points regarding sector dynamics.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 16% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 9.1% | 11.1% | 13.1% |
|---|---|---|---|
| 2% | $209 | $156 | $122 |
| 3% | $240 | $173 | $132 |
| 4% | $284 | $195 | $145 |
Center = base case. Green = >10% upside, Red = >10% downside vs $332.14.
Pre-computed DCF: WACC=11.1%, terminal growth 3%. Fair value $173 (-41.1%). Not investment advice.
Valuation Context
Currently trading 34% above its 5-year average P/E of 42.7x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedHEICO Corporation currently trades at $301.20 within the Industrials sector, presenting a scenario where price action must be weighed against an often volatile macroeconomic backdrop for industrial equities. The absence of specific drawdown metrics or volatility indices in the provided dataset limits a granular assessment of recent risk dynamics; however, the sustained level near $301 suggests that market participants are currently pricing in stability rather than immediate capitulation. Without data on beta coefficients or standard deviation over rolling periods, it remains unclear whether this price point represents a structural consolidation supported by fundamental earnings resilience or a temporary plateau amidst broader sector headwinds. The technical picture relies heavily on the assumption that the current valuation reflects an equilibrium between supply and demand forces rather than a fragile momentum trap. In environments where industrial cyclicality is pronounced, maintaining such levels often requires consistent order flow and manageable leverage ratios to prevent sharp corrections when sentiment shifts. The lack of visible extreme volatility indicators implies that short-term swings may be contained, yet this calm does not necessarily preclude underlying fragility if fundamental catalysts are misaligned with the current price discovery process. Ultimately, the risk profile appears contingent on external factors not explicitly detailed here, suggesting that future movements will likely hinge more on macroeconomic triggers than purely internal technical patterns at this specific juncture.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-01-05 | $0.1200 | 0.0% |
| 2025-07-01 | $0.1200 | +9.1% |
| 2025-01-03 | $0.1100 | 0.0% |
| 2024-07-01 | $0.1100 | +10.0% |
| 2024-01-03 | $0.1000 | 0.0% |
| 2023-06-30 | $0.1000 | 0.0% |
| 2023-01-04 | $0.1000 | +11.1% |
| 2022-06-30 | $0.0900 | 0.0% |
| 2022-01-05 | $0.0900 | 0.0% |
| 2021-06-30 | $0.0900 | +12.5% |
| 2021-01-06 | $0.0800 | 0.0% |
| 2020-06-30 | $0.0800 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XAR or ARKX, the fund manager is mechanically forced to buy or sell HEI shares regardless of HEICO Corporation's individual fundamentals. We estimate $1.6B of passive capital is structurally linked to HEI through 8 tracked ETFs. Index rebalances and ETF creation/redemption cycles can create noticeable volume spikes unrelated to company news.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in HEICO Corporation to visualize passive redemption contagion across ETFs and collateral stocks.
If HEICO Corporation (HEI) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies L3HARRIS TECHNOLOGIES INC (LHX) as the most exposed collateral stock, sharing 2 ETFs with HEI. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 18 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
HEI Ownership Dynamics
Passive funds hold 1 in every 8 HEI shares, reducing daily market volatility.
HEICO Corporation (HEI) exerts measurable gravity on the passive index market, currently representing 3.1% of the XAR (XAR) and 1.2% of the ARKX (ARKX). Across 18 tracked ETFs, approximately 7M shares (12.8% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest HEI Exposure
Float lock-up computed from 18 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
HEI Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for HEICO Corporation over the past year sits near $316.82 (13% of 252-day volume). The current price of $332.14 trades 4.8% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (13% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
HEI Capital Efficiency
How efficiently does HEICO Corporation convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
HEICO Corporation converts 71% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. However, the ROIC-WACC spread is negative (-0.5%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-12 | 572 | $289.77 | $165,748.44 |
| 2026-05-11 | 2,553 | $292.52 | $746,803.56 |
| 2026-05-06 | 4,916 | $277.33 | $1.4M |
| 2026-04-27 | 26 | $264.04 | $6,865.04 |
| 2026-04-20 | 610 | $291.57 | $177,857.7 |
| 2026-04-17 | 3,847 | $284.66 | $1.1M |
| 2026-04-01 | 90 | $274.20 | $24,678 |
| 2026-03-25 | 5,306 | $280.69 | $1.5M |
| 2026-03-23 | 55,598 | $275.16 | $15.3M |
| 2026-03-16 | 5 | $288.45 | $1,442.25 |
| 2026-03-11 | 9 | $306.40 | $2,757.6 |
| 2026-03-03 | 6,052 | $329.25 | $2.0M |
| 2026-03-02 | 7 | $319.46 | $2,236.22 |
| 2026-02-24 | 326 | $346.27 | $112,884.02 |
| 2026-02-23 | 5,106 | $351.66 | $1.8M |
| 2026-02-20 | 4 | $345.99 | $1,383.96 |
| 2026-02-18 | 81 | $337.21 | $27,314.01 |
| 2026-02-05 | 124 | $324.48 | $40,235.52 |
| 2026-02-03 | 79 | $332.26 | $26,248.54 |
| 2026-01-21 | 10,206 | $344.52 | $3.5M |
| 2026-01-20 | 257 | $352.55 | $90,605.35 |
| 2026-01-13 | 312 | $356.74 | $111,302.88 |
| 2025-12-30 | 9 | $329.24 | $2,963.16 |
| 2025-12-24 | 11,651 | $337.89 | $3.9M |
| 2025-12-23 | 813 | $334.58 | $272,013.54 |
| 2025-12-22 | 834 | $326.67 | $272,442.78 |
| 2025-12-05 | 1 | $315.64 | $315.64 |
| 2025-11-18 | 5,394 | $310.88 | $1.7M |
| 2025-11-14 | 7,697 | $317.41 | $2.4M |
| 2025-11-13 | 8,344 | $325.97 | $2.7M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| GE | 0.558 | 0.596 | Moderate |
| HWM | 0.557 | 0.632 | Moderate |
| WWD | 0.519 | 0.566 | Moderate |
| CW | 0.488 | 0.584 | Moderate |
| VSEC | 0.448 | 0.535 | Moderate |
| TDG | 0.448 | 0.350 | Moderate |
| SARO | 0.434 | 0.450 | Moderate |
| ATI | 0.415 | 0.509 | Moderate |
| EME | 0.406 | 0.445 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare HEI to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.