Buffett Brain · Research note
Score updated 23 Oct 2026 · analysis from 10 Jun 2026
HEI· Industrials
HEICO
HEICO Corporation's strong revenue growth contrasts with its high valuation, raising questions about its long-term durability and economic moat.
Buffett fit
Partial fit
Owner
41
Durability
100
Management
84
Price
0
Score updated 23 Oct 2026 · analysis from 10 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned HEICO entirely, I would focus on leveraging its strong revenue growth of 24.52% CAGR over the last five years.
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The 10-year test shows HEICO has been profitable every year for the last five years, with no decline in EPS.
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Management has demonstrated discipline with a share count CAGR of just 0.68% and a yield of only 0.04%.
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The current valuation is concerning, with an earnings yield of just 1.63%, significantly below the 8-10% target.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1Revenue CAGR of 24.52% over the last 5 years indicates strong growth potential.
- 2 of 23.5% is in the top quintile of its sector.
- 3Net margin of 16.1% also ranks in the top quintile, reflecting strong profitability.
- 4 (FCF) growth of 40.27% year-over-year shows robust cash generation.
Concerns
5- 1 ratio of 61.5 suggests the stock is overvalued relative to earnings.
- 2 yield of 1.78% is far below the target range of 8-10%.
- 3 of 10.1% is below the sector's top-quintile cutoff of 13.4%.
- 4 of 40.1% is below the sector top-quintile cutoff of 43.2%.
Price history
$300+115.2%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
HEICO designs and manufactures aerospace and defense products, generating $4.49B in revenue. Its Flight Support Group provides essential replacement parts and services for commercial and military aircraft, while the Electronic Technologies Group offers specialized electronic products. The company benefits from a diverse revenue stream and a growing demand for aerospace components. Unit economics appear solid with a of 40.1%.
What other investors would say
The same company, judged by three other documented playbooks.
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