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Heico (HEI) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Heico (HEI) closed at $137.63, marking a -0.76% move from the previous day. This change lagged the S&P 500's daily loss of 0.16%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, lost 0.44%.

Prior to today's trading, shares of the defense and aerospace contractor had gained 5.42% over the past month. This has outpaced the Aerospace sector's gain of 0.39% and the S&P 500's gain of 4% in that time.

HEI will be looking to display strength as it nears its next earnings release. In that report, analysts expect HEI to post earnings of $0.53 per share. This would mark year-over-year growth of 8.16%. Meanwhile, our latest consensus estimate is calling for revenue of $513.73 million, up 10.28% from the prior-year quarter.

HEI's full-year Zacks Consensus Estimates are calling for earnings of $2.24 per share and revenue of $2.01 billion. These results would represent year-over-year changes of +23.76% and +13.29%, respectively.

Investors should also note any recent changes to analyst estimates for HEI. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.07% higher. HEI is currently a Zacks Rank #1 (Strong Buy).

In terms of valuation, HEI is currently trading at a Forward P/E ratio of 61.87. For comparison, its industry has an average Forward P/E of 23.73, which means HEI is trading at a premium to the group.

We can also see that HEI currently has a PEG ratio of 4.43. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Aerospace - Defense Equipment industry currently had an average PEG ratio of 2.31 as of yesterday's close.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This industry currently has a Zacks Industry Rank of 81, which puts it in the top 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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