The 10-second takeaway
For the quarter ended April 30 (Q2), HEICO met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew.
Margins shrank across the board.
HEICO chalked up revenue of $216.3 million. The 12 analysts polled by S&P Capital IQ expected to see net sales of $219.1 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $184.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.36. The 11 earnings estimates compiled by S&P Capital IQ forecast $0.37 per share. GAAP EPS of $0.36 for Q2 were 13% higher than the prior-year quarter's $0.32 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 34.8%, 120 basis points worse than the prior-year quarter. Operating margin was 17.4%, 40 basis points worse than the prior-year quarter. Net margin was 8.8%, 30 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $232.6 million. On the bottom line, the average EPS estimate is $0.43.
Next year's average estimate for revenue is $910.1 million. The average EPS estimate is $1.58.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 149 members out of 161 rating the stock outperform, and 12 members rating it underperform. Among 44 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give HEICO a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on HEICO is outperform, with an average price target of $47.84.
Over the decades, small-cap stocks, like HEICO have provided market-beating returns, provided they're value priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add HEICO to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of HEICO. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.