Why HEICO Corporation (HEI) Is a Strong Buy in 2026 Despite Near-Term Volatility

In the dynamic landscape of industrial equities, HEICO Corporation (HEI) stands out as a compelling long-term investment opportunity. Despite its elevated valuation metrics, the company's accelerating revenue and earnings growth, robust competitive advantages, and favorable technical indicators position it as a strong buy for investors seeking undervalued industrial plays with durable value creation potential.

Financial Performance: Sustained Growth Amid Elevated Valuation

HEICO's Q3 2025 results underscore its ability to deliver consistent top- and bottom-line growth. The company reported revenue of $1.21 billion, a 19.3% year-over-year increase, surpassing analyst expectations by 3.2%. Earnings per share (EPS) also outperformed, with GAAP EPS reaching $1.33, a 8.9% beat on estimates according to data. For the full year 2025, HEICO's revenue totaled $4.49 billion, reflecting a 16.26% year-over-year increase, while net earnings surged 34.29% to $690.39 million as reported.

However, HEICO's valuation remains a point of debate. As of December 2025, the stock trades at a trailing twelve months (TTM) P/E ratio of 67.58, significantly above the Aerospace and Defense industry average of 38.7x according to industry data. While this premium may appear excessive, it is justified by HEICO's historical outperformance. The company's 10-year average P/E of 50.58 as per analysis and peer group average of 69.6x according to market reports suggest that the market is pricing in continued growth. Analysts project 10% revenue growth and 12% EPS growth for 2026 according to forecasts, further supporting the case for long-term value creation.

Competitive Advantages: Dominance in Aerospace Aftermarket

HEICO's Flight Support Group (FSG) and Electronic Technologies Group (ETG) form the backbone of its competitive edge. The FSG, which accounts for a significant portion of revenue, leverages FAA-approved Parts Manufacturer Approvals to offer replacement parts at 30–50% lower costs than Original Equipment Manufacturers (OEMs). This cost advantage is critical for airlines and maintenance, repair, and overhaul (MRO) providers seeking to reduce operating expenses. The ETG, meanwhile, caters to high-reliability electronics for defense and space applications, diversifying revenue streams and insulating the company from cyclical downturns.

Strategic acquisitions, such as the July 2025 purchase of Gables Engineering, have further strengthened HEICO's position. The acquisition expanded its avionics and cockpit systems portfolio, enhancing its ability to capture market share in high-margin aerospace segments. Additionally, HEICO's extensive catalog of over 19,000 certified parts-growing by 500 annually-ensures supply assurance and rapid market responsiveness. These factors collectively create a durable moat against OEMs like General Electric and Rolls-Royce, which dominate original parts but face pricing pressures in the aftermarket according to market analysis.

Technical Indicators: Bullish Signals for 2026

From a technical perspective, HEICO's stock is positioned for continued strength. As of November 2025, the stock is trading near its 52-week high of $283.47 and above its 200-day simple moving average (SMA) of $251.23. This suggests strong short-term momentum and aligns with the broader trend of institutional buying. Analysts project the 52-week high for 2026 to reach $264.71, with the 200-day SMA at $244.81 according to technical analysis, indicating a potential continuation of bullish technical patterns.

The stock's proximity to its 52-week high also reflects investor confidence in HEICO's long-term prospects. While volatility is inevitable in a high-growth industrial play, the technical indicators suggest that the current price is supported by fundamental strength rather than speculative fervor.

Analyst Price Targets: 33%+ Upside Potential

Wall Street analysts have assigned HEICO a "Buy" consensus rating, with 19 analysts participating in the latest ratings. The average price target of $353.77 implies an 11–13% upside from current levels, while the highest target of $400.00 represents a 33%+ gain according to market data. Citigroup's initiation of coverage with a $367.00 price target further reinforces the bullish sentiment according to financial reports. These targets are underpinned by HEICO's projected 2026 revenue and EPS growth, as well as its disciplined capital allocation strategy, which has improved its net debt-to-EBITDA ratio to 1.6 as of Q4 2025.

Conclusion: A Strong Buy for Long-Term Investors

While HEICO's elevated P/E ratio may deter short-term traders, the company's accelerating revenue and EPS growth, coupled with its dominant position in the aerospace/defense aftermarket, justify the premium valuation. The technical indicators and analyst price targets further validate its long-term potential, making HEI a compelling addition to portfolios seeking industrial equities with durable value creation. For investors willing to navigate near-term volatility, HEICO offers a rare combination of growth, margin expansion, and strategic differentiation in a sector poised for sustained demand.