HEICO Corporation (HEI-A) DCF Valuation
Why we don't show a single “fair value” for HEI-A
Even the optimistic scenario of a conservative trailing-FCF model ($88.98) sits far below today's price — the market is paying for growth and durability beyond what this model structure captures. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$261.70 is justified only if free cash flow grows about +52.4% a year (fading to 2.5% long-run) at a 9.3% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 15.0%/yr | 10.3% | $49.03 |
| Base case | 18.0%/yr | 9.3% | $67.00 |
| Optimistic | 20.0%/yr | 8.3% | $88.98 |
| Analyst DCF (FMP) | independent reference — different model | $137.96 | |
Current Price
$261.70
Market-Implied Growth
+52.4%/yr
vs +19.4% 5Y actual
Base-Case Model Value
$67.00
model output — not a price target
HEI-A DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for HEI-A (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $525.0M · 0.19B shares · net debt $2.0B
Estimated Fair Value
$67.00
-74.4% vs $261.70
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 18.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $261.70; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 7.3% | $84.74 | $92.53 | $102 | $114 | $128 |
| 8.3% | $69.72 | $75.11 | $81.42 | $88.92 | $97.96 |
| 9.3% | $58.60 | $62.51 | $67.00 | $72.18 | $78.26 |
| 10.3% | $50.05 | $52.99 | $56.31 | $60.08 | $64.40 |
| 11.3% | $43.27 | $45.55 | $48.09 | $50.93 | $54.13 |
About HEICO Corporation
HEICO Corporation operates as a diversified enterprise, involved in the design, manufacturing, and global distribution of specialized products and services primarily for the aerospace, defense, and electronics sectors. Its activities span both domestic and international markets. The company's Flight Support Group division delivers a range of essential components and services. This encompasses producing replacement parts for jet engines and aircraft, as well as fabricating thermal insulation blankets, advanced renewable insulation systems, and various specialty components. The segment also functions as a distributor for critical hydraulic, pneumatic, structural, interconnect, mechanical, and electro-mechanical parts, serving commercial, regional, and general aviation clients. A significant aspect of its operations involves extensive repair and overhaul services for jet engine and aircraft components, avionics, instruments, composites, and flight surfaces on commercial aircraft, alongside maintaining avionics, navigation systems, and other vital instruments utilized in military aircraft. Within its Electronic Technologies Group segment, HEICO develops and supplies advanced technological products. This broad portfolio features electro-optical infrared simulation and testing equipment, electro-optical laser products, and diverse power equipment, including microwave solutions. The segment additionally produces electromagnetic and radio frequency interference (RFI) shielding and suppression filters, high-speed interface products, high voltage interconnection devices, sophisticated advanced power electronics, and power conversion units. Essential safety devices such as underwater and emergency locator transmission beacons are also manufactured. Further specialized electronic offerings include traveling wave tube amplifiers, microwave power modules, three-dimensional microelectronic and stacked memory products, robust connectivity solutions designed for harsh environments, and custom molded cable assemblies. Completing its specialized array are radio frequency and microwave amplifiers, transmitters, and receivers; communications and electronic intercept receivers and tuners; self-sealing auxiliary fuel systems; active antenna systems; and nuclear radiation detectors. HEICO's varied client base predominantly includes entities within the aviation, defense, space, medical, telecommunications, and broader electronics industries. The corporation, founded in 1957, is headquartered in Hollywood, Florida.
- Sector
- Industrials
- Industry
- Aerospace & Defense
- CEO
- Eric A. Mendelson