Everyone knows Boeing and Airbus. Almost no one knows this firm. Yet it makes money on every aircraft.
HEICO is one of those companies that the aviation industry has turned into a silent source of high margins, without ever manufacturing a single aircraft. Revenues in fiscal 2025 increased by 16% to $4.49 billion, and net income climbed 34% to $690 million. Unlike Boeing or Airbus, it doesn't make money from selling planes, but from maintaining them throughout decades of operation, a position for which the market today pays a P/E of around 60 to 71 times earnings. The question for investors therefore isn't whether the aircraft fleet will grow. The question is whether HEICO can maintain its lead even at that price.
Key points
HEICO makes money on planes longer and better than their manufacturers; in fiscal 2025, it achieved an operating margin of 22.7% and net income grew 34% to $690 million thanks to an increasing share of high-margin aftermarket parts.
The company rests on a regulatory barrier that's hard to bypass; HEICO holds over 19,500 FAA-approved PMA parts and typically offers them at 15 to 40% less than original manufacturers like Boeing or GE Aerospace.
Growth is driven primarily by acquisitions of small specialized firms; since 1990, HEICO has made roughly 113 of them, at a pace of three to six per year, while keeping net debt to EBITDA around 1.6 times.
Revenues and earnings are growing faster than at the aircraft makers themselves; between 2015 and 2025, revenues rose at 14% annually and earnings at 18% annually, while Boeing has posted losses in recent years.
The valuation already prices in continued double-digit growth; the stock trades at a P/E of around 60 to 71 times trailing earnings, significantly above the sector average and the company's own historical average.
Boeing $BA and Airbus $AIR.PA sell a plane once. HEICO $HEI makes money on it for a full thirty years, over its entire lifespan, through spare parts, repairs, and electronics. The company hardly anyone talks about achieves higher operating margins than almost anyone else in the aviation industry and has grown earnings by nearly 18% annually over the past decade. The question is not whether its business is high quality. The question is how much of that quality the investor is already paying for in the stock price.
When you think of the aviation industry, most investors picture two names: Boeing and Airbus. The duopoly that produces nearly all large commercial aircraft in the world is visible, media-covered, and politically sensitive. Yet there is a company that makes money on those planes throughout their entire service life, which can easily span 25 to 30 years, and most of the public has never heard of it.
The paradox of the aviation value chain is that the aircraft manufacturer collects revenue once, upon delivery of the unit, while suppliers of spare parts, electronics, and services collect revenue repeatedly over the aircraft's entire lifespan.
The economics differ significantly depending on one's position in the chain:
Player | Revenue source | Economic characteristics |
|---|---|---|
Aircraft manufacturer (Boeing, Airbus) | One-off revenue per delivered unit | High development and production costs, fierce price competition between two players, strong cyclicality |
Engine manufacturer | Engine sale and recurring overhauls | Lower margins on new engines, but more stable income from subsequent servicing |
Original component supplier (OEM) | Sale of certified parts under their own brand | Strong position with new aircraft, prices not pressured by PMA competition |
Aftermarket parts and services supplier (HEICO) | Recurring sale of spare parts throughout the aircraft's service life | High-margin, recurring income with low sensitivity to who built the aircraft |
It is precisely the last row of the table that is the center of gravity for HEICO's business: the most compelling economics in aviation occur not at the point of selling a new aircraft, but in the so-called aftermarket, i.e., the market for spare parts and maintenance for planes that have been flying for years.
What HEICO actually does
Two segments, one principle
HEICO is divided into two segments united by the same principle: repeated sales of specialized components to customers who cannot easily replace them.
Segment | Share of revenue (FY2025) | Main products | Typical customer |
|---|---|---|---|
Flight Support Group (FSG) | approx. 70% | Spare parts for aircraft engines and airframes (PMA parts), repairs, distribution | Commercial airlines, independent MRO shops |
Electronic Technologies Group (ETG) | approx. 30% | Electronic, microwave, and electro-optical components | Aircraft manufacturers, defense contractors, space agencies, telecommunications companies |
FSG customers buy spare parts repeatedly, not as one-offs, because an aircraft must undergo regular maintenance throughout its entire lifespan. ETG customers, on the other hand, need specialized electronic components for critical systems, where switching suppliers requires new certification.