What Happened?

Shares of aerospace and defense company HEICO (NSYE:HEI) fell 9.8% in the morning session after the company reported weak third-quarter earnings. Its revenue missed, and its adjusted operating income fell short of Wall Street's estimates. Also, the company's debt profile continued to leave little room for error, given the negative net cash position, with management highlighting a total debt-to-net income ratio of 4.34x. In addition, the top-line growth continued to decelerate, with revenue up 8.2% year on year during the quarter, a sharp drop from the double-digit growth recorded in the previous quarters, presenting more reasons for investors to be worried. Overall, this was a weaker quarter.

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What The Market Is Telling Us

HEICO’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

HEICO is up 33.2% since the beginning of the year, but at $236.93 per share, it is still trading 15.1% below its 52-week high of $279.02 from November 2024. Investors who bought $1,000 worth of HEICO’s shares 5 years ago would now be looking at an investment worth $2,042.

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