Aerospace Stocks Q3 Teardown: HEICO (NYSE:HEI) Vs The Rest

January 02, 2025 at 04:06 AM EST

HEI Cover Image

Looking back on aerospace stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including HEICO (NYSE: HEI) and its peers.

Aerospace companies often possess technical expertise and have made significant capital investments to produce complex products. It is an industry where innovation is important, and lately, emissions and automation are in focus, so companies that boast advances in these areas can take market share. On the other hand, demand for aerospace products can ebb and flow with economic cycles and geopolitical tensions, which can be particularly painful for companies with high fixed costs.

The 14 aerospace stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 2% above.

Thankfully, share prices of the companies have been resilient as they are up 8.8% on average since the latest earnings results.

HEICO (NYSE: HEI)

Founded in 1957, HEICO (NYSE: HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.

HEICO reported revenues of $1.01 billion, up 8.2% year on year. This print fell short of analysts’ expectations by 1.7%. Overall, it was a softer quarter for the company with a miss of analysts’ organic revenue and adjusted operating income estimates.

Unsurprisingly, the stock is down 8.5% since reporting and currently trades at $237.90.

Is now the time to buy HEICO? Access our full analysis of the earnings results here, it’s free.

Best Q3: Ducommun (NYSE: DCO)

California’s oldest company, Ducommun (NYSE: DCO) is a provider of engineering and manufacturing services for high-performance products primarily within the aerospace and defense industries.

Ducommun reported revenues of $201.4 million, up 2.6% year on year, outperforming analysts’ expectations by 3.8%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.6% since reporting. It currently trades at $63.66.

Is now the time to buy Ducommun? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Textron (NYSE: TXT)

Listed on the NYSE in 1947, Textron (NYSE: TXT) provides products and services in the aerospace, defense, industrial, and finance sectors.

Textron reported revenues of $3.43 billion, up 2.5% year on year, falling short of analysts’ expectations by 2.7%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations.

As expected, the stock is down 13.5% since the results and currently trades at $75.11.

Read our full analysis of Textron’s results here.

Rocket Lab (NASDAQ: RKLB)

Becoming the first private company in the Southern Hemisphere to reach space, Rocket Lab (NASDAQ: RKLB) offers rockets designed for launching small satellites.

Rocket Lab reported revenues of $104.8 million, up 54.9% year on year. This print topped analysts’ expectations by 2.4%. Overall, it was a stunning quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations.

Rocket Lab achieved the fastest revenue growth among its peers. The stock is up 75.3% since reporting and currently trades at $25.70.

Read our full, actionable report on Rocket Lab here, it’s free.

TransDigm (NYSE: TDG)

Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE: TDG) develops and manufactures components and systems for military and commercial aviation.

TransDigm reported revenues of $2.19 billion, up 18% year on year. This result beat analysts’ expectations by 0.6%. More broadly, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but full-year revenue guidance slightly missing analysts’ expectations.

TransDigm had the weakest full-year guidance update among its peers. The stock is down 8.4% since reporting and currently trades at $1,265.

Read our full, actionable report on TransDigm here, it’s free.

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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