Heico (NYSE: HEI) is flying high in the aerospace world, and for good reason. This company has been on a serious winning streak, pulling in strong revenue and making smart business moves.

For starters, Heico’s revenue is climbing fast. Experts predict an 11% jump in 2025 and another 7.1% in 2026. That’s solid growth, especially in a competitive industry.

The company also knows how to make money. Its return on equity (ROE) is 15.6%, which is better than most of its rivals. Plus, its debt isn’t out of control. Heico’s total debt-to-capital ratio is 38.18%, much lower than the industry’s 53.48%. That means it’s handling its finances well and not drowning in debt.

Another big win is that Heico has plenty of cash to keep things running smoothly. Its current ratio (how well it can cover short-term bills) is 3.40, while the industry average is just 1.74. In simple terms, Heico is sitting pretty when it comes to financial stability.

Heico’s Risk Factor

While Heico’s aggressive growth strategy looks exciting, it comes with risks. The company has bought up 103 businesses since 1990. That’s a lot. It recently grabbed a 90% stake in Millennium International, and while expansion is usually good, too much too fast can be dangerous.

One warning sign with Heico is the return on capital employed (ROCE), a measure of how efficiently it turns investments into profits, has dropped from 17% to 12% over the past five years.

That means spending more to grow but getting less return on that investment. Not a great trend.

Then, there’s the uncertainty around U.S. defence spending. Government contracts play a big role in aerospace and defence companies, and if spending takes a hit, Heico could feel the squeeze. Any changes in military budgets could shake up the stock’s performance.

A History Of Success

Heico is a strong company with a history of success. If you believe in the long-term future of aerospace and defence, this could be a solid investment. It’s financially stable and growing, which is always a good sign.

But it’s not all smooth sailing. Slower returns on investment and the risk of government budget cuts could cause some turbulence. If you’re looking for a safe bet, you might want to think twice before jumping in.

Investing is all about smart choices. If you’re ready for some ups and downs, Heico might be worth the ride. But if you like a smoother journey, it could be better to wait and see how things play out.