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HEICO (NYSE:HEI) Reports Strong Q4, Stock Soars

Aerospace and defense company HEICO (NSYE:HEI) reported Q4 CY2024 results topping the market’s revenue expectations , with sales up 14.9% year on year to $1.03 billion. Its GAAP profit of $1.20 per share was 26.6% above analysts’ consensus estimates.

Is now the time to buy HEICO? Find out in our full research report.

HEICO (HEI) Q4 CY2024 Highlights:

  • Revenue: $1.03 billion vs analyst estimates of $977.6 million (14.9% year-on-year growth, 5.4% beat)

  • EPS (GAAP): $1.20 vs analyst estimates of $0.95 (26.6% beat)

  • Adjusted EBITDA: $273.9 million vs analyst estimates of $251.6 million (26.6% margin, 8.9% beat)

  • Operating Margin: 22%, up from 20.1% in the same quarter last year

  • Free Cash Flow Margin: 18%, up from 11% in the same quarter last year

  • Market Capitalization: $27.97 billion

Company Overview

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

Aerospace

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.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, HEICO’s sales grew at an exceptional 13.8% compounded annual growth rate over the last five years. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

HEICO Quarterly Revenue
HEICO Quarterly Revenue

 

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. HEICO’s annualized revenue growth of 30.6% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

HEICO Year-On-Year Revenue Growth
HEICO Year-On-Year Revenue Growth

 

This quarter, HEICO reported year-on-year revenue growth of 14.9%, and its $1.03 billion of revenue exceeded Wall Street’s estimates by 5.4%.

Looking ahead, sell-side analysts expect revenue to grow 7.8% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is above average for the sector and implies the market is baking in some success for its newer products and services.

Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend.

Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

HEICO has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 21.4%.

Looking at the trend in its profitability, HEICO’s operating margin rose by 1.5 percentage points over the last five years, as its sales growth gave it operating leverage.

HEICO Trailing 12-Month Operating Margin (GAAP)
HEICO Trailing 12-Month Operating Margin (GAAP)

 

This quarter, HEICO generated an operating profit margin of 22%, up 1.9 percentage points year on year. This increase was a welcome development and shows it was recently more efficient because its expenses grew slower than its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

HEICO’s EPS grew at a decent 8.4% compounded annual growth rate over the last five years. Despite its operating margin expansion during that time, this performance was lower than its 13.8% annualized revenue growth, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.

HEICO Trailing 12-Month EPS (GAAP)
HEICO Trailing 12-Month EPS (GAAP)

 

Diving into the nuances of HEICO’s earnings can give us a better understanding of its performance. A five-year view shows HEICO has diluted its shareholders, growing its share count by 2.2%. This dilution overshadowed its increased operating efficiency and has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

HEICO Diluted Shares Outstanding
HEICO Diluted Shares Outstanding

 

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For HEICO, its two-year annual EPS growth of 24.9% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q4, HEICO reported EPS at $1.20, up from $0.82 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects HEICO’s full-year EPS of $4.04 to grow 9.8%.

Key Takeaways from HEICO’s Q4 Results

Revenue, EBITDA, and EPS all beat by pretty convincing amounts this quarter. Zooming out, we think this was a solid quarter. The stock traded up 6.7% to $242.99 immediately after reporting.

HEICO put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.

News Team by — February 28, 2025 By News Team in Equities
Today’s ‘economic blackout’ began from an unlikely source. But it’s tapped into Americans’ anger

In early February, John Schwarz, a self-described “mindfulness and meditation facilitator,” proposed a 24-hour nationwide “economic blackout” of major chains on the last day of the month. Schwarz urged people to forgo spending at Amazon, Walmart, and all other major retailers and fast-food companies for a day. He called on them to spend money only at small businesses and on essential needs. “The system has been designed to exploit us,” said Schwarz, who goes by “TheOneCalledJai” on social media, in a video to his roughly 250,000 followers on Instagram and TikTok. “On February 28, we are going to remind them who really holds the power. For one day, we turn it off.” Schwarz, 57, has no background in social or political organizing. Until early this year, he almost exclusively posted videos of himself offering inspirational messages and motivational tips sitting in his home, backyard and shopping mall parking lots. He had low expectations for his boycott message gaining traction. “I thought maybe a handful of my followers would do it,” he told CNN in a phone interview this week. Instead, Schwarz’s call rapidly spread online. His video has been shared more than 700,000 times on Instagram and viewed 8.5 million times. Celebrities such as Stephen King, Bette Midler and Mark Ruffalo have encouraged people to participate. Reporters wrote and aired TV pieces about the boycott, propelling it further. The “economic blackout” effort is relatively uncoordinated and nebulous. Experts on consumer boycotts and corporate strategy are dubious that it will make a dent in the bottom lines of the massive companies it targets, let alone the vast US economy. Effective boycotts are typically well organized, make clear and specific demands and are focused on one company or issue. But this boycott has gained strength online because it has captured visceral public anger with the American economy, corporations and politics. “There’s the sense that a lot of people want to do something. Doing something in the American context has often meant using pocketbook politics,” said Lawrence Glickman, a historian at Cornell University and author of “Buying Power: A History of Consumer Activism in America.” “This a way of engaging in a form of collective action outside of the electoral arena that makes people feel some connection and sense of potential power.”
News Team by — February 28, 2025 By News Team in Business News
Spectre of Trump’s tariffs hammers risk currencies, crypto

SINGAPORE, Feb 28 (Reuters) – Investors unnerved by the prospect of U.S. President Donald Trump’s impending tariffs drove a wave of selling on Friday in risk-sensitive currencies such as the Aussie, sent bitcoin tumbling and gave safe-haven support to the dollar. On Thursday Trump said his proposed tariffs of 25% on Mexican and Canadian goods would take effect on March 4 along with an extra 10% duty on Chinese imports, defying expectations of those who hoped for a further delay in the levies. The risk-off moves gathered steam during the trading session, with cryptocurrencies among the biggest losers for the day as bitcoin slid more than 5% to bottom at $79,125.53, its weakest level since November 11. Ether similarly tumbled more than 5% to an over 13-month low of $2,099.37. The two tokens were on track for their steepest monthly falls since June 2022, following a towering rally late last year on optimism that the Trump administration would be a boon for the asset class. “Bitcoin’s fall below $80,000 shows that positive sentiments from a crypto-friendly administration and high-profile endorsements have run their course,” said Joshua Chu, co-chair of the Hong Kong Web3 Association. “It’s clear bitcoin is a risk asset, not the inflation hedge or digital gold it’s often touted to be.” In the broader market, the Aussie slid 0.4% to its lowest in more than three weeks at $0.62105, extending a decline of 1% from the previous session. It was on track for a weekly loss of nearly 2%. The New Zealand dollar similarly fell more than 0.5% to $0.5599 and was set to shed 1.9% for the week. The euro struggled at a two-week low of $1.0380 and was also headed for a weekly fall of 0.6%, which would put its monthly gain at just 0.35%. “Markets were shaken out of tariff complacency,” said Sim Moh Siong, currency strategist at Bank of Singapore. “We continue to see scope for some U.S. dollar strength if tariff risks materialise by April even as our conviction that the U.S. dollar can strengthen meaningfully is now reduced given cracks in the U.S. exceptionalism story.” The Canadian dollar slipped to a more than three-week low of C$1.4452, as it heads for a weekly decline of 1.5%. The greenback’s moves against the Chinese yuan were more muted as it was little changed at 7.2846, after rising to a two-week top of 7.2914 earlier in the session. “Ahead of China’s most important political event next week, investors are likely staying clear of the yuan as (the People’s Bank of China) would likely intervene to ensure the yuan’s stability,” said Alex Loo, FX and macro strategist at TD Securities. Against a basket of currencies, the greenback struck a two-week top of 107.42 , extending its 0.8% jump on Thursday. Still, the index was on track for a monthly loss of more than 1%, its worst since August, as the dollar faces downward pressure amid worries over the health of the world’s largest economy. A raft of weaker-than-expected economic data has led traders to ramp up bets for more Federal Reserve rate cuts this year, in turn sending U.S. Treasury yields lower and proving a drag on the dollar. “For now, it’s the growth story that is dominating, pushing yields lower, while at the same time, we’re starting to see a little bit of an increase in volatility in markets in general and that risk aversion as well,” said Rodrigo Catril, senior currency strategist at National Australia Bank. Elsewhere, sterling fell 0.17% to $1.2580, but was set to end the month with a gain of more than 1.6% for its best performance in five months. The pound has partly been supported by expectations for relatively fewer rate cuts from the Bank of England than some other central banks, namely the European Central Bank. The yen fell 0.1% to 149.91 per dollar . Still, the Japanese currency was set to rise 3.5% for the month, its best since last July, on heightened bets of more rate hikes this year by the Bank of Japan (BOJ). Core consumer prices in Tokyo slowed in February, but kept well above the BOJ’s 2% target, data showed on Friday.
News Team by — February 28, 2025 By News Team in Business News
Since Trump took office, stocks are down and bitcoin has plunged. What’s going on?

Investors entered the New Year cheerful about the prospects of a business- and crypto-friendly Trump administration. Yet two months into 2025, US stocks have lagged Europe and Chinese stocks, bitcoin is sliding and concerns about inflation are mounting.

US stocks largely slid Tuesday as investors digested a poor outlook from a consumer confidence survey that showed heightened concern about inflation. The Conference Board’s consumer confidence index saw its largest monthly decline since August 2021.

The Dow wavered Tuesday morning but closed at 43,621, or 0.37% higher, after rising in afternoon trading. The benchmark S&P 500 closed lower by about 0.47% and the tech-heavy Nasdaq Composite slid 1.35%.

US stocks had rallied after Trump’s reelection in November and the S&P 500 closed at a record high just last week. Yet US markets are fretting as signs of lingering inflation are on the rise and uncertainty around Trump’s trade and tariff policy persists. Investor sentiment on Tuesday moved into extreme fear territory for the first time since December, according to CNN’s Fear & Greed Index.

As investors brace for uncertainty, they are likely moving away from stocks into safer assets like government bonds and dumping risky assets like cryptocurrencies: Bitcoin, which surged as high as $106,000 around Trump’s inauguration, is down about 16% in the past month, trading around $88,000 on Tuesday.

The yield on the 10-year US Treasury slid to 4.29% on Tuesday as investors piled into bonds, signaling concerns about uncertainty and weaker-than-expected economic growth.

Walmart, a bellwether for the US economy, spooked investors last week after it signaled slower sales in 2025 than previously expected.

The VIX, Wall Street’s fear gauge, surged Tuesday to its highest level this year before retreating.

While US stocks might be stretched, global markets are shining. Europe’s STOXX 600 Index has gained almost 10% this year. In China, equities continue to outperform the US.

“The release of DeepSeek’s LLM has reignited interest in China tech (now up over 35% from its January low), while the developments around Ukraine are triggering a surge in performance for European tech companies and companies exposed to potential reconstruction,” analysts at Goldman Sachs said in a February 25 note.

Testing the bull market

The Dow and the broader S&P 500 have gained since Trump’s reelection in November and are still slightly in the green since the start of 2025.

Yet the S&P 500 posted back-to-back gains of more than 20% in 2023 and 2024, raising questions about whether the bull rally can continue in 2025.

Tech stocks, which pushed US indexes higher in 2024, have wavered in recent days. Nvidia (NVDA), Palantir (PLTR) and Tesla (TSLA) were leading the selloff in stocks on Tuesday. Palantir, a star of 2024, has fallen about 30% in the past five days.

Tesla shares tumbled 8.4% on Tuesday, bringing the company’s market value below the $1 trillion mark.

Two out of three traders believe the market is overvalued, according to Charles Schwab’s quarterly trader client sentiment survey. Yet bullish traders still outnumber bearish traders 51% to 34%.

“It’s clear that the majority of traders believe there’s some froth in the market, but on balance they also feel like there’s still more room for the bulls to run,” said James Kostulias, head of trading services at Charles Schwab.

While there is looming uncertainty, some strategists think fundamentals like strong corporate earnings will drive stocks higher.

“While we continue to expect volatility ahead as investors grapple with the potential impact of Trump’s proposed policies, we believe markets are likely to refocus on fundamentals that should support the equity rally further,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, in a note Tuesday.

News Team by — February 27, 2025 By News Team in World News
‘No Amazon, no Walmart, no fast food’: What’s behind the ‘Feb. 28 economic blackout’

A grassroots organization is calling on Americans to participate in what it’s calling the “Feb. 28 economic blackout” by refraining from buying goods from major retailers for 24 hours.

The nationwide protest comes amid rising prices on everything from gas to groceries — including, notably, eggs — and is similar to social media-fueled economic efforts that have cropped up online in recent months, including the “No Buy 2025” challenge against overconsumption.

Who’s behind the Feb. 28 blackout?

The Feb. 28 boycott is an initiative by the People’s Union USA, a self-described “grassroots movement dedicated to economic resistance, government accountability and corporate reform.”

The group, founded by John Schwarz, says it is not affiliated with any political party. According to the organization’s website, its goal is “to unite Americans against the corruption and greed that has kept us struggling for decades.”

The daylong boycott has been promoted online by several celebrities, including John Leguizamo, Stephen King and Bette Midler.

What’s the goal of the boycott?

“For our entire lives, they have told us we have no choice, that this is just how things are, that we have to accept these insane prices, the corporate greed, the billionaire tax breaks, all while we struggle just to get by,” Schwarz said in a recent Instagram video. “For one day, we are going to finally turn the tables.”‘

According to Schwarz, the idea is to halt all purchases from big corporations, both in store and online, from 12 a.m. through 11:59 p.m. on Friday, Feb. 28.

“No Amazon, no Walmart, no fast food, no gas,” he said. “Not a single unnecessary dollar spent.”

What about medicine or emergency supplies?

On its website, the group is urging consumers to not spend money on “non-essential” items.

For essential purchases like food, medicine, or emergency supplies, Schwarz is encouraging participants to buy them from a local small business rather than a big-box retailer.

“Do not go out and shop at any big, major store,” Schwarz said in the video. “If you have to, go to the local pizza place, the small local boutique.”

Blackout targets all major retailers

Some supporters of the blackout have suggested boycotting specific corporations that have ended their diversity, equity and inclusion programs following President Trump’s executive order targeting DEI initiatives. But while the People’s Union calls the abandonment of DEI programs “regressive and unacceptable,” the Feb. 28 boycott is aimed at all major retailers, regardless of their stance on DEI.

“If we disrupt the economy for just ONE day, it sends a powerful message,” the organization said on its website.

What happens after Feb. 28?

Schwarz told USA Today earlier this month that he hopes to boycott other businesses “that are really the biggest offenders within the system.”

The People’s Union is already planning weeklong blackouts aimed at specific retailers, including Amazon, Target and Walmart.

The first, targeting Amazon, is scheduled to begin March 7.

News Team by — February 27, 2025 By News Team in World News
Gold prices slip, investors eye upcoming US PCE data

Gold prices eased on Wednesday after a recent record rally, while investors looked towards inflation data due later this week and the latest developments on U.S. President Donald Trump’s tariff plans. Spot gold fell 0.1% to $2,912.51 an ounce as of 01:49 p.m. ET (1849 GMT). Bullion, a preferred hedge against uncertainty and inflation, hit a record high of $2,956.15 on Monday amid trade war concerns emerging from tariff threats. U.S. gold futures settled 0.4% higher at $2,930.60. On Tuesday, Trump ordered a probe into potential new, opens new tab tariffs on copper imports to rebuild U.S. production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods. “Bullish trend is still in place… We are not surprised by a period of consolidation ahead of some piece of important data,” said David Meger, director of metals trading at High Ridge Futures. Investors’ focus was also on the U.S. Personal Consumption Expenditures (PCE) report, the Federal Reserve’s preferred inflation gauge, due on Friday. Higher than expected inflationary pressures could delay further rate cuts, which is priced in; gold is one of the quintessential hedges against those inflationary pressures, so it should gain more, Meger added. The U.S. central bank reduced the interest rate three times in the previous year, amounting to a total cut of 75 basis points. Money markets are currently pricing 54 bps of Fed rate cuts by the year-end, which implies two 25 bps easing moves and around a 20% chance of an additional cut. “Central bank behaviour will be key to gold’s fortunes, as they have been an important element for demand in recent years,” Frank Watson, market analyst at Kinesis Money, said in a note. Spot silver rose 0.3% to $31.81, platinum fell 0.1% to $965.55 and palladium was down 0.9% at $919.50.
News Team by — February 27, 2025 By News Team in Market Watch
Wall Street rises just enough to break its 4-day losing streak

U.S. stock indexes drifted to a mixed finish Wednesday after climbing in the morning but then running out of steam. The Standard & Poor’s 500 finished an iota higher, less than 0.1%, after surrendering virtually all of its early gain of 0.9%. But that was just enough to break a four-day losing streak that had knocked the index off its all-time high. The Dow Jones industrial average fell 188 points, or 0.4%, and the Nasdaq composite rose 0.3%. The stock market has generally been struggling after some weaker-than-expected reports on the economy, including a couple that showed U.S. households are getting more pessimistic about inflation and tariffs pushed by President Trump. Some of the harshest drops hit Big Tech and other high-growth stocks, whose incredible momentum had earlier seemed unstoppable. Super Micro Computer, one of the stocks that’s soared in the frenzy around artificial-intelligence technology, lost nearly a quarter of its value over four days, for example. But it jumped 12.2% Wednesday after filing its annual report for its fiscal year that ended in June. The company, which sells servers used in AI, had delayed filing its annual report and other required forms after its former accounting firm raised concerns about some of its financial reporting and governance. Super Micro then had to get extensions from Nasdaq to file the financial reports as it conducted a review and hired another public accounting firm. Much of the market’s attention remained on Nvidia, the chip company that’s become a symbol of the AI rush. It rose 3.7% ahead of its latest profit report, which arrived after trading ended for the day. It was the first earnings report for the company and its chief executive, Jensen Huang, since a Chinese upstart, DeepSeek, upended the AI industry by saying it developed a large language model that can compete with big U.S. rivals without having to use the most expensive chips. That called into question all the spending Wall Street assumed would go into not only Nvidia’s chips but also the ecosystem that’s built around the AI boom, including electricity to power large data centers. Some Big Tech companies have since said they still plan to invest billions of dollars in AI, an encouraging signal for the industry. NRG Energy jumped 10.6% Wednesday after announcing it’s joining with GE Vernova and a subsidiary of Kiewit on a venture to produce more electricity for generative AI data centers. GE Vernova rose 5.5%. NRG also reported results for the latest quarter that topped analysts’ expectations. Most of the other companies in the S&P 500 have likewise been delivering better profits for the end of 2024 than analysts expected. Off-price retailer TJX rose 1.8% after joining the parade. The company behind TJ Maxx and Marshalls additionally said it plans to increase its dividend 13% and announced a program to buy up to $2.5 billion of its stock. Worries have been rising about whether U.S. shoppers may cut back on their spending given stubbornly high inflation and jitters about the economy’s prospects. But TJX CEO Ernie Herrman said his company has benefited from its off-price model and sees opportunities to grow over the long term. General Motors revved up by 3.7% after the automaker announced a program to buy back up to $6 billion of its stock. It will also send more cash to its shareholders by increasing its dividend. On the losing end of Wall Street, Advance Auto Parts tumbled 17.8% after the retailer said it made less profit from each $1 of revenue during the latest quarter than a year earlier, in part because of liquidation sales at stores it closed. Apple, meanwhile, was the heaviest weight on the S&P 500 after dropping 2.7%. All told, the S&P 500 inched up by 0.81 to 5,956.06. The Dow Jones Industrial Average fell 188.04 points to 43,433.12, and the Nasdaq composite climbed 48.88 to 19,075.26. In the bond market, Treasury yields fell again after dropping sharply in recent days on worries about the U.S. economy. The yield on the 10-year Treasury sank to 4.24% from 4.30% late Tuesday. It had been nearing 4.80% just last month. On Thursday, the U.S. Commerce Department will issue its third and final estimate of how the U.S. economy performed in the final three months of 2024. The economy still appears to be in solid shape, and growth is continuing, though uncertainty about the future is rising. Another report Friday will show how the gauge of inflation that the Federal Reserve prefers to use has been behaving. If reports were to show a stagnating economy and accelerating inflation, they could create a toxic mix that the Federal Reserve has few tools to fix. “Stagflation is the biggest risk looming over markets right now,” according to Mark Hackett, chief market strategist at Nationwide. In stock markets abroad, indexes rose across much of Europe and Asia. France’s CAC 40 climbed 1.2%, and Hong Kong’s Hang Seng jumped 3.3%.
News Team by — February 27, 2025 By News Team in Market Watch
Albany (NYSE:AIN) Misses Q4 Revenue Estimates

Industrial equipment and engineered products manufacturer Albany (NYSE:AIN) missed Wall Street’s revenue expectations in Q4 CY2024, with sales falling 11.3% year on year to $286.9 million. The company’s full-year revenue guidance of $1.22 billion at the midpoint came in 6% below analysts’ estimates. Its non-GAAP profit of $0.58 per share was 12% below analysts’ consensus estimates.

Is now the time to buy Albany? Find out in our full research report.

Albany (AIN) Q4 CY2024 Highlights:

  • Revenue: $286.9 million vs analyst estimates of $299.5 million (11.3% year-on-year decline, 4.2% miss)

  • Adjusted EPS: $0.58 vs analyst expectations of $0.66 (12% miss)

  • Adjusted EBITDA: $218.9 million vs analyst estimates of $59.65 million (76.3% margin, significant beat)

  • Management’s revenue guidance for the upcoming financial year 2025 is $1.22 billion at the midpoint, missing analyst estimates by 6% and implying -1.3% growth (vs 8.1% in FY2024)

  • EBITDA guidance for the upcoming financial year 2025 is $250 million at the midpoint, below analyst estimates of $276.8 million

  • Operating Margin: 8.5%, down from 12.9% in the same quarter last year

  • Free Cash Flow Margin: 21%, up from 12.2% in the same quarter last year

  • Market Capitalization: $2.50 billion

“We continue to perform well in both our businesses, as evidenced by strong results at Machine Clothing and ongoing operational progress steered by new leadership at Engineered Composites,” said Gunnar Kleveland, President and Chief Executive Officer.

Company Overview

Founded in 1895, Albany (NYSE:AIN) is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.

General Industrial Machinery

Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand for general industrial machinery companies. Those who innovate and create digitized solutions can spur sales and speed up replacement cycles, but all general industrial machinery companies are still at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

Sales Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Albany’s 3.1% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the industrials sector and is a rough starting point for our analysis.

Albany Quarterly Revenue
Albany Quarterly Revenue

 

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Albany’s annualized revenue growth of 9% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

Albany Year-On-Year Revenue Growth
Albany Year-On-Year Revenue Growth

 

We can better understand the company’s revenue dynamics by analyzing its most important segments, Machine Clothing and Engineered Composites, which are 65.6% and 34.4% of revenue. Over the last two years, Albany’s Machine Clothing revenue (paper manufacturing belts) averaged 11.4% year-on-year growth while its Engineered Composites revenue (aerospace components) averaged 7.3% growth.

Looking ahead, sell-side analysts expect revenue to grow 3.2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.

Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend.

Operating Margin

Albany has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 15.7%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Albany’s operating margin decreased by 7.8 percentage points over the last five years. This raises an eyebrow about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

Albany Trailing 12-Month Operating Margin (GAAP)
Albany Trailing 12-Month Operating Margin (GAAP)

 

This quarter, Albany generated an operating profit margin of 8.5%, down 4.4 percentage points year on year. Since Albany’s gross margin decreased more than its operating margin, we can assume its recent inefficiencies were driven more by weaker leverage on its cost of sales rather than increased marketing, R&D, and administrative overhead expenses.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Albany, its EPS declined by 5% annually over the last five years while its revenue grew by 3.1%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Albany Trailing 12-Month EPS (Non-GAAP)
Albany Trailing 12-Month EPS (Non-GAAP)

 

Diving into the nuances of Albany’s earnings can give us a better understanding of its performance. As we mentioned earlier, Albany’s operating margin declined by 7.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Albany, its two-year annual EPS declines of 9.5% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q4, Albany reported EPS at $0.58, down from $1.22 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Albany’s full-year EPS of $3.17 to grow 21.3%.

Key Takeaways from Albany’s Q4 Results

We were impressed by how significantly Albany blew past analysts’ EBITDA expectations this quarter. On the other hand, its full-year revenue guidance missed significantly and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 2.1% to $77.20 immediately following the results.

Albany underperformed this quarter, but does that create an opportunity to invest right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

News Team by — February 27, 2025 By News Team in Equities
AMC Entertainment (NYSE:AMC) Beats Q4 Sales Targets

Theater company AMC Entertainment (NYSE:AMC) announced better-than-expected revenue in Q4 CY2024, with sales up 18.3% year on year to $1.31 billion. Its non-GAAP loss of $0.18 per share was 10.2% below analysts’ consensus estimates.

Is now the time to buy AMC Entertainment? Find out in our full research report.

AMC Entertainment (AMC) Q4 CY2024 Highlights:

  • Revenue: $1.31 billion vs analyst estimates of $1.29 billion (18.3% year-on-year growth, 1.6% beat)

  • Adjusted EPS: -$0.18 vs analyst expectations of -$0.16 (10.2% miss)

  • Adjusted EBITDA: $164.8 million vs analyst estimates of $128.8 million (12.6% margin, 27.9% beat)

  • Operating Margin: 0.4%, up from -13.6% in the same quarter last year

  • Free Cash Flow was $113.9 million, up from -$149.9 million in the same quarter last year

  • Market Capitalization: $1.45 billion

Company Overview

With a profile that was raised due to meme stock mania beginning in 2021, AMC Entertainment (NYSE:AMC) operates movie theaters primarily in the US and Europe.

Leisure Facilities

Leisure facilities companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted their spending from “things” to “experiences”. Leisure facilities seek to benefit but must innovate to do so because of the industry’s high competition and capital intensity.

Sales Growth

A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Over the last five years, AMC Entertainment’s demand was weak and its revenue declined by 3.3% per year. This was below our standards and is a sign of lacking business quality.

AMC Entertainment Quarterly Revenue
AMC Entertainment Quarterly Revenue

 

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. AMC Entertainment’s annualized revenue growth of 8.9% over the last two years is above its five-year trend, but we were still disappointed by the results. Note that COVID hurt AMC Entertainment’s business in 2020 and part of 2021, and it bounced back in a big way thereafter.

AMC Entertainment Year-On-Year Revenue Growth
AMC Entertainment Year-On-Year Revenue Growth

 

This quarter, AMC Entertainment reported year-on-year revenue growth of 18.3%, and its $1.31 billion of revenue exceeded Wall Street’s estimates by 1.6%.

Looking ahead, sell-side analysts expect revenue to grow 10.8% over the next 12 months. While this projection suggests its newer products and services will spur better top-line performance, it is still below average for the sector.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Cash Is King

Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

While AMC Entertainment posted positive free cash flow this quarter, the broader story hasn’t been so clean. Over the last two years, AMC Entertainment’s demanding reinvestments to stay relevant have drained its resources, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 7.8%, meaning it lit $7.80 of cash on fire for every $100 in revenue.

AMC Entertainment Trailing 12-Month Free Cash Flow Margin
AMC Entertainment Trailing 12-Month Free Cash Flow Margin

 

AMC Entertainment’s free cash flow clocked in at $113.9 million in Q4, equivalent to a 8.7% margin. Its cash flow turned positive after being negative in the same quarter last year, but we wouldn’t put too much weight on the short term because investment needs can be seasonal, causing temporary swings. Long-term trends are more important.

Over the next year, analysts predict AMC Entertainment will continue burning cash, albeit to a lesser extent. Their consensus estimates imply its free cash flow margin of negative 6.4% for the last 12 months will increase to negative 2.5%.

Key Takeaways from AMC Entertainment’s Q4 Results

We were impressed by how significantly AMC Entertainment blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its EPS missed significantly. Zooming out, we think this was a decent quarter featuring some areas of strength but also some blemishes. The stock traded up 4.6% to $3.43 immediately following the results.

Is AMC Entertainment an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.

News Team by — February 27, 2025 By News Team in Equities
Nvidia earnings, outlook top Wall Street forecasts as CEO Jensen Huang touts ‘light speed’ AI advances

Nvidia (NVDA) reported its fourth quarter earnings after the bell on Wednesday, beating analysts’ expectations on the top and bottom lines and issuing solid Q1 guidance. Nvidia’s stock was up as much as 2% on the news; near 6:00 p.m. ET, the stock was up closer to 0.7%. Nvidia’s earnings come as the company girds itself for potential 25% tariffs on chips imported into the US and the threat of increased export controls on its shipments to China. The AI giant is also contending with the fallout from claims that Chinese startup DeepSeek developed its AI models using less powerful Nvidia chips than its US rivals, putting into question whether Big Tech companies are over-investing in AI. For the quarter, Nvidia reported earnings per share (EPS) of $0.89 on revenue of $39.3 billion. Wall Street was expecting EPS of $0.84 on revenue of $38.2 billion. The company said it expects Q1 revenue of $43 billion plus or minus 2%, better than the $42.3 billion expected. Data center revenue clocked in at $35.6 billion versus expectations of $34 billion in the quarter. “We’ve successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter,” CEO Jensen Huang said in a statement. “AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionize the largest industries.” According to Nvidia CFO Colette Kress, cloud service providers made up 50% of Nvidia’s data center revenue in the quarter. The company reported similar results in Q3. The company’s Blackwell line of chips contributed billions in sales for the quarter, Kress said. “We delivered $11.0 billion of Blackwell architecture revenue in the fourth quarter of fiscal 2025, the fastest product ramp in our company’s history.” Nvidia’s gaming revenue, however, fell 11% year over year in Q4 due to supply constraints around its latest gaming chips. Nvidia is the reigning champion of AI chips, and it’s not losing that crown anytime soon. Its chips are the envy of Silicon Valley and beyond, and its competitors are still far from overtaking its performance advantage. Big Tech companies Amazon (AMZN), Google (GOOG, GOOGL), Meta (META), and Microsoft (MSFT) are spending billions of dollars building out their AI data centers, and a chunk of that is going straight to Nvidia. But shares of those same companies are also struggling in the early months of 2025. Google parent Alphabet is off more than 8% year to date, Amazon is down 2.5%, Microsoft has fallen 5.3%, and Apple (AAPL) has dropped more than 4%. Meta is the sole outlier in the group, with shares up over 14%. Huang also alluded to fears that DeepSeek’s AI models, which were developed using lower-powered Nvidia chips while still matching the performance of top US-made AI models, would hurt Nvidia’s sales. “Demand for Blackwell is amazing as reasoning AI adds another scaling law — increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter,” he said. Nvidia is staring down President Trump’s threat of 25% tariffs on chips imported into the US, which could force it to either raise prices or eat some of the cost of the tariffs, cutting into margins. Nvidia works with TSMC to build its processors, which produces many of those chips in Taiwan. Trump has also threatened to put further export restrictions on Nvidia chips destined for China, which would cut into the company’s revenue from the region. Wall Street has also raised concerns about the impact of Amazon, Google, Microsoft, and Meta using their own custom AI chips versus those developed by Nvidia. If those companies’ chips can match Nvidia’s in performance, the thinking goes, they’ll be less dependent on Nvidia’s offerings. But Morgan Stanley Research analyst Joseph Moore cautioned overreacting to the potential of these ASICS, or application-specific integrated circuits. “Spending time with 20-25 Nvidia alternatives over the years, most of which failed to get traction, we saw initial enthusiasm based on price and potential performance, which [brought] an initial deployment,” Moore wrote. “Then there is almost always a pull back to Nvidia, which has the most mature ecosystem, and the alternatives are put on hold, sometimes never to return.” Google’s and Amazon’s chips have proven to be the exception to that rule so far, but Moore says Nvidia is still gaining share in the AI space.
News Team by — February 27, 2025 By News Team in Business News