All Posts in "George"

Q4 Earnings Roundup: Caterpillar (NYSE:CAT) And The Rest Of The Construction Machinery Segment

Let’s dig into the relative performance of Caterpillar (NYSE:CAT) and its peers as we unravel the now-completed Q4 construction machinery earnings season.

Automation that increases efficiencies and connected equipment that collects analyzable data have been trending, creating new sales opportunities for construction machinery companies. On the other hand, construction machinery companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the commercial and residential construction that drives demand for these companies’ offerings.

The 4 construction machinery stocks we track reported a slower Q4. As a group, revenues missed analysts’ consensus estimates by 1.4%.

While some construction machinery stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.6% since the latest earnings results.

Weakest Q4: Caterpillar (NYSE:CAT)

With its iconic yellow machinery working on construction sites, Caterpillar (NYSE:CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.

Caterpillar reported revenues of $16.22 billion, down 5% year on year. This print fell short of analysts’ expectations by 2%. Overall, it was a softer quarter for the company with a significant miss of analysts’ adjusted operating income estimates and a miss of analysts’ organic revenue estimates.

“I’m proud of our global team’s strong performance in 2024 as they delivered record adjusted profit per share and strong ME&T free cash flow,” said Caterpillar Chairman and CEO Jim Umpleby.

Caterpillar Total Revenue
Caterpillar Total Revenue

Caterpillar delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 13.4% since reporting and currently trades at $340.48.

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

Best Q4: Astec (NASDAQ:ASTE)

Inventing the first ever double-barrel hot-mix asphalt plant, Astec (NASDAQ:ASTE) provides machines and equipment for building roads, processing raw materials, and producing concrete.

Astec reported revenues of $359 million, up 6.5% year on year, falling short of analysts’ expectations by 4%. However, the business still had a strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Astec Total Revenue
Astec Total Revenue

Astec achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 14.8% since reporting. It currently trades at $35.85.

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

Terex (NYSE:TEX)

With humble beginnings as a dump truck company, Terex (NYSE:TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.

Terex reported revenues of $1.24 billion, up 1.5% year on year, exceeding analysts’ expectations by 0.8%. Still, it was a slower quarter as it posted full-year EBITDA guidance missing analysts’ expectations.

As expected, the stock is down 14.5% since the results and currently trades at $41.02.

Manitowoc (NYSE:MTW)

Contracted by the United States Navy during WWII, Manitowoc (NYSE:MTW) provides cranes and lifting equipment.

Manitowoc reported revenues of $596 million, flat year on year. This result met analysts’ expectations. Taking a step back, it was a slower quarter as it logged a significant miss of analysts’ EPS and backlog estimates.

The stock is up 6.5% since reporting and currently trades at $10.44.

George by — March 01, 2025 By George in Equities
Simply Wall St. The Home Depot, Inc. (NYSE:HD) Just Released Its Full-Year Earnings: Here’s What Analysts Think

NYSE:HD Earnings and Revenue Growth February 27th 2025

Last week saw the newest full-year earnings release from The Home Depot, Inc. (NYSE:HD), an important milestone in the company’s journey to build a stronger business. Home Depot reported in line with analyst predictions, delivering revenues of US$160b and statutory earnings per share of US$14.91, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the current consensus from Home Depot’s 35 analysts is for revenues of US$164.3b in 2026. This would reflect a satisfactory 3.0% increase on its revenue over the past 12 months. Statutory per share are forecast to be US$14.86, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$164.3b and earnings per share (EPS) of US$15.57 in 2026. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at US$431, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. The most optimistic Home Depot analyst has a price target of US$484 per share, while the most pessimistic values it at US$292. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Home Depot shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Home Depot’s revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2026 being well below the historical 5.7% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.1% per year. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Home Depot.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$431, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have forecasts for Home Depot going out to 2028, and you can see them free on our platform here.

George by — March 01, 2025 By George in Equities
Wall Street ends higher after Zelenskiy and Trump clash

Wall Street ended higher on Friday after a choppy trading session, with Dell Technologies dipping and other tech stocks climbing after a meeting between the U.S. President Donald Trump and Ukrainian counterpart Volodymyr Zelenskiy ended in disaster. Zelenskiy and Trump traded verbal blows at the White House before the world’s media. This created fresh uncertainty over Ukraine’s war with Russia for investors already worried about sticky U.S. inflation and a tepid economy. The S&P 500 moved lower immediately after the clash before recovering and ending the day with a gain. Zelenskiy left the White House without signing a much-vaunted deal between Ukraine and the U.S. over the joint development of natural resources. “The news, if you watched it live, it was pretty worrisome. It got heated, and Zelenskiy is considered an ally of the U.S.,” said Adam Sarhan, chief executive at 50 Park Investments. “That’s why the market sold off, but then cooler heads prevailed. Zelenskiy either is going to make a deal or he’s not.” Dell (DELL.N), opens new tab dropped 4.7% after the PC maker forecast a decline in its adjusted gross margin rate for fiscal 2026. Peer HP Inc (HPQ.N), opens new tab fell 6.8% after its quarterly profit forecasts missed expectations. Nvidia <NVDA.O> and Tesla (TSLA.O), opens new tab rose almost 4% each and lifted the S&P 500. The S&P 500 climbed 1.59% to end the session at 5,954.50 points. The Nasdaq gained 1.63% to 18,847.28 points, while the Dow Jones Industrial Average rose 1.39% to 43,840.91 points. Volume on U.S. exchanges was heavy, with 17.5 billion shares traded, compared to an average of 15.4 billion shares over the previous 20 sessions. All 11 S&P 500 sector indexes rose, led by financials (.SPSY), opens new tab, up 2.1%, followed by a 1.8% gain in consumer discretionary (.SPLRCD), opens new tab. For the week, the S&P 500 fell about 1%, the Nasdaq lost 3.5% and the Dow climbed almost 1%. The Nasdaq lost about 4% for all of February, its deepest monthly loss since April 2024. The S&P 500 fell 1.45% for the month and the Dow lost 1.6%. Earlier, a Commerce Department report showed inflation rose in January in line with expectations. However, consumer spending, which accounts for more than two-thirds of the economy, dropped 0.2% after an upwardly revised 0.8% increase in December. This could complicate the Federal Reserve’s deliberations on monetary policy. “Spending came in lower than we were looking for… most of it I would attribute to a cooling economy, which presents a dilemma for the Fed in the sense that you still have inflation and you have an economy that is moving lower. If you add them together, that equals stagflation,” said Peter Cardillo, chief market economist at Spartan Capital Securities. Friday’s report is important for investors trying to gauge the next move for the central bank after policymakers reiterated a hawkish stance. Investors worry Trump’s policies, especially trade restrictions, could exacerbate U.S. inflation. “Tariff talk certainly is having a negative effect on the stock market, and it probably will keep a lid on stock market advances until there’s more clarity around that,” said Sam Stovall, chief investment strategist at CFRA Research. Traders see the Fed lowering borrowing costs twice by December, little changed from before the report, according to data compiled by LSEG. Investors will assess comments from Chicago Fed President Austan Goolsbee later in the day. The CBOE Volatility Index (.VIX), opens new tab, also known as Wall Street’s fear gauge, touched a one-month high and was last up at 21.26 points. Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX), opens new tab by a 7.1-to-one ratio. The S&P 500 posted 39 new highs and 14 new lows; the Nasdaq recorded 43 new highs and 332 new lows.
George by — March 01, 2025 By George in Business News
Economic blackout: Will a 24-hour boycott make a difference?

Protestors hold signs during a rally for a nationwide economic blackout Wednesday, Feb. 26, 2025, in Las Vegas. (AP Photo/John Locher)
NEW YORK (AP) — An “economic blackout” promoted on social media was underway Friday but with no clear indication of how many people took part or whether national retailers and restaurant chains noticed any effect from the grassroots protest. A fledgling activist group encouraged U.S. residents to refrain from spending for 24 hours as an act of resistance against what the group’s founder described as the malign influence of billionaires, big corporations and both major political parties on the lives of working Americans. The planned blackout started at 12 a.m. EST and was set to run through 11:59 p.m. EST. As of midday, any retrenchment on the part of consumers wasn’t visible, according to Marshal Cohen, chief retail advisor at market research firm Circana. The assessment was based on phone calls with retail executives and reports from his network of analysts monitoring malls and stores, Cohen said. “It doesn’t look like anybody’s really pulling back,” he said. “If you get 5% or 10% of the people that don’t shop, that could happen on any given day because of the rain.” Other groups and individuals are organizing longer boycotts to protest companies that have reduced their diversity, equity and inclusion initiatives, and to oppose President Donald Trump’s moves to abolish all federal DEI programs and policies.

Who’s behind the ‘24-hour Economic Blackout?’

The People’s Union USA, which takes credit for initiating the no-spend day, was founded only recently by John Schwarz, a meditation teacher who lives in the Chicago area, according to his social media accounts. The Associated Press did not receive a reply to requests for comment sent this week to the email address on the organization’s website. The website includes a link to a crowdfunding site where Schwarz requested help funding The People’s Union USA. As of late Friday afternoon, it showed well over $95,000 in donations, the vast majority in amounts $50 and under. The New York Times reported Friday afternoon that a biography in the “Meet the Founder” section of the website omitted information about Schwarz that many potential donors would have found off-putting: in 2007, a Connecticut judge sentenced him to 90 days in jail and five years’ probation for disseminating voyeuristic material. The AP could not immediately reach the Middlesex County criminal court clerk’s office to verify the court records the newspaper cited. The Times said Schwarz did not admit guilt with the plea he entered at the time but agreed the state had enough evidence to convict him and did not contest the charge. “This whole thing was a big scam,” he told the newspaper Friday. “It’s going to be expunged. … I did not do anything inappropriate to anybody.” The term “Blackout” previously was applied to a 2020 protest initiated by two Black women who wanted the music industry to take a day to talk about racism and how the industry profited off Black artists. They created a campaign under the hashtag #TheShowMustBePaused. Social media users joined in by posting black squares and pausing their feeds to show support for the Black Lives Matter movement. The People’s Union USA plans another broad-based economic blackout on March 28. It is also promoting weeklong consumer boycotts of specific retailers — Walmart and Amazon — as well as global food giants Nestle and General Mills.

Are people participating?

For his economic blackout, Schwarz advised participants to refrain from making any purchases either in stores or online, to shun fast food and to avoid filling their car gas tanks. Shoppers with emergencies or in need of essentials should support a local small business, he said. Many research firms weren’t tracking the event’s immediate impact on sales. Companies may comment eventually if the various boycotts have material business consequences. Some people posted videos on social media saying they weren’t making any store purchases Friday. Some users said they brewed their morning coffee at home, packed a lunch to take to work or bought items they needed ahead of time. Rachelle Biennestin, a first-grade teacher and TikTok content creator who lives near the Boston area, accepted the invitation not to shop Friday. She already was participating in “No Buy 2025,” a social media-driven trend that encourages participants to reduce personal over-consumption. Biennestin said she wanted to spend less money because major companies, such as Walmart, Amazon and Target, have backed away from their DEI commitments. She redirected her business to Costco, which has stood behind its diversity, equity and inclusion programs. “I’m not going to forget that they rolled back on DEI,” Biennestin said. “I’m going to remember that, and so will my wallet.” The no-spend day also received plenty of criticism online and inspired snarky suggestions for counter-protest shopping sprees. However, small businesses may have benefited from shoppers who decided to visit independent shops. Mischa Roy, who owns a tea and home goods shop in Northampton, Massachusetts called Spill the Tea Sis, had reduced staffing in case the blackout made Friday slow. Instead, sales were brisk, Roy said. “We are definitely seeing brand loyalty and small business loyalty,” she said.

What other boycotts are in the works?

A number of boycotts are in the works. An Atlanta-area pastor, the Rev. Jamal Bryant, organized a website called targetfast.org to recruit Christians for a a 40-day Target boycott starting March 5, which marks Ash Wednesday, the beginning of Lent. Other faith leaders have endorsed the protest. Target announced in January that it was ending its hiring, supplier recruitment and promotion goals for women, members of racial minority groups, LGBTQ+ people, veterans and people with disabilities. The discount retailer headquartered in Minneapolis previously had a reputation as an inclusion ally. The Rev. Al Sharpton, founder and president of the National Action Network, announced in late January that the civil rights organization would identify two companies in the next 90 days that will be boycotted for abandoning their DEI pledges.

Will the events have any impact?

Some retailers may feel a slight pinch from Friday’s broad “blackout.” Renewed inflation worries and Trump’s threat of tariffs on imported goods already have had an effect on consumer sentiment and spending. Anna Tuchman, a marketing professor at Northwestern University’s Kellogg School of Management, thinks the economic blackout will likely make a dent in daily retail sales but won’t be sustainable. “I think this is an opportunity for consumers to show that they have a voice on a single day,” she said. ”I think it’s unlikely that we would see long-run sustained decreases in economic activity supported by this boycott.” Other boycotts have produced different results. Tuchman studied the impact of a boycott against Goya Foods during the summer of 2020 after the company’s CEO praised Trump. Her research, based on data from research firm Numerator, found the brand saw a sales increase driven by first-time Goya buyers who were disproportionately from heavily Republican areas. However, the bump proved temporary; Goya had no detectable sales increase after three weeks, Tuchman said. It was a different story for Bud Light, which spent decades as America’s bestselling beer. Sales plummeted in 2023 after the brand sent a commemorative can to a transgender influencer. Bud Light’s sales still haven’t fully recovered, according to alcohol consulting company Bump Williams.
George by — March 01, 2025 By George in Business News
Average US rate on a 30-year mortgage falls for sixth-straight week to lowest level since December

The average rate on a 30-year mortgage in the U.S. eased for the sixth week in a row, a welcome boost in purchasing power for home shoppers just as the annual spring homebuying season gets going.

The average rate fell 6.76% from 6.85% last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.94%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. The average rate fell to 5.94% from 6.04% last week. A year ago, it averaged 6.26%, Freddie Mac said.

The steady decline in mortgage rates rates this year hasn’t been enough to change the affordability equation for many prospective home shoppers, especially first-time buyers who don’t have equity from an existing home to put toward a new home purchase.

Sales of previously occupied U.S. homes fell in January as rising mortgage rates and prices froze out many would-be homebuyers despite a wider selection of properties on the market.

New data on pending home sales, a bellwether for future completed sales, point to potentially further sales declines in coming months. They slid to an all-time low in January.

The average rate on a 30-year mortgage is now at its lowest level since Dec. 19, when it was also 6.72%. It briefly fell to a 2-year low last September, but has been mostly hovering around 7% this year. That’s more than double the 2.65% record low the average rate hit a little over four years ago.

“The drop in mortgage rates, combined with modestly improving inventory, is an encouraging sign for consumers in the market to buy a home,” said Sam Khater, Freddie Mac’s chief economist.

The inventory of U.S. homes on the market climbed last month to its highest level since June 2020, according to data from Redfin. But mortgage rates and prices remain an unaffordable combination for many would-be homebuyers.

Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions.

The latest pullback in rates echoes a decline in the 10-year Treasury yield, which lenders use as a guide for pricing home loans.

The yield, which was at 4.79% in mid-January, has been mostly easing since then, reflecting worries among bond investors over the potential impact from tariffs and other policies proposed by the Trump administration.

The 10-year yield was at 4.28% in midday trading Thursday.

George by — February 28, 2025 By George in World News
Core inflation in Japan’s capital slows but stays above BOJ target

TOKYO, Feb 28 (Reuters) – Core consumer prices in Japan’s capital rose 2.2% in February from a year earlier, data showed on Friday, slowing for the first time in four months due to revived energy subsidies but remaining well above the central bank’s 2% target.
The persistently high inflation will likely support the case for the central bank to continue its monetary policy tightening campaign.
“The slowdown mainly reflect reinstated subsidies to curb electricity and gas bills, but the underlying trend hasn’t changed with food prices remaining high,” said Kazutaka Maeda, an economist at Meiji Yasuda Research Institute.
“This underlying trend will justify further rate hikes by the BOJ,” he added.
The increase in the core consumer price index (CPI), which excludes volatile fresh food costs, was slower than a median market forecast of 2.3% and a 2.5% gain in January.
A separate index that strips away the effects of both fresh food and fuel costs, closely watched by the BOJ as a broader price trend indicator, rose 1.9% in February from a year earlier, advancing at the same pace as the previous month.
This chart depicts the core and core-core inflation levels in Tokyo across the time.
This chart depicts the core and core-core inflation levels in Tokyo across the time.
The Tokyo inflation figures are considered a leading indicator of nationwide trends.
The government in January reinstated electricity and gas subsidies, which was reflected in bills this month.
Upward price pressure could pick up again in a few months as the government plans to phase out the subsidies by the end of March.
Prices of food have also soared in recent months, prompting the government to order a release of stockpiled rice to farm cooperatives to bring down costs.
The yen’s recent strength may help push down import costs, but it usually takes a few months for foreign exchange rate movements to be reflected in prices.
Meanwhile, Tomoyuki Ota, chief economist at Mizuho Research & Technologies, noted that non-public service prices have been slow to rise.
“This shows that higher labour and energy costs have not been fully passed onto prices,” he said.
Services prices in non-public sectors rose 0.8% year-on-year in February, slower than a 0.9% gain in January.
Separate data from the Ministry of Economy, Trade and Industry showed Japan’s factory output fell 1.1% in January from the previous month, roughly in line with a median market forecast for a 1.2% decline.
Manufacturers surveyed by the ministry expect seasonally adjusted output to increase 5.0% in February and fall 2.0% in March.
The BOJ ended a decade of massive monetary stimulus last year and raised its short-term interest rate to 0.5% from 0.25% in January on the view that Japan was on the cusp of sustainably hitting its 2% inflation target.
BOJ Governor Kazuo Ueda has said the central bank will keep raising interest rates if Japan makes continued progress in durably achieving 2% inflation, solid wage growth and domestic demand.
George by — February 28, 2025 By George in World News
S&P 500 futures are little changed ahead of key inflation report: Live updates

Stock futures are little changed early Friday as investors looked to the end of a losing week and month and awaited key inflation data. Dow Jones Industrial Average futures lost 18 points, or less than 0.1%. S&P 500 futures and Nasdaq 100 futures rose 0.04% and 0.07% respectively. Those moves come as investors ready for the final trading day of the week and month on Friday. The technology-heavy Nasdaq Composite has led the way down, sliding around 5.5% in February due largely to a 5% drop this week. The S&P 500 has slid 2.5% week to date, while the Dow has seen more modest losses with a retreat of just 0.4% Both are down nearly 3% on the month. Traders have been rattled by President Donald Trump’s promise of tariffs and recent economic reports flashing warning signs. A decline of 8.5% in megacap tech titan Nvidia in Thursday’s session the back of earnings threw more cold water on investor sentiment. “February is seasonally a volatile period of time for stocks, and that historical trend is playing out right now,” said Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management. “Investors are in search of more clarity on tariffs, elevated inflation and the state of the consumer.” Investors on Friday will closely monitor January data for the personal consumption expenditures price index. Economists polled by Dow Jones expect the measure of price changes for consumers to rise 0.3% from December for an annualized gain of 2.5%. Excluding volatile food and energy prices, so-called core PCE is expect to increase by 0.3% month over month and 2.6% year over year. Economic data on personal income and consumer spending is also expected in the morning.
George by — February 28, 2025 By George in Market Watch
Nasdaq posts worst day in a month, S&P 500 turns negative for 2025 ahead of PCE inflation report

U.S. stocks lost their grip on earlier gains to end sharply lower Thursday, with the Nasdaq Composite posting its worst day in about a month and the S&P 500 turning negative for the year. The market’s jitters came ahead of a closely followed inflation update on Friday, and as concerns have risen over President Trump’s threats of fresh trade tariffs to start next week against Canada, Mexico and China. The Dow Jones Industrial Average shed 193.62 points, or 0.5%, ending at 43,239.50. The S&P 500 shed 94.49 points, or 1.6%, closing at 5,861.57 and turning negative for the year. The Nasdaq Composite plunged 2.8%, finishing at 18,544.42. That was its biggest one-day percentage decline since it tumbled 3.1% on Jan. 27, according to Dow Jones Market Data. Investors have been nervous not only about the potential impact that tariffs could have on inflation, but also on U.S. economic growth.
George by — February 28, 2025 By George in Market Watch
Carvana (NYSE:CVNA) Sees 4% Price Dip As US$660M Stock Registration Sparks Concerns

Carvana (NYSE:CVNA) recently announced its fourth quarter and full year earnings, showing significant growth in sales and a return to profitability with a net income of $79 million after a previous loss. However, the net income for the full year was $210 million, a decline from the previous year’s $450 million, which may have influenced investor sentiment. Alongside these financial results, Carvana’s filing of a shelf registration for $660 million in Class A Common Stock might have raised concerns about future share dilution among shareholders. These company-specific developments occurred against a backdrop of mixed market performance, as the broader U.S. stock market experienced fluctuations amid tariff announcements and tech stock volatility. The overall market dip of 3.6% over the past month was mirrored by Carvana’s share price decreasing by 3.93%, reflecting broader market uncertainties and company-specific challenges during this period.

Carvana’s shares delivered a remarkable total return of 208.24% over the last year. During this period, the company’s stock outperformed both the US market, which saw a 16.9% return, and the specialty retail industry, which achieved a 9.1% return. Several key events contributed to this performance. In July 2024, Carvana expanded its market reach by offering same-day vehicle delivery services in regions such as Las Vegas, Houston, and Kansas City. This strategic expansion helped cater to a broader customer base, potentially enhancing revenue streams.

Moreover, the company’s integration into the Russell 1000 Index on July 1, 2024, may have positively influenced investor perceptions, attracting more institutional attention. Earnings announcements throughout the year, including a swing to profitability with a US$79 million net income in Q4 2024, further strengthened investor confidence. However, the filing of a shelf registration in February 2025 for US$660 million in common stock hinted at potential future dilution, possibly tempering enthusiasm among some investors.

George by — February 28, 2025 By George in Equities
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.

George by — February 28, 2025 By George in Equities
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