Astronics vs. Heico: Which Aerospace Services Stock Offers More Upside?

Rising air passenger traffic worldwide, driving global fleet size, along with ageing aircraft pushing up demand for aftermarket services, is boosting demand for aerospace service stocks like Astronics Corporation ATRO and HEICO Corporation HEI. At the same time, escalating geopolitical tensions are driving higher defense budgets worldwide, increasing demand for advanced avionics, electronics and power systems for combat aircraft supplied by these companies.Together, expanding global fleet, defense modernization and technological innovations are key growth drivers for aerospace services stocks like ATRO and HEI.Astronics specializes in designing and producing advanced technologies in electrical power, lighting, connectivity and cabin electronics, catering to both commercial airlines and military clients. HEICO, on the other hand, stands out as one of the largest independent aerospace parts manufacturers globally and a key supplier of jet engines and aircraft components.With aerospace electrification, digitalization and worldwide fleet expansion capturing investor attention, the key question is: Which of these two aerospace service providers is better positioned to deliver stronger returns and long-term resilience? A closer look at the fundamentals of ATRO and HEI can help investors assess which stock may hold greater upside potential.Financial Stability & Future Growth Drivers: ATRO vs. HEIAstronics ended June 2025 with a cash and cash equivalent of $13 million. While its long-term debt totaled $159 million, as of June 2025-end, its current debt was nil. So, it is safe to conclude that the stock boasts a solid liquidity position, which should enable it to duly meet its capital expenditure target of $40-$50 million in 2025. A major part of this investment is expected to be dedicated to new product innovations, effectively expanding core competencies in its existing business. This financial stability should also bolster ATRO’s strategy of enhancing its value through strategic acquisitions.In contrast, Heico’s cash and cash equivalents, as of July 31, 2025, totaled $0.26 billion, which improved sequentially. The company’s long-term debt, as of July 31, 2025, was $2.44 billion, while its current debt was $0.04 billion. This shows that Heico is in a strong financial position in the short term, giving it the flexibility to keep pursuing its steady acquisition strategy, which has been central to its growth.When it comes to growth drivers, the steadily rising global air passenger traffic over the past few quarters has been boosting the top line for both ATRO and HEI. Consequently, Astronics reported a 3.3% year-over-year increase in sales in the second quarter of 2025, supported in part by a strong 13% rise in sales to the commercial transport market. Meanwhile, Heico’s Flight Support Group posted a robust 18% sales growth in the fiscal third quarter of 2025, driven by continued growth and momentum in its aerospace aftermarket business.Sales growth in defense-related aerospace parts and equipment, supported by the rising trend of defense product acquisitions worldwide, has also added to the top-line performance of both ATRO and HEI. For Astronics, military sales rose 11% year over year in the second quarter of 2025, driven by higher demand for lighting and safety products. Similarly, higher demand for defense products played an important role in driving a 7% organic sales increase in Heico’s Electronic Technologies Group during the fiscal third quarter of 2025.Risks of Investing in ATRO vs. HEIBoth Astronics and Heico face industry-specific risks that a prudent investor should keep in consideration before making any strategic decision.One such risk is persistent supply-chain disruption. In 2025, although Boeing and Airbus announced their plan to increase aircraft production compared with 2024, growth remains below pre-pandemic levels due to ongoing supply-chain disruptions impacting key component suppliers like ATRO and HEI. As Boeing and Airbus are major aerospace OEM clients, limited parts availability and assembly delays could constrain demand for specialized equipment, potentially slowing commercial aerospace-related revenue growth for ATRO and HEI.Additionally, heightened U.S. import tariffs on many trading partners, imposed this year, threaten to disrupt global trade, further straining supply chains and potentially affecting commercial operations for both companies. These factors pose near-term challenges despite long-term growth opportunities in the aerospace services industry.How do Zacks Estimates Compare for ATRO & HEI?The Zacks Consensus Estimate for ATRO’s 2025 sales and earnings per share (EPS) implies an improvement of 7% and 46.8%, respectively, from the year-ago quarter’s reported figures. ATRO’s near-term EPS estimates have improved over the past 60 days.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for HEI’s fiscal 2025 sales and EPS implies an improvement of 14% and 28.1%, respectively, from the year-ago quarter’s reported figures. The stock’s near-term EPS estimates have improved over the past 60 days.Image Source: Zacks Investment ResearchStock Price Performance: ATRO vs. HEIATRO (up 28.9%) has outperformed HEI (up 0.9%) over the past three months. Also, in the past year, ATRO has outperformed HEI. While ATRO’s shares surged 111.9%, HEI rose 20.5%.Image Source: Zacks Investment ResearchAstronics’ Valuation More Attractive Than HeicoAstronics is trading at a discount, with its forward 12-month price/earnings of 21.55X being lower than HEI’s forward price/earnings of 61.87X.ATRO Less Leveraged Than HEIATRO has a lower long-term debt-to-capital ratio of 36.97, while HEI’s ratio is 40.62, indicating ATRO carries less debt.ATRO’s ROE Better Than HEIA comparison of Return on Equity (ROE) shows that ATRO is more efficient at generating profits from its equity, with an ROE of 22.89% compared with HEI’s 16.29%.Image Source: Zacks Investment ResearchConclusionThe rising global air traffic, expanding fleet and increasing defense spending should continue to drive solid demand for aerospace service stocks like Astronics and Heico.While both companies report healthy revenue and earnings growth estimates, Astronics’ attractive valuation metrics with a lower forward P/E compared with Heico's and also a better ROE alongside lower leverage make it a more compelling investment option for investors looking for balanced long-term growth and value.ATRO currently carries a Zacks Rank #2 (Buy) at present, while HEI carries a Zacks Rank #3 (Hold). 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Click to get this free report Astronics Corporation (ATRO): Free Stock Analysis Report Heico Corporation (HEI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks