Aerospace & Defense
All research in Aerospace & Defense — 15 reports.
HEICO got its start in FAA-PMA replacement parts and high-reliability electronics, and has turned the aviation aftermarket into a compounding growth platform through a steady cadence of tuck-in acquisitions. In FY2025 its two segments, Flight Support and Electronic Technologies, contributed roughly 3.117 billion and 1.413 billion dollars of revenue with first-rate quality; but at 331.61 dollars the stock trades near 50 times earnings, far above peer TransDigm at about 31 times, leaving almost no margin of safety. Rating Hold: a great company at an expensive price, worth buying back in the 235 to 260 dollar ideal-entry zone.
Airbus is one of the two dominant European-positioned civil aircraft makers, monetizing A320neo/A350 deliveries, lifecycle services, and defense and space programs. In 2025 it generated EUR 73.4 billion in revenue, EUR 4.57 billion in free cash flow before customer financing, and EUR 12.2 billion in net cash, but weak Q1 2026 deliveries turned cash flow negative and the full-year 870-aircraft target requires roughly 87 deliveries per month in H2; at EUR 179.28, the stock trades at about 25x forward PE and is not cheap. Report rating Hold: a high-quality mature cash cow, but the stock is paying for execution repair, has no current margin of safety, and is worth waiting for at a better entry point.
Rocket Lab is the second-largest listed commercial space player after SpaceX, with a vertically integrated stack spanning rocket design, launch, satellites, and payloads. The core thesis rests on Electron small launchers, about 30% of launch services with 21 launches and a 100% success rate in FY2025, plus Space Systems at about 70%, including the SDA USD 816 million 18-satellite contract and the USD 275 million Geost acquisition that moves the company into military payloads. Research rating Watch: FY2025 revenue reached USD 602 million, backlog rose to USD 1.85 billion, and Q1 2026 revenue reached USD 200 million, but the delayed Neutron medium-lift rocket, now pushed to Q4 2026, remains the key valuation turning point.
Safran is France's leading narrowbody aero-engine champion, co-owning CFM International 50/50 with GE Aerospace (the CFM56/LEAP family powers the Boeing 737 MAX and Airbus A320neo, with roughly 75% share including the JV); 2025 revenue was €31.2B, split 78% civil aviation and 22% defense, with the aftermarket annuity (23,000 CFM56 plus 7,500 LEAP units in service) at the core of profit; defense has lately accelerated on France's LPM 2024-2030 act, and the CFM partnership with GE was renegotiated in 2025 to run through 2050. Rating Watch: a high-quality narrowbody-aftermarket annuity asset whose current price already fully discounts the roadmap, leaving thin margin of safety for new positions.
A defense-space contractor with an embedded Starlab commercial space-station option, Voyager remains deeply loss-making with negative owner earnings. The core thesis is that demand is real, but the company has not yet converted that demand into durable, distributable cash flow. Research rating Watch: at $44.96, the stock is already near the lower end of the optimistic scenario, with no margin of safety and an ideal buy range of $18 to $25.
Karman Holdings sits in high-quality defense and space niches with deep customer embedding, but its current financial profile is still uneven. The core thesis is that this may become a good mission-critical aerospace and defense platform, yet 2025 operating cash flow turned negative, leverage is high, tangible book value is negative, and the current price of USD 51.84 is far above a reasonable intrinsic value range of USD 13-20. Research rating Watch: an emerging good business, but at a bad price.
Frequency Electronics is a small-cap niche supplier of precision timing, atomic clocks, and microwave components for satellite payloads, defense communications, electronic warfare, and secure timing, with a narrow moat. The core thesis is that the business has improved, but the current price of $72.16 stands far above the three intrinsic value ranges of conservative $9-12, base $16-22, and optimistic $28-38, with an ideal buy range of $12-16. Research rating Watch: a technically credible niche compounder deserves attention, but not at a price that already discounts years of optimistic execution.
A supplier of high-reliability electronics and signal-processing platforms for aerospace and defense, with gross margin recovering from a fall of 41.7% to 27.9%; at $112.87 the stock trades above 90x FCF, pricing in an excellent outcome while operating quality stays unproven. Rating Avoid: a strong industry attached to an unproven turnaround already priced for perfection, with an ideal buy of $25–35.
The Buffett framework rates Kencoa Aerospace a Watch. The company has cleared the entry barriers of the aerospace supply chain and grew Q1 2026 revenue 45% year over year, yet free cash flow was negative for five straight years (2021-2025) and a perpetual convertible bond, if fully converted, dilutes existing holders by about 67.7%. At roughly KRW 23,700 the stock already prices in a strong turnaround; fair value sits at KRW 12,000-18,000 and an ideal entry at KRW 10,000-14,000, leaving no margin of safety. Rating Watch: a barrier-cleared turnaround small cap that has not yet proven it can convert orders into durable, distributable per-share cash flow.
Curtiss-Wright is a high-quality aerospace, defense, naval nuclear, and industrial technology compounder with strong cash generation and embedded customer relationships. At $769 per share and a $28.5 billion market capitalization, the stock trades around 48x owner earnings and 56x P/E, while my DCF points to fair intrinsic value of $300-380 and an ideal buy range of $220-300. Research rating Watch: a good business at a bad price, with little margin of safety today.
Moog is a precision motion-control company with defensible positions in aerospace, defense, space, and selected industrial and medical niches. Fiscal 2025 revenue reached a record $3.861 billion and margins improved to 13%, but a material weakness in internal control, uneven FCF conversion, and a stock price near $373 leave no margin of safety against an intrinsic value range of $90 to $260 and a fair buy range of $95 to $145. Report rating Watch: a better business, but not yet a value-investing entry point.
A great company at a poor price. At roughly $344.7 today, a trailing P/E near 41.3x, and a market cap around $21.1 billion, Woodward is a genuinely durable cross-cycle earner with real engineering moats in aerospace and select industrial controls. But DCF and relative valuation both point to fair intrinsic value of $170-240, with an ideal buy range of $130-180, leaving no margin of safety at the current price. Rating Watch: a high-quality business that today looks far more like a bad price than a bad company.
Hexcel is a leading aerospace-grade carbon fiber and prepreg supplier, but it behaves more like a high-quality cyclical stock than a smooth compounder. At USD 88.04, the stock already prices in a recovery, while our neutral DCF is around USD 55 and fair buy range is USD 50-60. Research rating Watch: a good company, but with insufficient margin of safety.
Leidos is the largest U.S. government technology and engineering contractor, with about 87% of revenue from the federal government and a profile of stable demand and real cash flow, but only a moderate moat and pricing power constrained by competitive bidding. At roughly USD 127.81, the stock sits near the lower end of a reasonable range: not expensive, but without an obvious margin of safety. Research rating Watch: a quality contractor worth tracking, with an ideal buy range of USD 95-110.
Textron is a multi-business group centered on aviation and defense with an industrial segment attached, earning money mainly through Cessna/Beechcraft business jets and Bell helicopters, with real brand and certification barriers but uneven moats across segments. At about $91.76, the stock trades at roughly 16-17 times conservative Owner Earnings, cheaper than peers but without enough margin of safety. Research rating Watch: a solid business worth tracking, with an ideal buy range of $72-$82.