Shares of Innovative Aerosystems ISSC have surged 252.1% in the past year, outperforming both the Zacks Aerospace-Defense Equipment industry’s growth of 33.1% and the broader Zacks Aerospace sector’s gain of 27.5%. It also came above the S&P 500’s growth of 24.7% in the same time frame.
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Other industry players like Hexcel HXL and Curtiss-Wright Corp. CW have also delivered a similar stellar performance in the past year. Shares of HXL and CW have risen 50.1% and 117%, respectively, in the said period.
With ISSC’s strong performance in the market, many investors may feel encouraged to buy right away. However, before taking that step, it’s important to evaluate whether the company has the fundamental strength to support long-term growth or if the recent surge is temporary. Understanding the stability of ISSC’s growth prospects can help investors make a well-informed decision.
Tailwinds for ISSC
Innovative Aerosystems’ recent progress appears to be driven by its strategic acquisitions and expansion in the avionics market.
In April 2026, ISSC secured an exclusive perpetual license from Honeywell International Inc. for power generator systems used in commercial and defense aircraft. As part of the deal, the company gained access to intellectual property, customer contracts and important operational assets, including specialized tools and testing equipment. These systems are used in aircraft such as the Boeing 767, KC-46 tanker and F-15 fighter jet. This agreement strengthens ISSC’s presence in critical aerospace systems and supports long-term revenue growth through both new production and aftermarket services.
Moreover, ISSC entered into another agreement with Honeywell to acquire assets related to legacy avionics products used in the global Part 23 aircraft fleet. This includes aftermarket parts, intellectual property and repair capabilities for systems like navigation and communication radios, autopilots, multifunction displays and transponders. This move expands ISSC’s aftermarket business, which typically provides steady and recurring revenues.
Overall, these initiatives enhance ISSC’s product offerings, increase its presence in the aftermarket segment and support its growth in the aerospace industry.
ISSC’s Estimates
The Zacks Consensus Estimate for fiscal 2026 sales implies year-over-year growth of 8.4%, while that for fiscal 2027 sales indicates an improvement of 6.2%.
The consensus estimate for fiscal 2026 earnings implies year-over-year growth of 7.2%, while that for fiscal 2027 earnings indicates an improvement of 18%.
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Further, the upward revision in its fiscal 2026 and 2027 earnings estimates over the past 60 days suggests investors’ increasing confidence in this stock’s earnings generation capabilities.
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ISSC Stock Reflects Discounted Valuation
In terms of valuation, ISSC’s forward 12-month price-to-sales (P/S) is 4.03X, a discount to the industry average of 11.73X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with its industry average.
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Hexcel is trading at a forward 12-month P/S of 2.78X, while Curtiss-Wright is trading at 6.80X.
ISSC’s Liquidity Position
ISSC has a current ratio of 2.96. The ratio, being more than one, indicates that ISSC possesses sufficient capital to pay off its short-term debt obligations.
Hexcel has a current ratio of 2.26, while Curtiss-Wright has a current ratio of 1.44.
ISSC’s ROIC
ISSC’s Return on Invested Capital stands at 23.67%, well above the industry average of 5.80%. This indicates that the company is generating strong returns on its investments and using its capital far more efficiently than most of its peers.
Should You Buy ISSC Stock Now?
Innovative Aerosystems presents an attractive case for investors, supported by its discounted valuation, improving earnings outlook, solid growth forecasts, strong liquidity position and robust performance on the bourses. Thus, investors looking for exposure to the aerospace and defense space may consider buying this stock at current levels.
ISSC currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).