Innovative Solutions Q1 2026 Earnings Show Strong Growth Despite F-16 Timing Effects

2026-02-13 05:53:19 ET

Thesis: Strong earnings see a stock boost

Innovative Aerosystems ( ISSC ) reported a Q1 '26 non-GAAP EPS of $0.25 with revenue coming in at about $21.8 million, a figure up 36.5% year over year. We’re seeing growth driven by strong commercial aftermarket demand. As for outlook, management expects organic revenue to essentially stay flat year over year, mainly due to the pull-forward of F-16 production and service revenue. For the next quarter, management gave us a forecasted revenue figure of $20 to $22 million, with sequential growth anticipated throughout the rest of the year. The company also reaffirmed their long-term target of $250 million in revenue and adjusted EBITDA margins of 25% to 30%. The stock closed about 10% higher yesterday, with shares also up about 3% in pre-market today.

Investors can now pick up shares in the mid-$21 range. In my previous coverage , I mentioned how we should see more decent growth from the Honeywell product lines. This would especially be true for F-16 avionics, which I tipped to enhance margins/operational efficiency heading into 2026. Since my buy call shares are up 41%, but in the context of things, I thought the stock was relatively cheap historically in the $14 range back then, and also many investors on the platform are quite bullish on the stock. After yesterday's earnings, I'm still pretty bullish on Innovative stock and see more upside in the longer run, reiterating my buy call....

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