ISSC Stock Risk & Deep Value Analysis
Innovative Solutions and Support Inc
Industrials • Aerospace & Defense
DVR Score
out of 10
What You Need to Know About ISSC Stock
We analyzed Innovative Solutions and Support Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran ISSC through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
ISSC Risk Analysis & Red Flags
What Could Go Wrong
The primary risk involves the successful and timely integration of the newly acquired Honeywell assets. If ISSC faces significant operational or technical hurdles in absorbing these product lines and intellectual property, the anticipated revenue growth and synergies may not materialize, potentially leading to underperformance and a re-evaluation of the acquisition's value.
Risk Matrix
Overall
Moderate
Financial
Low
Market
Medium
Competitive
Medium
Execution
Medium
Regulatory
Medium
Red Flags
- ⚠
No specific red flags identified in the provided research data.
Upcoming Risk Events
- 📅
Challenges or delays in integrating Honeywell assets
- 📅
Economic slowdown impacting aerospace spending or general aviation demand
- 📅
Intensified competition from larger aerospace players
When to Reconsider
- 🚪
Quarterly revenue growth from acquisitions fails to meet expectations (e.g., less than 10-15% YoY growth in revenue from acquired segments post-integration for two consecutive quarters).
- 🚪
Net profit margins fall below 15% for two consecutive quarters, indicating integration challenges or competitive pressures.
- 🚪
Significant and unexplained management turnover, particularly within the leadership responsible for integration or technology development.
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What Does Innovative Solutions and Support Inc (ISSC) Do?
Market Cap
$379.92M
Sector
Industrials
Industry
Aerospace & Defense
Employees
147
Innovative Aerosystems, Inc., engages in the engineering, manufacturing, and supply of advanced avionic solutions. The company provides autothrottles; LPV Navigators; standby displays; COM/NAV/surveillance radio management systems; air data solutions; inertial reference systems; utilities management systems; and air data, attitude and heading reference systems. It also offers flat panel display systems, inertial reference systems, integrated global navigation systems, global positioning systems, c-130 engine instrument display systems, liberty flight deck, and communications/navigation products. The company serves to business aircrafts, commercial airlines, military, virtual cp-pilots, and turbo prop. Innovative Aerosystems, Inc. was formerly known as Innovative Solutions and Support, Inc. and changed its name to Innovative Aerosystems, Inc. in October 2025. The company was incorporated in 1988 and is based in Exton, Pennsylvania.
Visit Innovative Solutions and Support Inc WebsiteInvestment Thesis
ISSC is strategically transforming from a niche player to a more diversified avionics provider through its recent, well-executed acquisitions of Honeywell assets. This move, supported by robust financial health and strong earnings growth, significantly expands its addressable market and competitive moat. The company is now poised for substantial organic and inorganic growth in the specialized general aviation and military aerospace segments, making it an attractive growth opportunity in a stable, high-barrier industry.
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ISSC Price Targets & Strategy
12-Month Target
$30.00
Bull Case
$35.00
Bear Case
$20.00
Valuation Basis
20x P/E applied to a projected TTM EPS of $1.50 (post-acquisition integration and growth).
Entry Strategy
Dollar-cost average between $20.00-$22.50, seeking support at recent consolidation levels or on market dips, given the stock's year-long significant rally.
Exit Strategy
Consider taking initial profits at $29.90 (analyst consensus target) and subsequent targets at $32-$35. Set a stop-loss at $18.50, below key support levels and recent tax-withholding prices.
Portfolio Allocation
5% for moderate risk tolerance, reflecting small-cap volatility with significant strategic upside.
Price Targets & Strategy
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Does ISSC Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Expanding
Moat Sources
3 Identified
The acquired intellectual property and exclusive licenses for specific Boeing and F-15 platforms significantly enhance ISSC's proprietary technology and create high switching costs for customers embedded in long-lifecycle aerospace programs. Coupled with stringent regulatory requirements, these factors provide a durable competitive advantage.
Moat Erosion Risks
- •Technological disruption from new entrants or larger competitors introducing superior next-gen avionics solutions.
- •Dependence on key military contracts; non-renewal or reduction could impact revenue.
- •Potential for a major OEM (e.g., Boeing) to insource or acquire similar capabilities.
ISSC Competitive Moat Analysis
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ISSC Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral, as no specific social media data is provided. However, a significant strategic move like the Honeywell acquisition would likely generate positive discussion among informed investors.
Institutional Sentiment
Positive, with analysts showing 'good agreement' on price appreciation and consensus price target indicating 29.9% upside from current levels.
Insider Activity (Form 4)
Jeffrey DiGiovanni, CFO, withheld 897 shares ($18K value) at $20.53 in March 2026 to cover restricted stock unit (RSU) tax obligations. This is a routine transaction and not indicative of discretionary buying or selling.
Options Flow
Normal options activity, as no specific unusual activity or put/call ratio data is provided in the research.
Earnings Intelligence
Next Earnings
Estimated early-May 2026 (for Q2 2026)
Surprise Probability
Medium
Historical Earnings Pattern
Q1 2026 reported a significant EPS beat (120%), suggesting positive market reaction to strong performance. Given the recent acquisitions, the market will likely focus heavily on commentary regarding integration and future growth prospects.
Key Metrics to Watch
Competitive Position
Top Competitor
Garmin (GRMN)
Market Share Trend
Gaining, primarily through the strategic acquisitions of established product lines and IP from Honeywell, expanding its presence in general aviation and military avionics.
Valuation vs Peers
Trading at 34.1% below estimated fair value per analyst models, suggesting a discount relative to its intrinsic value despite its TTM P/E of ~20x, which is reasonable for its growth rate. Lack of full peer multiples makes direct comparison difficult, but its strong earnings growth of 183.8% positions it favorably.
Competitive Advantages
- •Newly acquired intellectual property and exclusive licensing rights from Honeywell for critical military platforms.
- •Regulatory barriers to entry and certifications in the highly regulated aerospace industry.
- •Specialized niche expertise in air data and engine display systems.
Market Intelligence
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What Could Drive ISSC Stock Higher?
Near-Term (0-6 months)
- •Successful integration of Honeywell acquired assets (Q2-Q3 2026)
- •Next Earnings Report (Expected in early-May 2026 for Q2 2026 results)
- •Announcement of new contract wins leveraging acquired IP
Medium-Term (6-18 months)
- •Realization of synergies and cross-selling opportunities from Honeywell acquisitions (H2 2026 - 2027)
- •Expansion of product lines and market share in general aviation and military platforms
- •Strategic partnerships leveraging expanded capabilities
Long-Term (18+ months)
- •Establishment as a leading supplier in specialized avionics segments via continuous innovation and IP leverage
- •Potential for further accretive acquisitions leveraging strong balance sheet
- •Increased market penetration in key military platforms (Boeing 767, KC-46, F-15)
Catalysts & Growth Drivers
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What's the Bull Case for ISSC?
- ✓
Acceleration in organic revenue growth post-acquisition integration, indicating successful cross-selling and new client wins.
- ✓
Maintenance or expansion of gross and net profit margins, reflecting efficient operations and pricing power.
- ✓
Positive commentary from management regarding synergies, new product development, and future outlook.
Bull Case Analysis
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Competing with ISSC
See how Innovative Solutions and Support Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Innovative Solutions and Support Inc ISSC | $379.9M | 6.8 | — | $22.0M | 0.0% | 0.0% | |
Caterpillar Inc CAT | — | 0.1 | — | — | — | — | Compare → |
General Electric Co GE | $306.2B | 0.1 | 35.9 | $45.9B | 20.0% | 18.0% | Compare → |
Honeywell International Inc. HON | — | 1.5 | — | — | — | — | Compare → |
RTX Corp RTX | — | 0.1 | 5.0 | $88.6B | 7.6% | 0.0% | Compare → |
United Parcel Service Inc UPS | $81.3B | 0.1 | 14.3 | — | — | — | Compare → |
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How Innovative Solutions and Support Inc Makes Money
Innovative Solutions and Support Inc. (ISSC) operates by designing, manufacturing, selling, and servicing advanced avionics systems and components for the aerospace industry. This includes specialized hardware like air data equipment, engine display systems, and, significantly, recently acquired assets such as general aviation autopilots, navigation/communication systems, and electronic generator control units for military aircraft like the Boeing 767, KC-46, and F-15. The company generates revenue by providing mission-critical, certified equipment to aircraft manufacturers, government defense programs, and general aviation operators who require high-performance and reliable solutions.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Innovative Solutions and Support Inc (ISSC)?
As of April 9, 2026, Innovative Solutions and Support Inc has a DVR Score of 6.8 out of 10, placing it in the "Solid Pick" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Innovative Solutions and Support Inc?
Innovative Solutions and Support Inc's market capitalization is approximately $379.9M. The company operates in the Industrials sector within the Aerospace & Defense industry.
What ticker symbol does Innovative Solutions and Support Inc use?
ISSC is the ticker symbol for Innovative Solutions and Support Inc. The company trades on the NMS.
What is the risk level for ISSC stock?
Our analysis rates Innovative Solutions and Support Inc's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
Is Innovative Solutions and Support Inc's revenue growing?
Innovative Solutions and Support Inc has reported revenue growth of 0.0%. Revenue has been declining, which warrants closer examination.
Is ISSC stock profitable?
Innovative Solutions and Support Inc has a profit margin of 0.0%. The company is currently unprofitable.
How often is the ISSC DVR analysis updated?
Our AI-powered analysis of Innovative Solutions and Support Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 9, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for ISSC (Innovative Solutions and Support Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.