Equity Research Analysis: INNOVATIVE SOLUTIONS & SUPPORT INC (ISSC)
|Blank Capital Research Unit|Spot: $24.96
Price$24.96
Composite Score73.0/100
RatingBUY (4★)
Rank#36 OF 7,333
Market Cap$220M
P/E Ratio
IMPORTANT DISCLAIMER: Blank Capital Research ("BCR") is a technology platform, not a registered investment advisor or broker-dealer. The algorithmically generated signals, scores, and rankings provided on this site ("God Mode" Signals) are for informational and research purposes only and do not constitute financial advice, investment recommendations, or an offer to sell or solicit an offer to buy any securities.
HYPOTHETICAL PERFORMANCE RESULTS: The "timing scores" and "regime signals" displayed are based on quantitative models. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
RISK OF LOSS: Trading in financial markets involves a high degree of risk and may result in the loss of your entire investment. Data provided by third-party sources (Intrinio, Snowflake) is believed to be reliable but is not guaranteed for accuracy or completeness. Past performance is not indicative of future results.
© 2026 Blank Capital Research. All rights reserved. System Version: Aegis V8 (God Mode).
Context:Accumulation identified following news: "Research Analysts’ Downgrades for February 21st (ABBNY, AEE, AEG, AEIS, AEP, AGCO, AGM, AKR, AMGN, AMRZ)". This headline is the primary catalyst for the 5.9% move.
Innovative Solutions and Support, Inc. designs, develops, manufactures, sells, and services flight guidance, autothrottle, and cockpit display systems. The company also provides integrated standby units, which incorporate the measurement and display of attitude, altitude, airspeed, and navigation data into a single standby/backup navigation instrument for military, commercial air transport, and corporate/general aviation applications.
Services
Computer Software
$220.18M
80
MALVERN, Pennsylvania
Shahram Askarpour
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = ISSC ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$YALA Yalla Group Ltd | 75 | 89 | 99 | 80 | - | - | 21.3% | 18.6% | 64.5% | 35.7% | 39.5% | 6.5% | 0.0% | 0.0x | $644M | VS | |
$GRVY GRAVITY Co., Ltd. | 75 | 82 | 96 | 71 | - | - | 15.4% | 12.6% | 38.7% | 17.1% | 17.0% | -39.7% | 0.0% | 0.0x | $439M | VS | |
$ISSC INNOVATIVE SOLUTIONS & SUPPORT INC | 73 | 81 | 88 | 94 | 32.3x | 24.2x | 19.5% | 12.2% | 48.7% | 23.1% | 16.6% | 103.0% | 0.0% | 35.0x | $220M | ||
$AER AerCap Holdings N.V. | 72 | 60 | 87 | 84 | - | - | 12.4% | 2.9% | 100.0% | 28.2% | 26.2% | 5.5% | 0.8% | 264.0x | $19.4B | VS | |
$HCSG HEALTHCARE SERVICES GROUP INC | 72 | 74 | 88 | 88 | 7.1x | 6.1x | 28.9% | 20.8% | 20.8% | 9.9% | 9.3% | 8.5% | 0.0% | 1.0x | $1.2B | VS | |
$LQDT LIQUIDITY SERVICES INC | 72 | 90 | 88 | 68 | 24.9x | 14.3x | 14.6% | 7.8% | 43.8% | 7.4% | 5.9% | 31.2% | 0.0% | 0.0x | $857M | VS | |
$TRTNpA Triton International Ltd | 71 | 70 | 89 | 70 | - | 1.7x | 18.0% | 4.6% | 97.3% | 52.2% | 32.7% | -3.4% | 0.0% | 271.0x | $8.0B | VS | |
$EDU New Oriental Education & Technology Group Inc. | 71 | 83 | 52 | 77 | - | - | 9.4% | 4.9% | 55.5% | 8.7% | 7.7% | 13.6% | 1.3% | 7.0x | $78.0B | VS | |
$NTES NetEase, Inc. | 71 | 88 | 93 | 68 | - | - | 22.1% | 15.6% | 62.5% | 28.1% | 28.7% | -1.0% | 2.8% | 9.0x | $56.6B | VS | |
$UTI UNIVERSAL TECHNICAL INSTITUTE INC | 70 | 86 | 86 | 72 | 43.2x | 16.0x | 21.4% | 8.0% | 100.0% | 10.0% | 7.5% | 14.1% | 0.0% | 27.0x | $1.8B | VS | |
$BABA Alibaba Group Holding Ltd | 70 | 77 | 88 | 79 | - | - | 11.4% | 7.0% | 40.0% | 14.1% | 12.6% | 5.3% | 2.1% | 23.0x | $316.5B | VS | |
| SECTOR BENCH | - | - | - | - | - | 23.7x | 11.7x | 5.3% | 1.9% | 59.6% | 3.5% | 2.3% | 7.8% | 0.0% | 0.3x | - | REF |
INNOVATIVE SOLUTIONS & SUPPORT INC (ISSC) receives a "Buy" rating with a composite score of 73.0/100. It ranks #36 out of 7,333 stocks in our coverage universe and carries a 4-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
Sign in to join the discussion.
Shahram Askarpour
Chief Executive Officer
Labor Force
80
81
36
34
Audit Verdict: Average governance indicators based on financial metrics.
No recent insider transactions available for ISSC
Outperforming peers — winners tend to keep winning over 3-12 months
Trading at a discount to fundamentals — favorable entry valuation
High profitability & efficiency — strong quality floor supports entry
High volatility — wider range of outcomes increases timing risk
Moderate investment profile
Top-rated overall — multiple factors aligned for strong entry
Get full access to institutional-quality research tools with Blank Capital Pro.
Upgrade to ProStarting at $19.99/mo
Relative valuation derived from Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for ISSC.
View All RatingsYOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Earnings well-supported by fundamental cash flows
Material decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 81 | 94 | -13DRAG |
| MOMENTUM | 94 | 98 | -4NEUTRAL |
| VALUATION | 88 | 95 | -7DRAG |
| INVESTMENT | 36 | 58 | -22DRAG |
| STABILITY | 34 | 28 | +6ALPHA |
| SHORT INT | 82 | 93 | -11DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 20.6% vs WACC 9.3% (spread +11.3%)
GM 49% vs sector 60%, OM 23% vs sector 4%
Capital turnover 1.04x, R&D intensity 6.1%
Rev growth 103%, 11yr history
Interest coverage 12.7x, Net debt/EBITDA 3.3x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
INNOVATIVE SOLUTIONS & SUPPORT INC receives a Buy rating with a composite score of 73.0/100 and 4 out of 5 stars, ranking #36 of 7,333 stocks in our universe. ISSC displays a favorable combination of factors that positions it above the majority of the market. While not without risk, the quantitative profile supports a constructive outlook.
ISSC earns a quality score of 81/100, indicating above-average business quality. The company reports a return on equity of 19.5% (sector avg: 5.3%), gross margins of 48.7% (sector avg: 59.6%), net margins of 16.6% (sector avg: 2.3%). Companies in this tier generally demonstrate consistent profitability and efficient capital deployment, though they may face some competitive pressure.
ISSC carries a solid value score of 88/100, pointing to an attractively priced stock relative to peers. Key valuation metrics include a P/E ratio of 32.29x, an EV/EBITDA of 24.23x, a P/B ratio of 6.29x. This score suggests reasonable compensation for the risks involved, with potential upside if the market recognizes the stock's underlying worth.
INNOVATIVE SOLUTIONS & SUPPORT INC's investment score of 36/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 103.0% vs. a sector average of 7.8% and a return on assets of 12.2% (sector: 1.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
INNOVATIVE SOLUTIONS & SUPPORT INC (ISSC) is exhibiting exceptional momentum with a score of 94/100, placing it among the strongest trending stocks in the market. Revenue growth stands at 103.0% year-over-year, while a beta of 1.40 reflects its sensitivity to broader market moves. Stocks with momentum scores this high have historically outperformed over the following 3–12 months, suggesting ISSC may continue to benefit from strong institutional interest and positive price trends.
ISSC's stability score of 34/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 1.40 and a debt-to-equity ratio of 35.00x (sector avg: 0.3x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
ISSC's short interest factor score of 82/100 indicates very low short selling activity relative to peers — a positive signal suggesting institutional investors see limited near-term downside. Specific risk factors include above-average market sensitivity (beta: 1.40), elevated leverage (D/E: 35.00x), micro-cap liquidity risk. As a micro-cap company with a market capitalization of $220M, INNOVATIVE SOLUTIONS & SUPPORT INC benefits from the generally lower volatility and deeper liquidity associated with its size class.
INNOVATIVE SOLUTIONS & SUPPORT INC is a micro-cap company in the Services sector, ranked #3 of 50 in its sector (94th percentile) and #36 of 7,333 overall (100th percentile). Key comparisons include ROE of 19.5% exceeding the 5.3% sector median and operating margins of 23.1% above the 3.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Services peers.
Want professional-grade coverage on ISSC?
Access Premium Terminal →Quant Factor Profile
Key factor gap
Momentum (94) vs Stability (34) — closing this gap could shift the rating.
RANK #3 OF 50 IN CONSUMER DISCRETIONARY
EV/EBITDA 107% ABOVE SECTOR MEDIAN
ROE 267% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 18% BELOW SECTOR MEDIAN
AUDIT DATA AS OF DEC 31, 2025 (Q3 FY2025)
We rate INNOVATIVE SOLUTIONS & SUPPORT INC (ISSC) as a Buy with a composite score of 73.0/100 at a current price of $24.96. The stock scores above average across the majority of our six quantitative factors and ranks #36 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.
The rating is primarily driven by strength in momentum (94th percentile) and value (88th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (34th percentile) and investment (36th percentile) tempers our overall conviction. We assign a Narrow Moat rating (58/100), Medium uncertainty, and Standard capital allocation.
Key items to watch: sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
INNOVATIVE SOLUTIONS & SUPPORT INC holds a top-quartile position (#3 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 73.0/100 places it at rank #36 in our full 7,333-stock universe. At $220M in market capitalization, INNOVATIVE SOLUTIONS & SUPPORT INC is a small-cap player in the Services space, which limits certain scale advantages but may allow for more agile strategic execution.
The near-term outlook is constructive, with revenue growing at 103% and momentum in the 94th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 36th percentile indicates reinvestment patterns that investors should monitor for sustainability.
The margin cascade tells an important story: gross margins of 49% (-10.9pp vs sector) narrow to operating margins of 23% (+19.6pp vs sector) and net margins of 16.6%, yielding a gross-to-net conversion rate of 34%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.
At a current price of $24.96, INNOVATIVE SOLUTIONS & SUPPORT INC appears undervalued relative to its fundamentals. Our value factor score of 88/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.
The stock currently trades at a P/E of 32.3x (a 36% premium to the sector median of 23.7x), EV/EBITDA of 24.2x (at a premium), P/B of 6.3x, P/S of 5.4x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.
The stock's Buy rating (composite score 73.0/100) reflects broad-based quantitative strength, placing it in the top 20% of our 7,333-stock universe.
Gross margins of 49% signal strong pricing power and brand/IP advantages — businesses with margins above 40% have historically demonstrated more resilient earnings through economic cycles.
Returns on equity of 19.5% exceed the cost of equity for most companies, indicating genuine shareholder value creation and a reinvestment engine that compounds wealth over time.
Revenue growth of 103% confirms the business is expanding its addressable market — growth at this level typically supports multiple expansion and attracts institutional capital.
A value factor score of 88/100 suggests the market is underpricing these fundamentals, creating a potential margin of safety for new investors.
We assign a Medium uncertainty rating to INNOVATIVE SOLUTIONS & SUPPORT INC. The stock presents a balanced risk profile: elevated market sensitivity (beta of 1.40) and below-average price stability (34th percentile). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.
Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.40); below-average price stability (34th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 34th percentile and quality factor at the 81th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: healthy gross margins of 49% provide a buffer against cost pressures. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate INNOVATIVE SOLUTIONS & SUPPORT INC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 19.5%, and the balance sheet is managed within acceptable parameters (D/E: 35%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; INNOVATIVE SOLUTIONS & SUPPORT INC falls short on at least one dimension.
There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.
In summary, INNOVATIVE SOLUTIONS & SUPPORT INC receives a Buy rating with a composite score of 73.0/100 (rank #36 of 7,333). Our quantitative framework assigns a Narrow Moat (58/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 67/100.
Our analysis supports a constructive view on INNOVATIVE SOLUTIONS & SUPPORT INC. The combination of identifiable competitive advantages, medium uncertainty, and standard capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We assign INNOVATIVE SOLUTIONS & SUPPORT INC a Narrow Moat rating with a composite moat score of 58/100. The ROIC-WACC spread of +11.3% is the primary signal of economic value creation. The company possesses identifiable competitive advantages, though they are less entrenched than those of wide-moat peers. Our analysis indicates that INNOVATIVE SOLUTIONS & SUPPORT INC can sustain above-average returns on invested capital for at least 10 years, with the strongest contributor being growth durability at 18.1/20.
The strongest moat sources are growth durability (18.1/20) and financial resilience (14.5/20). Rev growth 103%, 11yr history. Interest coverage 12.7x, Net debt/EBITDA 3.3x. These pillars form the core of INNOVATIVE SOLUTIONS & SUPPORT INC's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include reinvestment efficiency (3.4/20) and economic value creation (10/20). Capital turnover 1.04x, R&D intensity 6.1%. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect INNOVATIVE SOLUTIONS & SUPPORT INC's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include gross margins of 49% providing a solid profitability foundation, operating margins of 23% reflecting effective cost management, robust top-line growth of 103% expanding the revenue base. The margin cascade from 49% gross to 23% operating to 16.6% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that the profit engine is high-quality and likely sustainable, with the quality factor at the 81th percentile.
The margin profile shows gross margins of 49%, operating margins of 23%, net margins of 16.6%. Return metrics include ROE of 19.5% and ROA of 12.2%. Relative to the Services sector, gross margins are 10.9 percentage points below the sector median of 60%, and ROE of 19.5% compares to a sector median of 5.3%.
The balance sheet reflects moderate leverage with D/E of 35%, revenue growth of 103%. The sector median D/E is 0%, putting INNOVATIVE SOLUTIONS & SUPPORT INC at higher leverage than the typical peer. The combination of low leverage and healthy profitability provides significant financial resilience and strategic optionality.
Elevated short interest (82th percentile) indicates that sophisticated market participants are betting against the stock.
Above 50MA
37.18%
Net New Highs
+51081
Innovative Aerosystems (ISSC) has acquired the S-TEC Model 3100 autopilot product line from Moog, aiming to enhance its avionics and flight control capabilities and improve customer support. Financially, ISSC shows robust performance with strong revenue growth and profitability, though its valuation metrics are near historical highs. While the company demonstrates financial stability, investors should consider sector-specific risks and the stock's higher volatility.
Innovative Solutions and Support (NASDAQ:ISSC) reported Q1 earnings with an EPS of $0.25, significantly beating analyst estimates of $0.10. The company also surpassed revenue expectations, achieving $21.8 million against an $18.8 million estimate, driven by resumed F-16 production and advancements in their next-gen UMS. Despite near-term manufacturing transition headwinds, ISSC maintains a strong backlog and liquidity position, with plans to insource F-16 subassemblies to improve future margins.
Navellier & Associates Inc. has initiated a significant new stake in Innovative Solutions and Support, Inc. (NASDAQ:ISSC), acquiring 91,916 shares valued at approximately $1.15 million. This investment contributes to a total institutional ownership of about 28.53% for ISSC. The company also holds a "Strong Buy" average analyst rating with an average price target of $16.25, following recent upgrades from several firms.
The New York State Common Retirement Fund has invested $889,000 in Innovative Solutions and Support, Inc. (NASDAQ:ISSC), acquiring 71,180 shares. This purchase, along with other institutional investments, brings the total institutional ownership of ISSC to 28.53%. Analysts maintain a "Strong Buy" rating for the stock, with a consensus target price of $16.25, while the stock currently trades around $19.68.
INNOVATIVE SOLUTIONS & SUPPORT (NASDAQ:ISSC) exhibits a strong high-growth momentum profile, characterized by significant year-over-year EPS and revenue growth, improving profit margins, and robust free cash flow. The company also demonstrates a strong technical condition with a top-level technical rating and a favorable price pattern suggesting a potential breakout. This analysis combines fundamental strength with technical timing to identify a potential investment opportunity.