Innovative Solutions & Support Inc (IA) stock analysis
Close on Nov 11, 2026Market cap $396.74MP/E 21.1Yield –
StockData Score
Prices as of Nov 11, 2026How the score works
Solid19 of 30 checks passed
Innovative Solutions & Support passes 19 of the 30 checks behind our score; 7 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.
- Valuation
- 4/6
- Growth
- 5/6
- Past performance
- 6/6
- Financial health
- 4/6
- Dividend
- 0/6
What stands out
Trading below fair value
The share price of $22.16 is below our fair value estimate of $25.78.
Return on equity over 15%
Return on equity was 28.5% over the last twelve months and averaged 20.2% over five years.
Return on capital over 10%
Return on invested capital was 19.7%, above the 10% that usually covers the cost of capital.
Earnings grew over 5 years
Net income grew 36.7% a year on average over the last five fiscal years.
What to watch
Margin of safety under 20%
The price is 14.0% below fair value, less than the 20% cushion we look for.
High debt
Debt is 70.4% of shareholders' equity, above the 40% we consider low.
P/B above the industry
Innovative Solutions & Support's price-to-book of 5.14 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 3.32.
No dividend
Innovative Solutions & Support has not paid a dividend in the last twelve months.
Valuation4/6
P/E below its 5-year median
Innovative Solutions & Support's P/E of 21.1 is below its own 5-year median of 21.4.
P/E below the industry
Innovative Solutions & Support's P/E of 21.1 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 27.6.
EV/EBITDA below its 5-year median
Innovative Solutions & Support's EV/EBITDA of 14.9 is below its 5-year median of 15.4.
P/B above the industry
Innovative Solutions & Support's price-to-book of 5.14 is above the Computer Programming, Data Processing, and Other Computer Related Services median of 3.32.
Trading below fair value
The share price of $22.16 is below our fair value estimate of $25.78.
Margin of safety under 20%
The price is 14.0% below fair value, less than the 20% cushion we look for.
Growth5/6
Revenue growing 10%+ a year
Revenue grew 44.8% a year over the last three fiscal years.
EPS growing 10%+ a year
Diluted EPS grew 40.1% a year over the last three fiscal years.
Earnings growth accelerating
Net income grew 63.2% over the last twelve months, against a 5-year average of 36.7% a year.
Growing faster than the industry
Revenue grew 20.3% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.
Guidance issued
The latest outlook (fiscal 2029 revenue, Dec 18, 2025) was issued for the first time, so it neither adds nor takes away points.
Gross margin improving
Gross margin was 54.9% over the last twelve months, against 45.2% a year earlier.
Past performance6/6
Return on equity over 15%
Return on equity was 28.5% over the last twelve months and averaged 20.2% over five years.
Return on capital over 10%
Return on invested capital was 19.7%, above the 10% that usually covers the cost of capital.
Return on equity above the industry
Innovative Solutions & Support's return on equity of 28.5% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -1.2%.
Earnings grew over 5 years
Net income grew 36.7% a year on average over the last five fiscal years.
Net margin above its 5-year average
Net margin was 20.5% over the last twelve months, against a 5-year average of 18.5%.
Net margin above the industry
Innovative Solutions & Support's net margin of 20.5% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -4.8%.
Financial health4/6
High debt
Debt is 70.4% of shareholders' equity, above the 40% we consider low.
Debt trend
Needs a balance sheet from five years ago with positive equity.
Debt covered by cash flow
Operating cash flow over the last twelve months equals 34.1% of total debt.
Interest well covered
Operating income covers interest expense 10.1 times.
Short-term assets cover short-term debts
Current assets are 2.97 times current liabilities.
Low bankruptcy risk
The Altman Z-score is 5.29; above 3 is the safe zone and below 1.8 the distress zone.
Dividend0/6
No dividend
Innovative Solutions & Support has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.
Fair value
How we estimate itOur estimate per share
$25.78
The share price is 14% below this estimate.
| Method | Multiple used | Own 5Y median | Industry median | Value per share | Weight |
|---|---|---|---|---|---|
| P/E | 24.5× | 21.4× | 27.6× | $25.71 | 53% |
| EV/EBITDA | 17.1× | 15.4× | 18.8× | $25.85 | 47% |
| Earnings powerleft out, too far from the others | 8.9% cost of equity | – | – | $3.44 | – |
| Fair value | $25.78 | 100% | |||
Valuation over time
Using the earnings and balance sheet published at each date, not today's.
- P/E at month end
- Own 5-year median 21.4
- Computer Programming, Data Processing, and Other Computer Related Services median 27.6
An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.
Market risk
From the past year of daily prices.
Liquidity
Medium risk
- Average value traded per day
- $4.58M
- Value traded per 1% price move
- $2.11M
Downside
High risk
- Typical loss in a bad month
- 26.6%
- Volatility (annualized)
- 77%
- Sharpe ratio, 1 year
- 1.91
- Beta to the S&P 500 (5Y)
- 0.81
Typical bad-month loss, week by week
Margins
Share of revenue, fiscal years 2011 to 2025
Gross margin
Operating margin
Net margin
Growth rates
Compound annual growth to fiscal 2025
| Per year | 1 year | 3 years | 5 years | 10 years | Five-year pace |
|---|---|---|---|---|---|
| Revenue | +78.6% | +44.8% | +31.3% | +15.4% | |
| Gross profit | +56.3% | +34.4% | +28.0% | +19.3% | |
| Operating income | +107.8% | +40.6% | +48.9% | – | |
| Net income | +123.3% | +41.4% | +36.7% | – | |
| EPS, diluted | +120.0% | +40.1% | +35.9% | – | |
| Free cash flow | +32.2% | +4.6% | +9.8% | +18.8% |
Returns and balance sheet
10 fiscal years. Hover a measure to see how it is calculated.
| Measure | FY2016 | FY2020 | FY2025 | Trend |
|---|---|---|---|---|
| Return on equity | – | 10.2% | 28.1% | |
| Return on assets | – | 8.2% | 16.8% | |
| Current ratio | 8.22 | 2.43 | 3.04 | |
| Debt to equity | – | – | 0.37 | |
| Net debt to EBITDA | – | – | 0.90× | |
| Interest coverage | – | – | 11.6× | |
| Inventory turnover | 2.8× | 2.2× | 2.3× | |
| Capex to revenue | 1.3% | 1.6% | 7.7% | |
| Diluted shares | 17M | 17M | 18M |
Where the cash went
Fiscal 2021 to 2025, five years combined
Innovative Solutions & Support generated $31.88M from operations and spent $27.76M on capital expenditure, dividends and share buybacks. 29% of that went back into the business.
DuPont analysis
Return on equity split into margin, efficiency and leverage
| Fiscal year | Net margin | Asset turnover | Equity multiplier | Return on equity |
|---|---|---|---|---|
| FY2025 | 18.5% | 0.91× | 1.67× | 28.1% |
| FY2024 | 14.8% | 0.65× | 1.70× | 16.4% |
| FY2023 | 17.3% | 0.71× | 1.41× | 17.4% |
| FY2022 | 19.9% | 0.90× | 1.12× | 20.0% |
| FY2021 | 22.0% | 0.67× | 1.31× | 19.3% |
| FY2020 | 15.1% | 0.54× | 1.25× | 10.2% |
Piotroski F-Score
Nine tests of profitability, balance sheet and efficiency, fiscal 2025 against fiscal 2024
- ProfitableNet income above zero$15.63M
- Cash generatingOperating cash flow above zero$13.30M
- Return on assets improvedROA up on the prior year11.1% → 19.0%
- Earnings backed by cashOperating cash flow above net income$13.30M vs $15.63M
- Less leverageLong-term debt to assets fell34.0% → 21.0%
- Better liquidityCurrent ratio rose4.77 → 3.04
- No dilutionShare count did not rise17M → 18M
- Gross margin improvedGross margin up on the prior year54.90% → 48.06%
- More efficientAsset turnover rose0.75 → 1.02
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