How does the company's performance compare to other avionic solution providers in the market?

Fundamental comparison

Innovative Solutions & Support (IS&S) posted a net‑revenue of $24.1 million and a 105 % YoY jump in gross profit to $8.6 million for Q3 2025. That double‑digit growth is far steeper than the “mid‑single‑digit” revenue increases most larger avionic players—Honeywell (Avionics), Collins (Raytheon), L3Harris, Garmin, and Safran—have reported in the same quarter. Those peers are still posting $1‑3 billion+ in quarterly sales and typically grow revenue at 5‑10 % annually, reflecting their mature market positions. IS&S’s small‑scale but hyper‑growth profile therefore stands out: it is expanding its commercial‑business‑military mix at a rate that outpaces the sector, yet its absolute top‑line remains modest compared with the “big‑ticket” OEMs.

Market dynamics & technical view

The rapid top‑line expansion suggests IS&S is successfully capturing market share in niche, high‑margin avionic upgrades (e.g., retrofit flight‑deck displays, mission‑critical software). However, the sector is still dominated by the larger OEMs, whose deep‑pocket contracts and defense pipelines provide earnings stability. From a chart perspective, IS&S has broken above its 50‑day SMA and is testing the 20‑day SMA, with volume roughly 2.5× the average daily volume—typical of a breakout rally. The stock is still trading well below its historical 12‑month high, leaving upside potential if the growth trajectory holds.

Actionable insight

• Short‑to‑mid‑term: The momentum in earnings and price action supports a bullish bias—consider a long position or add to existing holdings, targeting the next resistance around the 20‑day SMA (~+12‑15 % from current levels). Keep a stop just below the 50‑day SMA to protect against a pull‑back if the broader avionic market softens.
  
• Long‑term: Because IS&S is a small‑cap relative to the entrenched peers, the upside is contingent on continued scaling and securing larger contracts. Maintain a modest allocation (≤10 % of a diversified aerospace basket) and monitor quarterly revenue growth; a slowdown below 30 % YoY would be a red flag and may warrant a position reduction.
  

In short, IS&S is out‑performing the sector on a growth‑rate basis, but its size and reliance on sustained high‑growth make a cautiously aggressive trade the most prudent approach.