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As of today (2026-07-17), Innovative Solutions and Support's weighted average cost of capital is 10.05%%. Innovative Solutions and Support's ROIC % is 18.57% (calculated using TTM income statement data).
Innovative Solutions and Support generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
For a comprehensive WACC calculation, please access the WACC Calculator.
Innovative Solutions and Support (FRA:IOE) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Innovative Solutions and Support's weighted average cost of capital is 10.05%%. Innovative Solutions and Support's ROIC % is 18.57% (calculated using TTM income statement data).
Innovative Solutions and Support generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
Innovative Solutions and Support WACC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Aerospace & Defense subindustry, Innovative Solutions and Support's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Innovative Solutions and Support WACC % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Innovative Solutions and Support's WACC % distribution charts can be found below:
* The bar in red indicates where Innovative Solutions and Support's WACC % falls into.
Innovative Solutions and Support WACC % Calculation
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Innovative Solutions and Support's market capitalization (E) is €287.528 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Innovative Solutions and Support's latest one-year quarterly average Book Value of Debt (D) is €26.7358 Mil.
a) weight of equity = E / (E + D) = 287.528 / (287.528 + 26.7358) = 0.9149
b) weight of debt = D / (E + D) = 26.7358 / (287.528 + 26.7358) = 0.0851
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.551%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Innovative Solutions and Support's beta cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.551% + 1 * 6% = 10.551%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Innovative Solutions and Support's interest expense (positive number) was €1.646 Mil. Its total Book Value of Debt (D) is €26.7358 Mil.
Cost of Debt = 1.646 / 26.7358 = 6.1565%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 4.867 / 19.482 = 24.98%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Innovative Solutions and Support (FRA:IOE) has a WACC % of 10.05% as of Jul. 17, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Innovative Solutions and Support and its competitors. This is 71% above median its historical median of 5.89. According to the industry distribution chart, Innovative Solutions and Support ranks #230 out of 361 companies in the Aerospace & Defense industry, placing it in the top 63.7%.
Is Innovative Solutions and Support's WACC % too high?
Innovative Solutions and Support's current WACC % of 10.05% is 71% above median its 10-year median of 5.89. The Aerospace & Defense industry median WACC % is 9.91. Innovative Solutions and Support's value of 10.05% is 1.4% above this industry median. Based on the distribution chart, Innovative Solutions and Support ranks #230 out of 361 companies in the Aerospace & Defense industry, which is below the industry midpoint. Overall, Innovative Solutions and Support has a GF Score™ of 76/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Innovative Solutions and Support's WACC % compare to SPCE and BUKS?
According to the Aerospace & Defense industry distribution chart, Innovative Solutions and Support ranks #230 out of 361 companies for WACC %. This places Innovative Solutions and Support in the lower half of its industry. The industry median WACC % is 9.91. Innovative Solutions and Support's value of 10.05% is 1.4% above this benchmark. While the company's 10-year median is 5.89 vs. the industry median of 9.91, Innovative Solutions and Support has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for an Aerospace & Defense company?
The median WACC % among Aerospace & Defense companies is 9.91, based on 361 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Innovative Solutions and Support's current WACC % of 10.05% is 1.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Innovative Solutions and Support and its competitors. For the Aerospace & Defense industry, the median WACC % is 9.91 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Innovative Solutions and Support's current WACC % is 10.05%, which is 71% above median its own 10-year median of 5.89. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Innovative Solutions and Support stock overvalued right now?
Based on GuruFocus' analysis, Innovative Solutions and Support (FRA:IOE) is currently considered Fairly Valued. The stock's GF Value™ is €15.04, compared to a current price of €15.96 — trading 6.1% above its estimated fair value. The current WACC % is 10.05%, which is 71% above median its 10-year median of 5.89 and 1.4% above the Aerospace & Defense industry median of 9.91. Innovative Solutions and Support's overall GF Score™ is 76/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Innovative Solutions and Support (FRA:IOE), the current WACC % is 10.05% as of Jul. 17, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Innovative Solutions and Support (FRA:IOE) Overvalued in 2026?
Based on GuruFocus' analysis, Innovative Solutions and Support stock appears to be overvalued.
The current stock price of €15.96 is trading 6.1% above its estimated GF Value™ of €15.04.
GuruFocus considers Innovative Solutions and Support to be Fairly Valued.
Key valuation signals for FRA:IOE:
WACC %: 10.05% (71% above median its 10-year median of 5.89)
GF Value™: €15.04 vs. price of €15.96 (6.1% above fair value)
Industry Position: 1.4% above the Aerospace & Defense median (#230 of 361)
No single metric tells the full story. See the FRA:IOE stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Innovative Solutions and Support Business Description
Innovative Solutions and Support Inc is a systems integrator that designs, manufactures, sells, and services air data equipment, engine display systems, standby equipment, primary flight guidance, and cockpit display systems for retrofit applications and original equipment manufacturers. The company supplies integrated Flight Management Systems, Flat Panel Display Systems, Integrated Standby Units, Positioning System receivers that enable reduced carbon footprint navigation, and an Autothrottle, which allows a pilot to automatically control the power setting of the engine and is designed to reduce pilot workload and enhance safety. It sells its products to both the OEM and the retrofit markets.
76GF Score
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