MeritValue

INNOVATIVE SOLUTIONS & SUPPORT INC

ISSCdata completeness 100%17 fiscal years on file
The thesis, from the filings

INNOVATIVE SOLUTIONS & SUPPORT INC earns about 21% on invested capital, far above its ~9% cost of capital, but has diluted owners by 3% over 5 years — a real edge showing up in the numbers. The estimate methods put fair value between $2.88 and $3.65 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$23M1$27.7M2$34.8M3$47.2M3$84.3M3
Net income$5.06M4$5.52M5$6.03M6$7M6$15.6M6
Operating cash flow$4.59M7$6.09M8$2.1M9$5.8M9$13.3M9
Capital expenditure$340,67810$161,23011$298,37312$657,79012$6.51M12
Free cash flow (derived)$4.25M7$5.93M8$1.8M9$5.14M9$6.79M9
Total debt——$19.5M13$28M14$48.5M14
Cash & equivalents$8.27M15$17.3M16$3.1M17$538,97718$2.69M18
Diluted shares17.2M17.3M17.4M17.5M17.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$36.23
your share of equity
Profit it earned you last year
$8.77
Free cash flow it threw off
$3.81
Debt you’d be carrying
$27.21

10 shares is a claim on $36.23 of net worth that earned you $8.77 and generated $3.81 of cash last year, against $27.21 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
21% avg · 5y
FY21 24%FY22 41%FY23 12%FY24 10%FY25 15%

It earned about 21% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
+3% shares · 5y

Share count is up 3% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 149% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $2.88 and $3.65 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$3.65
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth6.5%
  • fcfBase$5.14M
DCF · Growth Exit 5Y
$2.88
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth6.5%
  • fcfBase$5.14M
Earnings Power Value
$3.5
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$6.03M
  • growthAssumed0.0%
Graham Number
$8.47
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years6.5%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $2.88
The three cases
Bear0.0%$1.55
Base6.5%$2.88
Bull11.5%$4.14

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 6.5%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-09-30 · accession 0001558370-24-000248 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-09-30 · accession 0001558370-24-016501 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2023-09-30 · accession 0001104659-25-123847 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2021-09-30 · accession 0001558370-24-000248 (NetIncomeLoss)
  5. 10-K · period ending 2022-09-30 · accession 0001558370-24-016501 (NetIncomeLoss)
  6. 10-K · period ending 2023-09-30 · accession 0001104659-25-123847 (NetIncomeLoss)
  7. 10-K · period ending 2021-09-30 · accession 0001104659-22-127805 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-09-30 · accession 0001558370-24-016501 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-09-30 · accession 0001104659-25-123847 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-09-30 · accession 0001104659-22-127805 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-09-30 · accession 0001558370-24-016501 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-09-30 · accession 0001104659-25-123847 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2023-09-30 · accession 0001558370-24-016501 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2024-09-30 · accession 0001104659-25-123847 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2021-09-30 · accession 0001104659-22-127805 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2022-09-30 · accession 0001558370-24-000248 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2023-09-30 · accession 0001558370-24-016501 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2024-09-30 · accession 0001104659-25-123847 (CashAndCashEquivalentsAtCarryingValue)