Innovative Solutions & Supp
ISSCBelow valueHeld by 1 superinvestor.
SEC 10-K · fundamentals
Business quality
As of 2025-09-30Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.
- Revenue growth
- +78.6%
- Net margin
- 18.5%
- ROE
- 24.2%
- FCF margin
- 8.1%
Valuation · value band
Margin of safety
Zero-growth floor
$5
Central IV
$27
Optimistic top
$33
Innovative Solutions & Supp (ISSC): A conservative value band $5–$33 / sh (zero-growth floor to growth-capped optimistic top); central read about $27. Today’s price sits below that band (price $25 as of 2026-10-14).
The middle figure is the main read. The right end is the optimistic case under the same conservative caps — not an absolute ceiling.
- Capex doubled in two years, so maintenance is hard to pin down — read the band conservatively.
Revenue growth 20% (lower of historical trend and fundamental cap, capped by moat) · moat 20 yr · discount 11.2% · Zero-growth downside $5
Price as of 2026-10-14 · yahoo · DGS10 5.1% @ 2026-10-15.
Method & numbers
Model cautions
- Capex doubled within two years: maintenance is floored then capped at D&A (OE may look optimistic); Greenwald growth value is closed — growth credit stays in the owner-earnings DCF only.
- Growth nearly matches the discount rate — the estimate is sensitive to assumptions.
A conservative intrinsic-value band (zero-growth floor to growth-capped DCF) plus a tangible asset floor — not investment advice, not a buy/sell signal, and not a price target.
Owner-earnings DCF $8.11 – $33.06 · Greenwald zero-growth $9.22 · zero-growth base $9.22 · reproduction $1.41
Moat Franchise (moat) · terminal value 31% of present value · owner-earnings yield 2% vs 10Y 5.1%.
Graham earnings-power value (normalized NOPAT)$7.11 – $9.22 / sh
Normalized NOPAT = average operating margin over the years shown × latest-year revenue × (1 − normalized tax); then + D&A − maintenance capex (write A). Unlevered (pre-interest, attributable to all capital). Capitalized at the 9–11% rate band (read as a WACC proxy). Enterprise → equity bridge applied: + cash − total debt.
Years: TTM 2026-06-30, 2024, 2023, 2022, 2021
v1 simplifications: Maintenance capex (degraded) deducted in full cash (write A): EPV = (NOPAT + D&A − maintenance capex) / WACC; no tax shield on the capex term. Maintenance-capex methods diverge by 57% (> 50%); estimate is degraded. Capex doubled within two years (AI-hog rule): flagged; the spike is treated as growth, not maintenance — owner earnings carry extra uncertainty. Share-based compensation is left as a real expense (not added back).
Buffett owner-earnings value$5.35 – $6.48 / sh
Owner earnings = average net income + average D&A − maintenance capex (zero-growth floor; no ΔNWC). Levered (starts from net income, already after interest — an equity-holder stream). Capitalized at the 9.4–11.4% band (9–11% base + 0.4pp leverage premium). No enterprise→equity bridge: the capitalized result is already equity value (subtracting debt would double-count interest).
Years: TTM 2026-06-30, 2024, 2023, 2022, 2021
v1 simplifications: Owner earnings = net income + D&A − maintenance capex (degraded); the working-capital change is excluded (maintenance ΔNWC ≈ 0; growth ΔNWC is carried in growth value, not double-counted). Maintenance-capex methods diverge by 57% (> 50%); estimate is degraded. Capex doubled within two years (AI-hog rule): flagged; the spike is treated as growth, not maintenance — owner earnings carry extra uncertainty. One-time items are not separately normalized (multi-year averaging smooths them partially). Share-based compensation is left as a real expense (not added back); see the SBC/OE disclosure. Capitalized at the 9–11% base band plus a 0.4pp leverage premium (cost of equity rises with leverage — MM Proposition II). Net debt is about 3.9 years of owner earnings, adding 0.4pp of cost-of-equity risk premium.
Reproduction value = tangible net assets $15.39M + capitalized R&D $10.37M（FY 2026, 2024, 2023, 2022） = $1.41 / sh. Reproduction value = tangible net assets (equity − goodwill − intangibles) + capitalized R&D (5y straight-line), ÷ diluted shares.
Moat reading: Franchise test compares earnings power (EPV) against reproduction value on both AV_conservative (tangible + capitalized R&D) and AV_reproduction (conservative + acquired-reset proxy). Both must clear the franchise multiple for a moat signal; near it, a commodity; below it, value destruction. A directional reading, not a verdict.
Assumes a wide moat · competitive-advantage period ≈ 20 years (earnings intact, ROIC stable over history).
Growth value gated to zero — capex doubled within two years (AI-hog); growth credit stays in the owner-earnings DCF only.
Window TTM 2026-06-30, FY 2024, 2023, 2022, 2021 · discount band 9%–11% · normalized tax 12% (Average effective tax rate over 5 year(s), capped at the statutory 21%.) · diluted shares.
Baseline 9%–11%, net debt ≈ 3.9 years of owner earnings → +0.4pp cost-of-equity premium → effective 9.4%–11.4%.
Owner-earnings DCF: growth g₁ 20% · OE FY TTM 2026-06-30, 2024, 2023, 2022, 2021 · Discount band: 10.05%–12.45% (DGS10 +4.5% to a 12% strict end, each +0.45pp for leverage premium, as of 2026-10-15). No enterprise→equity bridge: owner earnings already flow to shareholders (post-interest), so no net cash is added and no debt subtracted — matching the engine owner-earnings lamp.
Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.
What the price is betting
Today's price pencils in about 19.0% a year in owner-earnings for the next few years. Revenue actually grew 30.0% a year.
Below what it has already done.
Roughly, the price needs its historical revenue growth to run about 8 more years to hold up.
Even when the value band is low-confidence: use this to see what the price assumes — not as a cheapness confirmation.
SEC 13F · holders
Superinvestors Holding This Security
1 holder · $354,474 combined · this quarter +1 opened / -0 exited
- Value$354,474Weight (prev→now)New · 0.0%
SEC 13F · notes
Written summary
Written summary
Innovative Solutions & Supp (ISSC) is held by 1 of the superinvestors tracked on Compounder, with a combined $354,474 in reported 13F value. The largest position belongs to Jeremy Grantham, where it makes up 0.0% of the portfolio.
In the quarter ended 2026-06-30, 1 of the tracked filers opened a new position in ISSC, 0 added to existing ones, 0 trimmed, and 0 sold out entirely.
Holder counts and values reflect the most recent SEC Form 13F filings, through the quarter ended 2026-06-30. Source: SEC EDGAR. A 13F shows only long US-listed positions and can lag the real portfolio by up to 45 days, so this is disclosed long ownership, not a complete picture.
SEC 13F · co-ownership
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Sources· SEC EDGAR 13F as of 2026-06-30 · filed 2026-08-13
Educational data only — not investment advice. 13F positions are self-reported and can lag up to 45 days.
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