What Happened?

Shares of aerospace and defense company Hexcel (NYSE: HXL) jumped 15.2% in the afternoon session after its third-quarter 2025 earnings report presented a mixed picture that investors ultimately viewed in a positive light. 

The company's revenue of $456.2 million beat Wall Street's expectations, and it generated a robust free cash flow margin of 21.2%, up significantly from 16.1% in the same quarter last year. This strong cash generation appeared to outweigh concerns from an adjusted earnings per share of $0.37 that was in line with consensus estimates. In a note of caution, Hexcel also lowered its revenue and earnings guidance for the full year, but investors seemingly focused on the quarter's top-line strength and operational cash performance.

Is now the time to buy Hexcel? Access our full analysis report here.

What Is The Market Telling Us

Hexcel’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Hexcel and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 27 days ago when the stock gained 3.8% on the news that a key inflation data aligned with forecasts, bolstering hopes for continued interest rate cuts from the Federal Reserve. 

The Personal Consumption Expenditures (PCE) price index, the central bank's preferred gauge of inflation, showed a slight year-over-year increase in August but did not surprise economists. This report was met with relief on Wall Street, as it suggests inflationary pressures remain contained, giving the Federal Reserve more leeway to continue its monetary easing policy. Investors interpreted the news as a positive sign that the Fed can support the economy without risking runaway inflation. The positive sentiment helped the major indices claw back some of the losses from a recent three-day slide, with stocks rising across various sectors.

Hexcel is up 18.1% since the beginning of the year, and at $72.98 per share, has set a new 52-week high. Investors who bought $1,000 worth of Hexcel’s shares 5 years ago would now be looking at an investment worth $2,056.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.