Northrop Grumman (NOC)
Industrials · $76.6B market cap · SEC CIK 0001133421
ahead of 24% of the S&P 500 · #64 of 79 in Industrials
Next reports on Jan 25, 2027, after the close, with analysts expecting $8.02 in earnings per share.
52-week range $470.06 to $774.00. 29% below its 52-week high and 17% above its low.
The case for NOC
- Earns 26% back on shareholder equity.
- Moves less than the market (beta −0.16).
- Pays a modest 1.6% dividend.
- P/E of 16.9× is lower than 91% of Industrials companies.
The case against
- Growth is weak (38/100): revenue +6.5%, EPS +14.0%, +2.7% a year over five years.
- Profitability is weak (41/100): return on equity 26%, net margin 10.4%, gross margin 20%, 79% of profit turned to cash.
- The price trend is weak (33/100): −5.2% over a year, −6.7% over three months, 29% below its 52-week high.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Industrials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 56 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 38 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 41 |
| Momentumhow the price has behaved lately | 33 |
| Stabilityhow violently it moves, what it owes and what it pays you | 65 |
- Each factor except momentum is half fixed thresholds, half rank among the 79 Industrials companies.
The financials
Revenue growth
Is the business growing? Slowly
| Last 12 months | +6.5% |
|---|---|
| Over 5 years | +2.7% a year |
| FY2025 revenue | $42.0B (+2%) |
Free cash flow
Is it generating real cash? Yes
| FY2025 free cash flow | $3.3B |
|---|---|
| Of revenue | 8% |
| Of profit | 79% |
Profit margins
Is profitability improving? Holding steady
| Gross margin | 20% |
|---|---|
| Operating margin | 11% |
| Net margin, FY24 → FY25 → now | 10.2% → 10.0% → 10.4% |
Debt vs. cash
Is the balance sheet healthy? Mostly, with some debt to carry
| Cash | $4.4B |
|---|---|
| Long-term debt | $15.2B |
| Net debt | $10.8B |
| Years to repay | 3.2 yrs |
Valuation
Is the stock price reasonable? Yes, about fair
| P/E | 16.9× |
|---|---|
| Fair P/E for its growth | 19× |
| P/FCF | 23.2× |
| Forward P/E | 18.7× |
| EV / EBITDA | 14.3× |
At 16.9× earnings it trades close to the 19× that 6% a year of growth plus a 1.6% dividend would justify. At 23.2× free cash flow it trades close to that same mark.
The financials, five years deep
Pulled from Northrop Grumman's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $42.0B | $41.0B | $39.3B | $36.6B | $35.7B |
| Change on the year | +2% | +4% | +7% | +3% | — |
| Free cash flow | |||||
| Free cash flow | $3.3B | $2.6B | $2.1B | $1.5B | $2.2B |
| Of revenue | 8% | 6% | 5% | 4% | 6% |
| Profit margins | |||||
| Operating margin | 10.8% | 10.6% | 6.5% | 9.8% | 15.8% |
| Net margin | 10.0% | 10.2% | 5.2% | 13.4% | 19.6% |
| Debt vs. cash | |||||
| Cash | $4.4B | $4.4B | $3.1B | $2.6B | $3.5B |
| Long-term debt | $15.2B | $14.7B | $13.8B | $11.8B | $12.8B |
| Net cash (debt) | −$10.8B | −$10.3B | −$10.7B | −$9.2B | −$9.2B |
What Northrop Grumman says it does
HISTORY AND ORGANIZATION History Northrop Grumman Corporation (herein referred to as “Northrop Grumman,” the “company,” “we,” “us,” or “our”) is a leading global aerospace and defense technology company. We deliver a broad range of products, services and solutions to U.S. and international customers, and principally to the U.S. Department of War (“DoW”) and intelligence community. Our broad portfolio is aligned to support national security priorities and our solutions equip our customers with capabilities they need to connect, protect and advance humanity. The company is a leading provider of space systems, military aircraft, missile defense, advanced weapons and long-range fires capabilities, mission systems, networking and communications, strategic deterrence systems, and breakthrough technologies, such as advanced computing, microelectronics and cyber. We are focused on competing and winning programs that enable continued growth,…
Risk factors NOC lists in its 10-K
- Competitive dynamics within our markets may affect our ability to win new contracts and result in reduced revenues, which could have a material adverse effect on our financial position, results of operations and/or cash flows
- Cyber and other security threats or disruptions could have a material adverse effect on our reputation and our financial position, results of operations and/or cash flows
- Our business is subject to significant disruptions caused by natural disasters or other events outside of our control, which could have a material adverse effect on our financial position, results of operations and/or cash flows
- Business investments and/or recorded goodwill and other long-lived assets may become impaired, which could have a material adverse effect on our financial condition and/or results of operations