Northrop Grumman (NOC) AI Stock Analysis

• Market Cap: $83.08B
• Dividend Yield: 1.46%
• Average Volume (3M): 777.50K
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.22
• Revenue Growth: -0.65%
• EPS Growth: 77.20%
• Country: US
• Employees: 97,000
• Sector: Industrials
• Sector Strength: 85
• Industry: Aerospace & Defense
• EPS (TTM): 8.15
• Shares Outstanding: 143,182,980
• 10 Day Avg. Volume: 812,627
• 30 Day Avg. Volume: 777,503
• PEG Ratio: 0.15
• Price to Book (P/B): 4.51
• Price to Sales (P/S): 1.68
• P/FCF Ratio: 26.32
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 2.16
• Enterprise Value/Gross Profit: 11.19
• Enterprise Value/Ebitda: 12.84
• 1Y Price Target: $610.14
• Price Target Upside: 5.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 71 Outperform
• Price Target: $627.00 ▲(7.95% Upside)

Northrop Grumman's overall score reflects strong earnings call results and solid financial performance, tempered by technical analysis suggesting caution due to overbought conditions. The company’s valuation is reasonable but requires sustained growth to justify the current P/E ratio.

Positive Factors

Financial Performance

Q2's sales/EPS beats mark a strong rebound from Q1's slow start.

International Sales

International sales drove growth in 2Q, up 18% and continuing to benefit from foreign defense spending and increased availability of program exports.

Program Development

Marquee programs including B-21 and Sentinel continue to develop favorably, while NOC remains confident it can compete on emerging opportunities including space, unmanned systems, and international demand.

Negative Factors

Program Competition

Softer Space Systems 2025 outlook is due to Northrop Grumman's loss on the Evolved Strategic Satellite Communications program to Boeing.

Northrop Grumman Business Overview & Revenue Model

Company Description

Northrop Grumman Corporation (NOC) is a global aerospace and defense technology company headquartered in Falls Church, Virginia. The company operates in four primary sectors: Aerospace Systems, Defense Systems, Mission Systems, and Space Systems. Northrop Grumman is known for its advanced technologies and systems, including unmanned systems, cyber solutions, C4ISR (command, control, communications, computers, intelligence, surveillance, and reconnaissance) systems, and missile defense systems. The company serves a diverse range of clients, including the U.S. Department of Defense, international governments, and commercial customers, providing critical solutions for national security and space exploration.

How the Company Makes Money

Northrop Grumman generates revenue primarily through government contracts, which make up a significant portion of its earnings. The company is a major contractor for the U.S. Department of Defense, providing high-tech systems and services that are essential for military operations. Key revenue streams include the development and production of military aircraft, unmanned systems, missile systems, and cybersecurity solutions. Additionally, Northrop Grumman engages in various partnerships and collaborations with other defense contractors and technology firms, which further enhance its capabilities and market reach. The company's revenue is bolstered by long-term contracts and sustainment services, which provide reliable income over extended periods. Furthermore, Northrop Grumman's involvement in space exploration, including contracts with NASA and other commercial partnerships, contributes to its financial performance as the demand for space-based technologies and services continues to grow.

Northrop Grumman Financial Statement Overview

Summary

Northrop Grumman demonstrates strong profitability with healthy margins and efficient asset management typical for the industry. However, the recent decline in revenue growth and a significant drop in free cash flow generation are concerns. The balance sheet shows moderate leverage, indicating some exposure to interest rate increases.

Income Statement

The TTM (Trailing-Twelve-Months) gross profit margin is approximately 19.33%, indicating a solid level of efficiency in managing production costs relative to revenue. The net profit margin stands at 9.74%, reflecting healthy profitability, although it has slightly decreased from the previous year. Revenue growth is slightly negative at -1.29% compared to the previous year, suggesting a minor contraction. The EBIT margin is 9.82%, while the EBITDA margin is 16.86%, both demonstrating stable operational profitability.

Balance Sheet

The debt-to-equity ratio is 1.13, showing a moderate level of leverage, which is typical for the industry but suggests potential exposure to interest rate increases. The return on equity (ROE) is robust at 25.50%, highlighting strong profitability for shareholders. The equity ratio is 31.28%, indicating a balanced capital structure and a solid asset management strategy.

Cash Flow

The free cash flow has declined by 50.10% compared to the previous year, pointing to challenges in cash generation. The operating cash flow to net income ratio is 0.75, which is lower than desired, suggesting that earnings are not fully translating to cash flow. The free cash flow to net income ratio is 0.33, indicating limited cash flow relative to reported profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	40.50B	41.03B	39.29B	36.60B	35.67B	36.80B
Gross Profit	7.83B	8.36B	6.55B	7.47B	7.27B	7.48B
EBITDA	6.83B	6.84B	4.23B	7.68B	8.73B	5.59B
Net Income	3.94B	4.17B	2.06B	4.90B	7.00B	3.19B
Balance Sheet
Total Assets	49.45B	49.36B	46.54B	43.76B	42.58B	44.47B
Cash, Cash Equivalents and Short-Term Investments	1.90B	4.35B	3.11B	2.58B	3.53B	4.91B
Total Debt	17.52B	18.40B	16.05B	15.00B	14.66B	16.61B
Total Liabilities	33.98B	34.07B	31.75B	28.44B	29.65B	33.89B
Stockholders Equity	15.47B	15.29B	14.79B	15.31B	12.93B	10.58B
Cash Flow
Free Cash Flow	1.31B	2.62B	2.10B	1.47B	2.15B	2.88B
Operating Cash Flow	2.97B	4.39B	3.88B	2.90B	3.57B	4.30B
Investing Cash Flow	-1.35B	-1.75B	-1.58B	-1.24B	2.06B	-1.21B
Financing Cash Flow	-3.00B	-1.40B	-1.76B	-2.61B	-7.00B	-432.00M

Northrop Grumman Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 580.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOC, the sentiment is Positive. The current price of 580.8 is above the 20-day moving average (MA) of 566.23, above the 50-day MA of 525.87, and above the 200-day MA of 493.14, indicating a bullish trend. The MACD of 18.48 indicates Positive momentum. The RSI at 70.96 is Negative, neither overbought nor oversold. The STOCH value of 46.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NOC.

Northrop Grumman Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HII	78 Outperform	$10.46B	19.97	11.59%	2.01%	-1.75%	-29.19%
LHX	77 Outperform	$50.58B	30.18	8.90%	1.75%	2.93%	43.29%
GD	76 Outperform	$84.71B	21.15	17.91%	1.85%	11.85%	16.12%
NOC	71 Outperform	$83.08B	21.34	26.50%	1.46%	-0.65%	77.20%
LMT	64 Neutral	$99.37B	23.96	73.06%	3.02%	1.09%	-35.50%
Sector *	59 Neutral	AU$1.63B	10.85	-5.90%	3.59%	9.81%	6.78%
BA	56 Neutral	$170.86B	―	-162.23%	―	2.41%	-193.57%

Northrop Grumman Corporate Events

Northrop Grumman Issues $1 Billion in Senior Notes

On May 29, 2025, Northrop Grumman Corporation issued $1 billion in senior notes, with $500 million due in 2030 and another $500 million due in 2035. The issuance, underwritten by major financial institutions, is part of the company’s strategic financial management, potentially impacting its operational flexibility and market positioning.

The most recent analyst rating on (NOC) stock is a Buy with a $587.00 price target. To see the full list of analyst forecasts on Northrop Grumman stock, see the NOC Stock Forecast page.

Northrop Grumman Announces $1 Billion Notes Offering

On May 27, 2025, Northrop Grumman announced the pricing of a $1.0 billion underwritten public offering of senior unsecured notes, consisting of $500 million of 4.650% notes due 2030 and $500 million of 5.250% notes due 2035. The proceeds are intended for general corporate purposes, including debt repayment, share repurchases, and working capital, with the offering expected to close on May 29, 2025, subject to customary conditions.

The most recent analyst rating on (NOC) stock is a Buy with a $587.00 price target. To see the full list of analyst forecasts on Northrop Grumman stock, see the NOC Stock Forecast page.

Northrop Grumman Shareholders Approve Key Proposals at Meeting

At Northrop Grumman‘s 2025 Annual Meeting of Shareholders on May 21, 2025, shareholders approved the election of twelve directors, the compensation of named executive officers, and the appointment of Deloitte & Touche LLP as the independent auditor for 2025. However, a shareholder proposal to enhance the clawback policy on unearned executive pay was not approved. The Board of Directors will consider shareholder input and feedback from the meeting.

The most recent analyst rating on (NOC) stock is a Buy with a $587.00 price target. To see the full list of analyst forecasts on Northrop Grumman stock, see the NOC Stock Forecast page.