QinetiQ (GB:QQ)
LSE:QQ
Want to see GB:QQ full AI Analyst Report?
Top Page
QinetiQ
(LSE:QQ)
Select Model
Select Model
Rating:68Neutral
Price Target:
524.00 p
▲(8.18% Upside)
Action:Reiterated
Date:05/28/26
The score is driven mainly by solid cash generation and a constructive earnings-call outlook supported by a significantly stronger backlog and clear cash/shareholder-return targets. Offsetting these positives are recent revenue and profitability volatility, rising leverage versus earlier years, and only middling valuation support; technicals are favorable but look somewhat extended near-term.
Positive Factors
Cash generation & conversion
Consistent positive operating cash flow and a material free-cash-flow uplift in FY26 underpin durable internal funding. High cash conversion strengthens the company's ability to fund capex, sustain dividends and buybacks, and absorb near-term volatility without relying on external financing.
Negative Factors
Revenue volatility & recent contraction
A large reported top-line drop and swing to a loss in 2025 highlight instability in demand mix and contract timing. Persistent revenue and margin volatility reduce predictability of earnings, complicate planning, and make sustained margin targets harder to rely on without clearer award cadence.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & conversion
Consistent positive operating cash flow and a material free-cash-flow uplift in FY26 underpin durable internal funding. High cash conversion strengthens the company's ability to fund capex, sustain dividends and buybacks, and absorb near-term volatility without relying on external financing.
Read all positive factors
QinetiQ (QQ) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£2.60B
Dividend Yield2%
Average Volume (3M)1.20M
Price to Earnings (P/E)24.5
Beta (1Y)1.00
Revenue Growth-0.47%
EPS GrowthN/A
CountryUK
Employees8,500
SectorGeneral
Sector StrengthN/A
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.20
Shares Outstanding520,063,300
10 Day Avg. Volume1,056,778
30 Day Avg. Volume1,195,703
Financial Highlights & Ratios
PEG Ratio-0.14
Price to Book (P/B)4.40
Price to Sales (P/S)1.26
P/FCF Ratio14.12
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£513.33Price Target Upside5.97% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)0.34
Revenue Forecast (FY)£2.01B
QinetiQ Business Overview & Revenue Model
Company Description
QinetiQ Group plc operates as a science and engineering company primarily in the defense, security, and infrastructure markets in the United States, Australia, Europe, and internationally. The company operates through EMEA Services and Global Prod...
How the Company Makes Money
QinetiQ makes money primarily by delivering contracted services and solutions to defence and security customers, with revenues largely derived from long-term and multi-year contracts. Key revenue streams include: (1) Services and engineering suppo...
QinetiQ Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive picture: management delivered a resilient year with restored margins, record order intake and significantly stronger cash generation, and set clear medium-term cash and return targets. These positives are tempered by identifiable headwinds — most notably a challenging U.S. market, some contract losses and one‑off restructuring/exceptional cash effects — and guidance upside depends on budget clarity and award timing. On balance the highlights materially outweigh the lowlights, reflecting a constructive outlook supported by a larger, higher-quality backlog and strengthened capital allocation.Positive Updates
Resilient full-year financial performance
Revenue just over GBP 1.9 billion; operating profit GBP 218 million (up 18% year-on-year); operating margin 11.3% (return to upper-quartile levels); EPS 31.5p (up 21%); free cash flow GBP 159 million (up c.41%); cash conversion 100%; return on capital employed 34%; net debt GBP 159 million with leverage 0.5x.
Negative Updates
Challenging U.S. market and U.S. business under review
U.S. defense services market impacted by budgetary pressures, shift to platform/hardware, slower contract awards and margin compression; U.S. revenue approximately $385 million. Management completed disposals and exits (Fed IT disposed) and significant cost/headcount reductions, and is actively assessing all options for the U.S. business to enhance shareholder value.
Read all updates
Q4-2026 Updates
Positive
Negative
Resilient full-year financial performance
Revenue just over GBP 1.9 billion; operating profit GBP 218 million (up 18% year-on-year); operating margin 11.3% (return to upper-quartile levels); EPS 31.5p (up 21%); free cash flow GBP 159 million (up c.41%); cash conversion 100%; return on capital employed 34%; net debt GBP 159 million with leverage 0.5x.
Read all positive updates
Company Guidance
QinetiQ guided to FY‑27 revenue growth of 3–5% (higher end dependent on budget clarity), underlying margin of 11–11.5%, and cash conversion greater than 90%, while introducing a three‑year free cash flow target of >£550m (FY‑27 to FY‑29); they expect EPS to grow 8–10%, will move to a 35–40% dividend payout ratio (FY‑26 dividend 11p, +24%), have extended a £200m share buyback through to 2029 (~£100m p.a.) and expect to return roughly £0.5bn to shareholders over three years — all supported by a £4.8bn backlog (+41%), £3.6bn order intake, book‑to‑bill of 1.14, contracted revenue cover of 67%, year‑end net debt £159m (leverage 0.5x), ROCE guidance 25–30%, and FY‑26 capex of £72m.QinetiQ Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
62
Positive
Cash Flow
71
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.92B | 1.93B | 1.91B | 1.58B | 1.32B |
| Gross Profit | 193.40M | 1.93B | 268.70M | 480.50M | 416.40M |
| EBITDA | 283.70M | 26.20M | 292.90M | 226.70M | 176.60M |
| Net Income | 107.50M | -185.70M | 139.60M | 154.40M | 90.00M |
Balance Sheet | |||||
| Total Assets | 1.74B | 1.83B | 2.11B | 2.10B | 1.79B |
| Cash, Cash Equivalents and Short-Term Investments | 259.20M | 290.60M | 231.00M | 155.60M | 248.30M |
| Total Debt | 410.30M | 428.90M | 391.80M | 368.90M | 22.10M |
| Total Liabilities | 1.19B | 1.20B | 1.18B | 1.13B | 746.70M |
| Stockholders Equity | 553.00M | 626.50M | 926.10M | 968.30M | 1.04B |
Cash Flow | |||||
| Free Cash Flow | 172.20M | 112.50M | 146.80M | 97.00M | 106.40M |
| Operating Cash Flow | 231.80M | 221.30M | 243.10M | 206.00M | 190.70M |
| Investing Cash Flow | -54.60M | 400.00K | -99.10M | -464.40M | -83.60M |
| Financing Cash Flow | -208.20M | -158.40M | -63.20M | 159.70M | -50.40M |
QinetiQ Technical Analysis
Positive
484.40
Price Trends
460.35
Positive
481.82
Positive
474.55
Positive
Market Momentum
8.83
Negative
70.73
Negative
91.39
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:QQ, the sentiment is Positive. The current price of 484.4 is above the 20-day moving average (MA) of 443.55, above the 50-day MA of 460.35, and above the 200-day MA of 474.55, indicating a bullish trend. The MACD of 8.83 indicates Negative momentum. The RSI at 70.73 is Negative, neither overbought nor oversold. The STOCH value of 91.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:QQ.
QinetiQ Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | £635.66M | 34.51 | 11.27% | 1.58% | 23.91% | -14.66% | |
69 Neutral | £59.36B | 29.44 | 18.23% | 1.99% | 7.69% | 7.29% | |
68 Neutral | £2.60B | 24.45 | 19.34% | 2.00% | -0.47% | ― | |
63 Neutral | £1.49B | 30.83 | 13.12% | 1.64% | -2.53% | 22.25% | |
58 Neutral | £515.05M | 42.75 | 9.32% | 1.02% | 4.62% | 170.53% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
41 Neutral | £28.45M | -10.32 | 192.83% | ― | ― | ― |
* General Sector Average
GB:QQ
QinetiQ
503.50
-6.65
-1.30%
GB:BA
BAE Systems
2,023.00
137.91
7.32%
GB:AVON
Avon Technologies
1,734.00
-38.17
-2.15%
GB:CHG
Chemring
549.00
69.67
14.54%
GB:CHRT
Cohort plc
1,382.00
-139.42
-9.16%
GB:ALRT
Defence Holdings
1.15
0.44
61.06%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.