Huntington Ingalls (HII) AI Stock Analysis

• Market Cap: $9.89B
• Dividend Yield: 2.14%
• Average Volume (3M): 488.46K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 0.91
• Revenue Growth: -1.04%
• EPS Growth: -21.80%
• Country: US
• Employees: 44,000
• Sector: Industrials
• Sector Strength: 86
• Industry: Aerospace & Defense
• EPS (TTM): 3.79
• Shares Outstanding: 39,239,136
• 10 Day Avg. Volume: 543,965
• 30 Day Avg. Volume: 488,457
• PEG Ratio: -29.46
• Price to Book (P/B): 1.93
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 97.91
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 0.27
• Enterprise Value/Gross Profit: 8.47
• Enterprise Value/Ebitda: 2.69
• 1Y Price Target: $251.00
• Price Target Upside: -0.43% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 72 Outperform
• Price Target: $280.00 ▲(11.08%Upside)

Huntington Ingalls' stock score reflects a stable financial performance, with strong profitability and a solid balance sheet, albeit with cash flow challenges. Technical indicators show bullish trends, though caution is warranted due to overbought conditions. Valuation metrics suggest reasonable pricing, while the latest earnings call highlights both strategic gains and operational challenges that could affect future growth.

Positive Factors

Funding Prospects

Shipbuilding funding prospects have improved, which may mitigate the potential for large, negative charges for some time.

Operational Progress

HII's new SC production facility is online and produced a carrier unit for NNS, indicating operational progress.

Sales Growth Forecast

HII still forecasts $15B in sales by 2030, indicating a target of 5% top-line growth over five years.

Negative Factors

Budget Constraints

Budget constraints and potential shifts in military strategy might threaten HII's position in shipbuilding contracts.

Execution Challenges

HII's stock fell significantly after reporting earnings, highlighting concerns about its execution challenges.

Schedule Delays

There is concern over HII’s 'ever-deferring' schedule of milestones, leading to cautious investor sentiment.

Huntington Ingalls Business Overview & Revenue Model

Company Description

Huntington Ingalls Industries (HII) is America's largest military shipbuilding company and a significant provider of professional services to partners in government and industry. Headquartered in Newport News, Virginia, HII operates through three primary divisions: Newport News Shipbuilding, Ingalls Shipbuilding, and Technical Solutions. The company specializes in designing, building, and maintaining nuclear and non-nuclear ships for the United States Navy and Coast Guard, as well as providing a wide range of technical and engineering services.

How the Company Makes Money

Huntington Ingalls Industries generates revenue primarily through its shipbuilding contracts with the U.S. Department of Defense. HII's Newport News and Ingalls Shipbuilding divisions construct and overhaul aircraft carriers, submarines, and other naval vessels, which are substantial projects typically secured through long-term government contracts. These contracts often include fixed-price or cost-plus arrangements, providing a steady income stream. Additionally, HII's Technical Solutions division offers services such as fleet support, mission-driven innovative solutions, and nuclear and environmental services, further diversifying its revenue sources. Strategic partnerships with government agencies and industry stakeholders also play a crucial role in securing and executing these contracts, contributing significantly to the company's earnings.

Huntington Ingalls Financial Statement Overview

Summary

Huntington Ingalls demonstrates solid profitability with stable margins, a reasonable debt level, and improving equity position. Challenges exist in cash flow generation and revenue growth, indicating areas for strategic improvement.

Income Statement

Huntington Ingalls demonstrates strong profitability with a consistent gross profit margin around 25% to 26% over the years. The net profit margin has remained stable, observed at approximately 4.8% in the TTM. Revenue growth has been moderate, showing a compound annual growth rate of about 3.3% since 2020. EBIT and EBITDA margins suggest a stable operational performance, though there is a slight decline in EBIT margin in recent periods. Overall, the company shows steady profitability with room for improvement in revenue growth.

Balance Sheet

The balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.71 in the TTM, showing a reduction from previous years. The equity ratio is improving, reaching 39.4% in the TTM, indicating an increasing equity base. Return on equity is solid at around 11.4% in the TTM, down from previous highs, suggesting some pressure on profitability. The company maintains a stable financial position, though continued focus on reducing debt could enhance financial flexibility.

Cash Flow

The cash flow analysis reveals a decline in operating cash flow over recent periods, with the operating cash flow to net income ratio dropping to 0.37 in the TTM. Free cash flow has fluctuated, showing negative growth, which impacts the free cash flow to net income ratio. Despite these fluctuations, the company is maintaining positive free cash flow. Improving operational efficiency could strengthen cash flow metrics further.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.46B	11.54B	11.45B	10.68B	9.52B	9.36B
Gross Profit	1.47B	1.45B	1.65B	1.44B	1.37B	1.67B
EBITDA	940.00M	1.06B	1.29B	1.18B	1.00B	1.15B
Net Income	546.00M	550.00M	681.00M	579.00M	544.00M	696.00M
Balance Sheet
Total Assets	12.10B	12.14B	11.21B	10.86B	10.63B	8.16B
Cash, Cash Equivalents and Short-Term Investments	167.00M	831.00M	430.00M	467.00M	627.00M	512.00M
Total Debt	3.41B	3.41B	2.67B	3.15B	3.49B	1.84B
Total Liabilities	7.33B	7.47B	7.12B	7.37B	7.82B	6.26B
Stockholders Equity	4.77B	4.67B	4.09B	3.49B	2.81B	1.90B
Cash Flow
Free Cash Flow	94.00M	26.00M	678.00M	482.00M	429.00M	740.00M
Operating Cash Flow	200.00M	393.00M	970.00M	766.00M	760.00M	1.09B
Investing Cash Flow	-476.00M	-348.00M	-236.00M	-268.00M	-1.95B	-759.00M
Financing Cash Flow	433.00M	356.00M	-771.00M	-658.00M	1.31B	103.00M

Huntington Ingalls Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 252.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HII, the sentiment is Positive. The current price of 252.08 is above the 20-day moving average (MA) of 234.75, above the 50-day MA of 229.50, and above the 200-day MA of 211.13, indicating a bullish trend. The MACD of 6.00 indicates Negative momentum. The RSI at 73.39 is Negative, neither overbought nor oversold. The STOCH value of 95.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HII.

Huntington Ingalls Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LMT	80 Outperform	$108.37B	19.98	82.55%	2.85%	3.12%	-15.29%
GD	79 Outperform	$79.11B	20.46	18.23%	2.04%	14.11%	17.65%
LHX	76 Outperform	$47.81B	30.31	8.49%	1.88%	5.39%	36.86%
NOC	74 Outperform	$72.57B	19.84	25.41%	1.83%	0.61%	77.28%
HII	72 Outperform	$9.89B	18.17	12.27%	2.14%	-1.04%	-21.80%
Sector *	67 Neutral	€8.33B	18.42	6.19%	2.69%	2.39%	-39.55%
BA	52 Neutral	$162.80B	―	-162.23%	―	-9.15%	-406.76%

Huntington Ingalls Corporate Events

Huntington Ingalls Announces Key Leadership Changes

Huntington Ingalls Industries (HII), the largest military shipbuilder in the U.S., has announced leadership changes with Kari Wilkinson set to become the new president of Newport News Shipbuilding, effective January 2025. Wilkinson, who has successfully led Ingalls Shipbuilding, will succeed Jennifer Boykin as she retires. Concurrently, Brian Blanchette will take over Wilkinson’s role at Ingalls Shipbuilding, bringing over two decades of experience to his new position. These transitions aim to continue HII’s legacy of delivering critical shipbuilding capabilities vital to national security.