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Huntington Ingalls Industries (HII)
NYSE:HII
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Huntington Ingalls
(NYSE:HII)
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Rating:69Neutral
Price Target:
$414.00
â–¼(-2.68% Downside)
Huntington Ingalls' strong financial performance and positive earnings call sentiment are the most significant factors, reflecting solid revenue growth and operational improvements. However, valuation concerns and technical indicators suggest caution, with potential risks from government shutdowns and contract negotiations.
Positive Factors
Revenue Growth
Strong revenue growth indicates robust demand for HII's products and services, enhancing its market position and financial stability.
Strategic Partnerships
Strategic partnerships in unmanned systems and advanced capabilities strengthen HII's competitive edge and innovation potential.
Operational Improvements
Operational improvements enhance efficiency and productivity, supporting long-term profitability and competitive advantage.
Negative Factors
Free Cash Flow Challenges
Negative free cash flow growth may limit HII's ability to invest in growth opportunities and manage financial obligations effectively.
Potential Government Shutdown Impact
Government shutdown risks could disrupt contract execution and revenue streams, impacting financial performance and stability.
Contract Negotiation Uncertainty
Uncertainty in securing key contracts may affect revenue visibility and margin sustainability, posing risks to future growth.
Huntington Ingalls (HII) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.59B
Dividend Yield1.53%
Average Volume (3M)553.90K
Price to Earnings (P/E)29.2
Beta (1Y)0.80
Revenue Growth2.60%
EPS Growth-18.22%
CountryUS
Employees44,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)3.68
Shares Outstanding39,241,432
10 Day Avg. Volume662,909
30 Day Avg. Volume553,896
Financial Highlights & Ratios
PEG Ratio-0.74
Price to Book (P/B)1.60
Price to Sales (P/S)0.65
P/FCF Ratio286.36
Enterprise Value/Market Cap1.17
Enterprise Value/Revenue1.62
Enterprise Value/Gross Profit12.90
Enterprise Value/Ebitda16.99
Forecast
1Y Price Target
$379.83Price Target Upside-10.71% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Huntington Ingalls Business Overview & Revenue Model
Company DescriptionHuntington Ingalls Industries, Inc. engages in designing, building, overhauling, and repairing military ships in the United States. It operates through three segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Technical Solutions. The company is involved in the design and construction of non-nuclear ships comprising amphibious assault ships; expeditionary warfare ships; surface combatants; and national security cutters for the U.S. Navy and U.S. Coast Guard. It also provides nuclear-powered ships, such as aircraft carriers and submarines, as well as refueling and overhaul, and inactivation services of ships. In addition, the company offers naval nuclear support services, including fleet services comprising design, construction, maintenance, and disposal activities for in-service the U.S. Navy nuclear ships; and maintenance services on nuclear reactor prototypes. Further, it provides life-cycle sustainment services to the U.S. Navy fleet and other maritime customers; high-end information technology and mission-based solutions for Department of Defense (DoD), intelligence, and federal civilian customers; nuclear management and operations and environmental management services for the Department of Energy, DoD, state and local governments, and private sector companies; defense and federal solutions; and unmanned systems. Huntington Ingalls Industries, Inc. was founded in 1886 and is headquartered in Newport News, Virginia.
How the Company Makes MoneyHuntington Ingalls generates revenue primarily through contracts with the U.S. government, particularly the Department of Defense. The company’s revenue model is largely based on fixed-price and cost-plus contracts, which provide stability and predictability in earnings. Key revenue streams include shipbuilding activities, which account for a significant portion of their income, as well as services related to maintenance, repair, and modernization of naval vessels. Additionally, HII engages in partnerships with various defense agencies and other contractors, enhancing its capabilities and expanding its service offerings. The consistent demand for military vessels and related services, along with ongoing government defense budgets, contribute significantly to HII's financial performance.
Huntington Ingalls Key Performance Indicators (KPIs)
Huntington Ingalls Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Positive
The earnings call highlighted record sales, strong backlog, operational improvements, and strategic partnerships, indicating a positive trajectory. However, challenges such as potential government shutdown impacts and ongoing contract negotiations present some uncertainties.Q3-2025 Updates
Positive Updates
Record Third Quarter Sales
HII reported record third quarter sales of $3.2 billion, with shipbuilding sales growth of 18% year-over-year and Mission Technologies sales growth of 11%.
Strong Backlog and Contract Awards
Third quarter contract awards totaled $2 billion, with a backlog of $56 billion, $33 billion of which is funded.
Operational Improvements
HII achieved a 15% throughput improvement for 2025, with significant hiring of over 4,600 shipbuilders year-to-date and improved retention rates.
Strategic Partnerships and Innovations
Key partnerships were announced with Babcock International, Shield AI, and Thales, focusing on unmanned systems and advanced capabilities.
Financial Performance and Guidance
Third quarter revenues increased by 16.1% year-over-year, with segment operating income and margin improvements. Updated free cash flow guidance for 2025 is between $550 million and $650 million.
Negative Updates
Potential Impact of Government Shutdown
Concerns about the federal government's budget appropriations and potential impacts on Mission Technologies programs due to budget timing.
Shipbuilding Contract Negotiations
Uncertainty around the timing of Virginia-Class Block VI and Columbia Build II submarine awards, which could impact shipbuilding margins.
Pre-COVID Contract Challenges
Challenges with contracts predating COVID-19 continue to affect performance, with ongoing efforts to transition to new contracts.
Company Guidance
During the HII Third Quarter 2025 Earnings Conference Call, several key metrics and guidance details were provided. The company reported record third quarter sales of $3.2 billion, representing a 16.1% increase compared to the same period last year, with shipbuilding sales growth of 18% year-over-year. Diluted earnings per share were $3.68. The Mission Technologies division also saw an 11% sales growth, contributing $787 million to the quarterly sales. The company secured $2 billion in contract awards, leading to a backlog of $56 billion, of which $33 billion is funded. HII's operational initiatives aim for a 15% throughput improvement for the full year 2025, despite a slower start to the year. The company updated its 2025 free cash flow guidance to be between $550 million and $650 million and established a cumulative free cash flow target for 2025 and 2026 of $1.2 billion. The outlook for shipbuilding revenue was narrowed to between $9 billion and $9.1 billion, with a reaffirmed shipbuilding margin range of 5.5% to 6.5%. Additionally, Mission Technologies is expected to achieve revenues between $3 billion and $3.1 billion with operating margins of approximately 4.5%.Huntington Ingalls Financial Statement Overview
Summary
Solid overall fundamentals: improving gross margin (27.63% TTM) and better leverage (debt-to-equity 0.59). Offsetting factors include modest net margin (4.74%) and negative free cash flow growth (-10.54% TTM), which temper the quality of earnings and cash generation.Income Statement
Huntington Ingalls has shown consistent revenue growth with a TTM growth rate of 3.83%. The gross profit margin improved significantly to 27.63% in TTM, indicating strong operational efficiency. However, the net profit margin remains modest at 4.74%, suggesting room for improvement in cost management. EBIT and EBITDA margins are stable, reflecting steady core earnings performance.75
Positive
Balance Sheet
The company has improved its debt-to-equity ratio to 0.59 in TTM, indicating better leverage management compared to previous years. Return on equity is stable at 11.79%, showing consistent shareholder returns. The equity ratio is not explicitly calculated, but the balance sheet shows a healthy equity base relative to assets.70
Positive
Cash Flow
Operating cash flow has improved significantly, but free cash flow growth is negative at -10.54% in TTM, indicating potential challenges in cash generation. The operating cash flow to net income ratio is 0.35, suggesting adequate cash conversion. The free cash flow to net income ratio is strong at 0.88, indicating efficient cash utilization relative to earnings.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.01B | 11.54B | 11.45B | 10.68B | 9.52B | 9.36B |
| Gross Profit | 1.50B | 1.45B | 1.65B | 1.44B | 1.37B | 1.67B |
| EBITDA | 1.14B | 1.06B | 1.29B | 1.18B | 1.00B | 1.15B |
| Net Income | 569.00M | 550.00M | 681.00M | 579.00M | 544.00M | 696.00M |
Balance Sheet | ||||||
| Total Assets | 12.31B | 12.14B | 11.21B | 10.86B | 10.63B | 8.16B |
| Cash, Cash Equivalents and Short-Term Investments | 312.00M | 831.00M | 430.00M | 467.00M | 627.00M | 512.00M |
| Total Debt | 2.93B | 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 | 4.98B | 4.67B | 4.09B | 3.49B | 2.81B | 1.90B |
Cash Flow | ||||||
| Free Cash Flow | 823.00M | 26.00M | 678.00M | 482.00M | 429.00M | 740.00M |
| Operating Cash Flow | 937.00M | 393.00M | 970.00M | 766.00M | 760.00M | 1.09B |
| Investing Cash Flow | -497.00M | -348.00M | -236.00M | -268.00M | -1.95B | -759.00M |
| Financing Cash Flow | -138.00M | 356.00M | -771.00M | -658.00M | 1.31B | 103.00M |
Huntington Ingalls Technical Analysis
Positive
425.39
Price Trends
350.72
Positive
319.48
Positive
280.37
Positive
Market Momentum
22.51
Positive
71.69
Negative
62.92
Neutral
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 425.39 is above the 20-day moving average (MA) of 394.88, above the 50-day MA of 350.72, and above the 200-day MA of 280.37, indicating a bullish trend. The MACD of 22.51 indicates Positive momentum. The RSI at 71.69 is Negative, neither overbought nor oversold. The STOCH value of 62.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HII.
Huntington Ingalls Risk Analysis
Huntington Ingalls disclosed 32 risk factors in its most recent earnings report. Huntington Ingalls reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Huntington Ingalls Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $96.87B | 23.34 | 26.17% | 1.55% | -0.14% | 72.35% | |
74 Outperform | $99.03B | 23.73 | 17.66% | 1.73% | 11.86% | 17.39% | |
74 Outperform | $67.44B | 38.71 | 9.13% | 1.61% | 2.83% | 47.00% | |
71 Outperform | $137.67B | 33.21 | 62.78% | 2.77% | 2.88% | -35.15% | |
69 Neutral | $16.59B | 29.21 | 12.39% | 1.53% | 2.60% | -18.22% | |
67 Neutral | $16.61B | 18.44 | 12.24% | 0.09% | 1.83% | -0.73% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
HII
Huntington Ingalls
425.39
234.36
122.68%
GD
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356.68
104.61
41.50%
LHX
L3Harris Technologies
360.30
151.36
72.44%
LMT
Lockheed Martin
597.27
150.78
33.77%
NOC
Northrop Grumman
689.13
214.01
45.04%
TXT
Textron
86.79
10.18
13.29%
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.