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Huntington Ingalls Industries (HII)
NYSE:HII

Huntington Ingalls (HII) AI Stock Analysis

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Huntington Ingalls

(NYSE:HII)

Rating:72Outperform
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 (HII) vs. SPDR S&P 500 ETF (SPY)

Huntington Ingalls Business Overview & Revenue Model

Company DescriptionHuntington 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 MoneyHuntington 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 Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 10.10%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed outlook. While there were positive developments in operational initiatives, strategic contract wins, and achievements in Mission Technologies, the company faced challenges with revenue decline, shipbuilding delays at Newport News, and negative free cash flow.
Q1-2025 Updates
Positive Updates
Operational Initiatives Progress
HII made progress against its goal of improving shipbuilding throughput by 20% year-over-year. Ingalls is largely on plan, while Newport News is slightly behind due to atypical weather and equipment delays.
Strategic Contract Wins
HII secured an agreement on the Block V FY 2024 II Built contract and is focusing on future contracts like Block VI and Columbia Build II. The company also announced a partnership with HD Hyundai Heavy Industries to explore collaborations in shipbuilding.
First Quarter Revenue
First quarter revenue was $2.7 billion with earnings per share of $3.79. The company ended the quarter with a backlog of $48 billion, of which $28 billion is funded.
Mission Technologies Achievements
The division delivered Lionfish small uncrewed undersea vehicles to the U.S. Navy and was selected to develop a laser counter-drone system for the U.S. Army. The division also surpassed 700 Remus Uncrewed underwater vehicles sold.
Negative Updates
Revenue Decline
First quarter revenues of approximately $2.7 billion decreased by 2.5% compared to the same period last year, attributed to declines at Newport News Shipbuilding, Ingalls Shipbuilding, and Mission Technologies.
Shipbuilding Delays
Newport News is modestly behind plan, with significant variance in CVN 80 due to late major equipment delivery, impacting the construction approach.
Negative Free Cash Flow
Free cash flow in the quarter was negative $462 million, attributed to timing of incentives and normal fluctuations in program receipts and disbursements.
Company Guidance
During the HII First Quarter 2025 Earnings Conference Call, several key metrics and guidance points were discussed. The company reported first quarter revenue of $2.7 billion and earnings per share of $3.79, with a backlog totaling $48 billion, of which $28 billion is funded. HII aims to achieve $250 million in annualized cost reductions by the end of the year. The company is focused on improving shipbuilding throughput by 20% year-over-year, although Newport News Shipbuilding faced some delays, particularly with the CVN 80 due to late equipment delivery. HII also reaffirmed its guidance for 2025, projecting significant growth with a forecast of $15 billion in revenue by 2030, as well as margin and free cash flow normalization. Additionally, the company expects to achieve over $50 billion in awards across 2025 and 2026. The first quarter saw segment operating income of $171 million, with a consolidated operating margin of 5.9%. Free cash flow was negative at $462 million, within the guidance range, and the company maintained its 2025 guidance, anticipating second quarter shipbuilding sales of approximately $2.2 billion.

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
72
Positive
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
68
Positive
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
65
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue11.46B11.54B11.45B10.68B9.52B9.36B
Gross Profit1.47B1.45B1.65B1.44B1.37B1.67B
EBITDA940.00M1.06B1.29B1.18B1.00B1.15B
Net Income546.00M550.00M681.00M579.00M544.00M696.00M
Balance Sheet
Total Assets12.10B12.14B11.21B10.86B10.63B8.16B
Cash, Cash Equivalents and Short-Term Investments167.00M831.00M430.00M467.00M627.00M512.00M
Total Debt3.41B3.41B2.67B3.15B3.49B1.84B
Total Liabilities7.33B7.47B7.12B7.37B7.82B6.26B
Stockholders Equity4.77B4.67B4.09B3.49B2.81B1.90B
Cash Flow
Free Cash Flow94.00M26.00M678.00M482.00M429.00M740.00M
Operating Cash Flow200.00M393.00M970.00M766.00M760.00M1.09B
Investing Cash Flow-476.00M-348.00M-236.00M-268.00M-1.95B-759.00M
Financing Cash Flow433.00M356.00M-771.00M-658.00M1.31B103.00M

Huntington Ingalls Technical Analysis

Technical Analysis Sentiment
Positive
Last Price252.08
Price Trends
50DMA
229.50
Positive
100DMA
210.26
Positive
200DMA
211.13
Positive
Market Momentum
MACD
6.00
Negative
RSI
73.39
Negative
STOCH
95.48
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 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

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
LMLMT
80
Outperform
$108.37B19.9882.55%2.85%3.12%-15.29%
GDGD
79
Outperform
$79.11B20.4618.23%2.04%14.11%17.65%
LHLHX
76
Outperform
$47.81B30.318.49%1.88%5.39%36.86%
NONOC
74
Outperform
$72.57B19.8425.41%1.83%0.61%77.28%
HIHII
72
Outperform
$9.89B18.1712.27%2.14%-1.04%-21.80%
67
Neutral
€8.33B18.426.19%2.69%2.39%-39.55%
BABA
52
Neutral
$162.80B-162.23%-9.15%-406.76%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HII
Huntington Ingalls
252.08
15.14
6.39%
BA
Boeing
215.92
30.08
16.19%
GD
General Dynamics
294.76
20.05
7.30%
LHX
L3Harris Technologies
255.73
34.23
15.45%
LMT
Lockheed Martin
462.52
12.63
2.81%
NOC
Northrop Grumman
504.20
81.38
19.25%

Huntington Ingalls Corporate Events

Executive/Board Changes
Huntington Ingalls Announces Key Leadership Changes
Neutral
Nov 7, 2024

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.

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.Date of analysis: Jul 05, 2025