Huntington Ingalls (HII) AI Stock Analysis

• Market Cap: $9.13B
• Dividend Yield: 2.32%
• Average Volume (3M): 453.62K
• Price to Earnings (P/E): 16.8
• Beta (1Y): 0.93
• Revenue Growth: -1.04%
• EPS Growth: -21.80%
• Country: US
• Employees: 44,000
• Sector: Industrials
• Sector Strength: 87
• Industry: Aerospace & Defense
• EPS (TTM): 3.79
• Shares Outstanding: 39,239,136
• 10 Day Avg. Volume: 445,881
• 30 Day Avg. Volume: 453,624
• PEG Ratio: 2.29
• Price to Book (P/B): 2.65
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.19
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 0.26
• Enterprise Value/Gross Profit: 8.12
• Enterprise Value/Ebitda: 2.58
• 1Y Price Target: $241.83
• Price Target Upside: 3.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: ―

Huntington Ingalls' overall stock score reflects its stable financial performance, supported by solid profitability and a healthy balance sheet. Positive momentum in technical indicators boosts the score, but challenges in cash flow and revenue growth, along with shipbuilding delays, suggest caution. The stock's valuation is reasonable, and strategic initiatives could enhance future growth, balancing the risks and opportunities.

Positive Factors

Government Funding

The Trump Administration seems inclined to allocate more funds to the shipbuilding industrial base, which could benefit HII.

Growth Forecast

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

Operational Progress

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

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.

Supply Chain Issues

CVN-80 had a negative EAC due to a supply chain delay that won't be resolved until Q3.

Huntington Ingalls Business Overview & Revenue Model

Company Description

Huntington 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 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
	EBIT
530.00M	535.00M	781.00M	773.00M	513.00M	799.00M
	EBITDA
940.00M	1.06B	1.29B	1.18B	1.00B	1.15B
	Net Income Common Stockholders
546.00M	550.00M	681.00M	579.00M	544.00M	696.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
167.00M	831.00M	430.00M	467.00M	627.00M	512.00M
	Total Assets
12.10B	12.14B	11.21B	10.86B	10.63B	8.16B
	Total Debt
3.41B	3.41B	2.67B	3.15B	3.49B	1.84B
	Net Debt
3.24B	2.58B	2.24B	2.68B	2.87B	1.33B
	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: 232.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 232.73 is above the 20-day moving average (MA) of 225.70, above the 50-day MA of 220.69, and above the 200-day MA of 212.82, indicating a bullish trend. The MACD of 1.91 indicates Negative momentum. The RSI at 61.89 is Neutral, neither overbought nor oversold. The STOCH value of 87.53 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
GD	79 Outperform	$75.96B	19.64	18.23%	2.12%	14.11%	17.65%
LMT	78 Outperform	$113.97B	21.01	82.55%	2.71%	3.12%	-15.29%
LHX	76 Outperform	$48.04B	30.46	8.49%	1.87%	5.39%	36.86%
NOC	74 Outperform	$74.37B	20.34	25.41%	1.79%	0.61%	77.28%
HII	71 Outperform	$9.13B	16.77	12.27%	2.32%	-1.04%	-21.80%
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%
BA	58 Neutral	$151.04B	―	-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.