Northrop Grumman (NOC) AI Stock Analysis

• Market Cap: $83.27B
• Dividend Yield: 1.5%
• Average Volume (3M): 772.09K
• Price to Earnings (P/E): 20.9
• Beta (1Y): 0.15
• Revenue Growth: -0.14%
• EPS Growth: 72.35%
• Country: US
• Employees: 97,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 7.67
• Shares Outstanding: 142,720,060
• 10 Day Avg. Volume: 872,189
• 30 Day Avg. Volume: 772,092
• PEG Ratio: 0.15
• Price to Book (P/B): 4.51
• Price to Sales (P/S): 1.68
• P/FCF Ratio: 26.32
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 2.52
• Enterprise Value/Gross Profit: 12.95
• Enterprise Value/Ebitda: 14.69
• 1Y Price Target: $688.90
• Price Target Upside: 18.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 75 Outperform
• Price Target: $658.00 ▲(12.78% Upside)

Northrop Grumman's strong financial performance and positive earnings call are the primary drivers of its overall score. The company's robust profitability, improved leverage, and significant free cash flow growth highlight its financial strength. However, technical analysis indicates some bearish momentum, and valuation metrics suggest the stock is moderately priced. Concerns from the earnings call, such as revised revenue guidance and potential impacts from government shutdowns, also weigh on the score.

Positive Factors

International Growth

Strong international growth enhances market diversification and reduces dependency on domestic contracts, supporting long-term revenue stability.

Free Cash Flow Increase

Significant free cash flow growth indicates robust cash generation, providing flexibility for strategic investments and debt reduction.

Investment in Technology

Heavy investment in technology positions Northrop Grumman as a leader in innovation, enhancing competitive advantage and future growth potential.

Negative Factors

Revenue Guidance Revision

Revised revenue guidance suggests potential challenges in achieving growth targets, impacting investor confidence and long-term financial projections.

Space Segment Challenges

Challenges in the space segment may hinder growth prospects, affecting the company's ability to capitalize on the expanding space industry.

Impact of U.S. Government Shutdown

Government shutdowns pose risks to contract timing and funding, potentially disrupting revenue streams and operational planning.

Northrop Grumman Business Overview & Revenue Model

Company Description

Northrop Grumman Corporation operates as an aerospace and defense company worldwide. The company's Aeronautics Systems segment designs, develops, manufactures, integrates, and sustains aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic ISR systems and vertical take-off and landing tactical ISR systems; and strategic long-range strike aircraft, tactical fighter and air dominance aircraft, and airborne battle management and command and control systems. Its Defense Systems segment designs, develops, and produces weapons and mission systems. It offers products and services, such as integrated battle management systems, weapons systems and aircraft, and mission systems. This segment also provides command and control and weapons systems, including munitions and missiles; precision strike weapons; propulsion, such as air-breathing and hypersonic systems; gun systems and precision munitions; life cycle service and support for software, weapons systems, and aircraft; and logistics support, sustainment, operation, and modernization for air, sea, and ground systems. The company's Mission Systems segment offers cyber, command, control, communications and computers, intelligence, surveillance, and reconnaissance systems; radar, electro-optical/infrared and acoustic sensors; electronic warfare systems; advanced communications and network systems; cyber solutions; intelligence processing systems; navigation; and maritime power, propulsion, and payload launch systems. This segment also provides airborne multifunction sensors; maritime/land systems and sensors; navigation, targeting, and survivability solutions; and networked information solutions. Its Space Systems segment offers satellites and payloads; ground systems; missile defense systems and interceptors; launch vehicles and related propulsion systems; and strategic missiles. The company was founded in 1939 and is based in Falls Church, Virginia.

How the Company Makes Money

Northrop Grumman generates revenue primarily through government contracts, which make up a significant portion of its earnings. The company is a major contractor for the U.S. Department of Defense, providing high-tech systems and services that are essential for military operations. Key revenue streams include the development and production of military aircraft, unmanned systems, missile systems, and cybersecurity solutions. Additionally, Northrop Grumman engages in various partnerships and collaborations with other defense contractors and technology firms, which further enhance its capabilities and market reach. The company's revenue is bolstered by long-term contracts and sustainment services, which provide reliable income over extended periods. Furthermore, Northrop Grumman's involvement in space exploration, including contracts with NASA and other commercial partnerships, contributes to its financial performance as the demand for space-based technologies and services continues to grow.

Northrop Grumman Financial Statement Overview

Summary

Northrop Grumman demonstrates strong profitability with healthy margins and a solid balance sheet typical for the Aerospace & Defense industry. However, the recent decline in revenue growth and free cash flow generation raises concerns, necessitating a focus on cash flow management and revenue growth for sustained financial health.

Income Statement

The TTM (Trailing-Twelve-Months) gross profit margin is approximately 19.33%, indicating a solid level of efficiency in managing production costs relative to revenue. The net profit margin stands at 9.74%, reflecting healthy profitability, although it has slightly decreased from the previous year. Revenue growth is slightly negative at -1.29% compared to the previous year, suggesting a minor contraction. The EBIT margin is 9.82%, while the EBITDA margin is 16.86%, both demonstrating stable operational profitability.

Balance Sheet

The debt-to-equity ratio is 1.13, showing a moderate level of leverage, which is typical for the industry but suggests potential exposure to interest rate increases. The return on equity (ROE) is robust at 25.50%, highlighting strong profitability for shareholders. The equity ratio is 31.28%, indicating a balanced capital structure and a solid asset management strategy.

Cash Flow

The free cash flow has declined by 50.10% compared to the previous year, pointing to challenges in cash generation. The operating cash flow to net income ratio is 0.75, which is lower than desired, suggesting that earnings are not fully translating to cash flow. The free cash flow to net income ratio is 0.33, indicating limited cash flow relative to reported profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	40.93B	41.03B	39.29B	36.60B	35.67B	36.80B
Gross Profit	7.95B	8.36B	6.55B	7.47B	7.27B	7.48B
EBITDA	7.01B	6.84B	4.23B	7.68B	8.73B	5.59B
Net Income	4.02B	4.17B	2.06B	4.90B	7.00B	3.19B
Balance Sheet
Total Assets	49.30B	49.36B	46.54B	43.76B	42.58B	44.47B
Cash, Cash Equivalents and Short-Term Investments	1.96B	4.35B	3.11B	2.58B	3.53B	4.91B
Total Debt	3.63B	18.40B	16.05B	15.00B	14.66B	16.61B
Total Liabilities	33.31B	34.07B	31.75B	28.44B	29.65B	33.89B
Stockholders Equity	15.99B	15.29B	14.79B	15.31B	12.93B	10.58B
Cash Flow
Free Cash Flow	1.83B	2.62B	2.10B	1.47B	2.15B	2.88B
Operating Cash Flow	3.44B	4.39B	3.88B	2.90B	3.57B	4.30B
Investing Cash Flow	-1.29B	-1.75B	-1.58B	-1.24B	2.06B	-1.21B
Financing Cash Flow	-3.52B	-1.40B	-1.76B	-2.61B	-7.00B	-432.00M

Northrop Grumman Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 583.45
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOC, the sentiment is Neutral. The current price of 583.45 is below the 20-day moving average (MA) of 606.60, below the 50-day MA of 593.98, and above the 200-day MA of 522.97, indicating a neutral trend. The MACD of -2.98 indicates Positive momentum. The RSI at 41.06 is Neutral, neither overbought nor oversold. The STOCH value of 28.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NOC.

Northrop Grumman Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	―	$93.10B	22.26	17.78%	1.72%	11.86%	17.39%
NOC	―	$83.27B	20.94	26.15%	1.50%	-0.14%	72.35%
RTX	―	$239.33B	36.65	10.49%	1.47%	8.79%	39.63%
LHX	―	$54.08B	32.28	9.13%	1.65%	2.93%	43.29%
LMT	―	$113.82B	27.46	62.78%	2.68%	2.88%	-35.15%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BA	―	$152.79B	-14.69	―	―	10.19%	-6.03%

Northrop Grumman Corporate Events

Northrop Grumman Reports Strong Q3 2025 Results

Northrop Grumman Corporation is a leading global aerospace and defense technology company that provides innovative solutions to equip customers with capabilities for global security and exploration.

Northrop Grumman’s Earnings Call Highlights Growth and Challenges

Northrop Grumman Corp.’s recent earnings call painted a generally positive picture, with strong performance in international sales, cash flow, and significant program milestones. However, there were some concerns regarding revised revenue guidance and challenges within the space segment. Additionally, the potential impact of the U.S. Government shutdown remains a point of concern for the company.

Northrop Grumman Secures $3 Billion Credit Facility

On September 2, 2025, Northrop Grumman Corporation entered into a new credit agreement to secure a five-year senior unsecured revolving credit facility worth $3 billion, replacing a previous $2.5 billion facility from August 2022. This facility is intended to support the company’s commercial paper program and general corporate purposes, with terms including covenants on asset sales and debt ratios, highlighting the company’s strategic financial management and stability in maintaining operational flexibility.

The most recent analyst rating on (NOC) stock is a Buy with a $650.00 price target. To see the full list of analyst forecasts on Northrop Grumman stock, see the NOC Stock Forecast page.