Lockheed Martin Corp (LMT) stock analysis

P/E above its 5-year median

Lockheed Martin's P/E of 21.7 is above its own 5-year median of 20.4.

P/E above the industry

Lockheed Martin's P/E of 21.7 is above the Transportation Equipment median of 20.3.

EV/EBITDA below its 5-year median

Lockheed Martin's EV/EBITDA of 14.1 is below its 5-year median of 15.6.

P/B above the industry

Lockheed Martin's price-to-book of 14.00 is above the Transportation Equipment median of 1.86.

Trading above fair value

The share price of $610.05 is above our fair value estimate of $553.03.

Margin of safety under 20%

The price is 10.3% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 4.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -0.3% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 55.1% over the last twelve months, against a 5-year average of -6.0% a year.

Growing slower than the industry

Revenue grew 7.9% over the last twelve months; the Transportation Equipment median is 43.8%.

Guidance raised

Lockheed Martin raised its 2026 Sales outlook on Jul 23, 2026.

Gross margin improving

Gross margin was 11.7% over the last twelve months, against 8.2% a year earlier.

Return on equity over 15%

Return on equity was 80.2% over the last twelve months and averaged 75.0% over five years.

Return on capital over 10%

Return on invested capital was 32.0%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Lockheed Martin's return on equity of 80.2% is above the Transportation Equipment median of 2.7%.

Earnings shrank over 5 years

Net income shrank 6.0% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 8.2% over the last twelve months, against a 5-year average of 8.5%.

Net margin above the industry

Lockheed Martin's net margin of 8.2% is above the Transportation Equipment median of -65.7%.

High debt

Debt is 204% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 202% five years ago to 204%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 49.3% of total debt.

Interest well covered

Operating income covers interest expense 8.6 times.

Short-term assets cover short-term debts

Current assets are 1.26 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.74; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Lockheed Martin paid dividends worth 2.3% of the share price over the last twelve months.

Yield below Treasuries

The 2.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Lockheed Martin yields 2.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 49.2% of net income.

Covered by free cash flow

Dividends take 38.3% of free cash flow.