Northrop Grumman Corp (NOC) stock analysis

P/E above its 5-year median

Northrop Grumman's P/E of 17.4 is above its own 5-year median of 16.7.

P/E below the industry

Northrop Grumman's P/E of 17.4 is below the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 30.2.

EV/EBITDA below its 5-year median

Northrop Grumman's EV/EBITDA of 14.6 is below its 5-year median of 16.6.

P/B above the industry

Northrop Grumman's price-to-book of 4.19 is above the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 3.38.

Trading below fair value

The share price of $550.96 is below our fair value estimate of $634.06.

Margin of safety under 20%

The price is 13.1% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 4.7% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -2.6% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 12.5% over the last twelve months, against a 5-year average of 5.6% a year.

Growing slower than the industry

Revenue grew 6.5% over the last twelve months; the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median is 8.6%.

Guidance raised

Northrop Grumman raised its 2026 MTM-adjusted EPS outlook on Jul 21, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 26.1% over the last twelve months and averaged 32.4% over five years.

Return on capital over 10%

Return on invested capital was 13.3%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Northrop Grumman's return on equity of 26.1% is above the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 9.5%.

Earnings grew over 5 years

Net income grew 5.6% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 10.4% over the last twelve months, against a 5-year average of 11.7%.

Net margin above the industry

Northrop Grumman's net margin of 10.4% is above the Measuring, Analyzing, and Controlling Instruments; Photographic, Medical and Optical Goods; Watches and Clocks median of 9.4%.

High debt

Debt is 81.3% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 142% five years ago to 81.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 34.7% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.23 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.08; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Northrop Grumman paid dividends worth 1.7% of the share price over the last twelve months.

Yield below Treasuries

The 1.7% 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; Northrop Grumman yields 1.7%.

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 30.2% of net income.

Covered by free cash flow

Dividends take 35.6% of free cash flow.