Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 9.27%, lower than industry average of 9.74%.

Growth Trajectory

Profitability

In the growth phase company makes 13.63% profit on every dollar of sales, higher than industry average of 7.97%.

Profitability Trajectory

Risk Profile

Investors expect at least 8.36% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
74.19B USD
Equity Value
59.13B USD
FCF Yield
65.09%
Average ROIC
16.27%
Cost of Capital
8.53%
P/E Ratio
17.61x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues40.50B USD41.03B USD
Operating Income or EBIT5.63B USD5.64B USD
Interest Expense650M USD621M USD
Book Value Of Equity15.47B USD15.29B USD
Book Value Of Debt16.96B USD16.49B USD
Cash and Marketable Securities1.90B USD4.35B USD
Number of Shares Outstanding143.28M--
Minority interests0 USD0 USD
Current Stock Price573.99 USD--
Effective Tax Rate17.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
-11.03%
-1.30%Company
vs
9.73%Industry
Below Industry
Operating Margin
+5.91%
13.88%Company
vs
7.97%Industry
Above Industry
Northrop Grumman Corporation demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.83%
Reinvestment Rate
52.09%
Terminal value represents 59% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 43.79B USD Add
Present Value (Cash Flow Over Next 10 Years) 30.39B USD Add
Value of Operating Assets 74.19B USD Sub-total
Debt 16.96B USD Subtract
Minority Interests — Subtract
Cash 1.89B USD Add
Value of Equity 59.13B USD Sub-total
Number of Shares 143.28M shares Divisor
Estimated Value per Share (Fair Value) 412.71 USD Total
Current Market Price 573.99 USD Reference

Financial Projections

Total FCF Present Value
30.39B USD
Avg Revenue Growth
6.58%
Avg Operating Margin
13.56%
Avg ROIC
16.27%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue42.52B USD46.46B USD50.76B USD55.47B USD60.61B USD65.66B USD70.52B USD75.08B USD79.24B USD82.88B USD86.70B USD
Growth Rate 4.99% 9.26% 9.26% 9.26% 9.26% 8.33% 7.40% 6.46% 5.53% 4.59% 4.59%
PROFITABILITY
Operating Income5.90B USD6.37B USD6.91B USD7.51B USD8.15B USD8.83B USD9.48B USD10.10B USD10.65B USD11.15B USD11.66B USD
Operating Margin 13.88% 13.71% 13.62% 13.53% 13.45% 13.45% 13.45% 13.45% 13.45% 13.45% 13.45%
EBIT (1-tax)4.90B USD5.28B USD5.74B USD6.23B USD6.76B USD7.19B USD7.57B USD7.89B USD8.16B USD8.36B USD8.74B USD
CASH FLOW
Reinvestment1.83B USD2.00B USD2.18B USD2.38B USD2.34B USD1.85B USD1.74B USD1.58B USD1.39B USD1.45B USD4.55B USD
Free Cash Flow3.07B USD3.28B USD3.55B USD3.84B USD4.42B USD5.33B USD5.83B USD6.31B USD6.77B USD6.90B USD4.19B USD
Terminal Value--------------------99.06B USD
Present Value2.83B USD2.80B USD2.79B USD2.78B USD2.95B USD3.29B USD3.31B USD3.30B USD3.25B USD3.05B USD—
EFFICIENCY
ROIC 16.05% 16.33% 16.70% 17.05% 17.37% 17.41% 17.54% 17.59% 17.57% 17.47% 8.83%
Cost of Capital 8.36% 8.36% 8.36% 8.36% 8.36% 8.45% 8.55% 8.64% 8.73% 8.83% 8.83%
Sales/Capital 2.15x 2.15x 2.15x 2.15x 2.15x 2.62x 2.62x 2.62x 2.62x 2.62x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)