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Relative valuation derived from Technology sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
22.7%
Sector: -1.4%
Dividend Analysis audit
GROWTH
1.44%
Trailing Yield
$1.44
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
37%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, NORTHROP GRUMMAN CORP /DE/ (NOC) receives a "Hold" rating with a composite score of 53.8/100, ranked #759 out of 4446 stocks. Key factor scores: Quality 50/100, Value 57/100, Momentum 63/100. This is quantitative analysis only — not investment advice.
NORTHROP GRUMMAN CORP /DE/ (NOC) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does NORTHROP GRUMMAN CORP /DE/ Do?
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. NORTHROP GRUMMAN CORP /DE/ (NOC) is classified as a large-cap stock in the Technology sector, specifically within the Electronic Equipment industry. The company is led by CEO Kathy J. Warden and employs approximately 95,000 people, headquartered in Wilmington, Virginia. With a market capitalization of $98.9B, NOC is one of the prominent companies in the Technology sector.
As of April 2026, NORTHROP GRUMMAN CORP /DE/ receives a Hold rating with a composite score of 53.8/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.NOC ranks #759 out of 4,446 stocks in our coverage universe. Within the Technology sector, NORTHROP GRUMMAN CORP /DE/ ranks #71 of 584 stocks, placing it in the top quartile of its Technology peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
NOC Stock Price and 52-Week Range
NORTHROP GRUMMAN CORP /DE/ (NOC) currently trades at $673.73. The stock lost $16.84 (2.4%) in the most recent trading session. The 52-week high for NOC is $774.00, which means the stock is currently trading -13.0% from its annual peak. The 52-week low is $450.13, putting the stock 49.7% above its annual trough. Recent trading volume was 500K shares, suggesting relatively thin trading activity.
Is NOC Overvalued or Undervalued? — Valuation Analysis
NORTHROP GRUMMAN CORP /DE/ (NOC) carries a value factor score of 57/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 25.94x, compared to the Technology sector average of 45.27x — a discount of 43%. The price-to-book ratio stands at 5.88x, versus the sector average of 3.16x. The price-to-sales ratio is 2.44x, compared to 1.06x for the average Technology stock. On an enterprise value basis, NOC trades at 26.09x EV/EBITDA, versus 12.79x for the sector.
Overall, NOC's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
NORTHROP GRUMMAN CORP /DE/ (NOC) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 22.7%, compared to the Technology sector average of -1.4%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 7.4% versus the sector average of -1.0%.
On a margin basis, NORTHROP GRUMMAN CORP /DE/ reports gross margins of 20.0%, compared to 50.9% for the sector. The operating margin is 10.7% (sector: -0.5%). Net profit margin stands at 9.3%, versus -1.5% for the average Technology stock. Revenue growth is running at 2.0% on a trailing basis, compared to 14.2% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
NOC Debt, Balance Sheet, and Financial Health
NORTHROP GRUMMAN CORP /DE/ has a debt-to-equity ratio of 94.0%, compared to the Technology sector average of 43.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 1.10x, suggesting adequate working capital coverage. Total debt on the balance sheet is $15.70B. Cash and equivalents stand at $4.40B.
NOC has a beta of 0.11, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for NORTHROP GRUMMAN CORP /DE/ is 86/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
NORTHROP GRUMMAN CORP /DE/ Revenue and Earnings History — Quarterly Trend
In TTM 2026, NORTHROP GRUMMAN CORP /DE/ reported revenue of $40.24B and earnings per share (EPS) of $29.14. Net income for the quarter was $3.78B. Gross margin was 20.0%. Operating income came in at $4.36B.
In FY 2025, NORTHROP GRUMMAN CORP /DE/ reported revenue of $41.95B and earnings per share (EPS) of $29.14. Net income for the quarter was $4.18B. Revenue grew 2.2% year-over-year compared to FY 2024. Operating income came in at $4.51B.
In Q3 2025, NORTHROP GRUMMAN CORP /DE/ reported revenue of $10.42B and earnings per share (EPS) of $7.69. Net income for the quarter was $1.10B. Revenue grew 4.3% year-over-year compared to Q3 2024. Operating income came in at $1.24B.
In Q2 2025, NORTHROP GRUMMAN CORP /DE/ reported revenue of $10.35B and earnings per share (EPS) of $8.17. Net income for the quarter was $1.17B. Revenue grew 1.3% year-over-year compared to Q2 2024. Operating income came in at $1.43B.
Over the past 8 quarters, NORTHROP GRUMMAN CORP /DE/ has demonstrated a growth trajectory, with revenue expanding from $10.22B to $40.24B. Investors analyzing NOC stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
NOC Dividend Yield and Income Analysis
NORTHROP GRUMMAN CORP /DE/ (NOC) currently pays a dividend yield of 1.4%. At this yield, a $10,000 investment in NOC stock would generate approximately $$144.00 in annual dividend income. The net margin of 9.3% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
NOC Momentum and Technical Analysis Profile
NORTHROP GRUMMAN CORP /DE/ (NOC) has a momentum factor score of 63/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 33/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 27/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
NOC vs Competitors — Technology Sector Ranking and Peer Comparison
Within the Technology sector, NORTHROP GRUMMAN CORP /DE/ (NOC) ranks #71 out of 584 stocks based on the Blank Capital composite score. This places NOC in the top quartile of all Technology stocks in our coverage universe. Key competitors and sector peers include IHS Holding Ltd (IHS) with a score of 55.0/100, VERISIGN INC/CA (VRSN) with a score of 56.0/100, ESCO TECHNOLOGIES INC (ESE) with a score of 51.7/100, CareCloud, Inc. (CCLD) with a score of 46.9/100, and MMTec, Inc. (MTC) with a score of 47.4/100.
Comparing NOC against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full NOC vs S&P 500 (SPY) comparison to assess how NORTHROP GRUMMAN CORP /DE/ stacks up against the broader market across all factor dimensions.
NOC Next Earnings Date
No upcoming earnings date has been announced for NORTHROP GRUMMAN CORP /DE/ (NOC) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy NOC? — Investment Thesis Summary
NORTHROP GRUMMAN CORP /DE/ presents a balanced picture with arguments on both sides. Price momentum is positive at 63/100, suggesting the trend favors buyers. Low volatility (stability score 86/100) reduces downside risk.
In summary, NORTHROP GRUMMAN CORP /DE/ (NOC) earns a Hold rating with a composite score of 53.8/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on NOC stock.
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Institutional Research Dossier
NORTHROP GRUMMAN CORP /DE/ (NOC) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Northrop Grumman (NOC). While the company operates in a sector with high barriers to entry and enjoys a substantial backlog, its relatively slow revenue growth compared to the broader technology sector and its high debt levels temper our enthusiasm. The current valuation appears fair, reflecting the company's stability and consistent profitability, but does not offer a compelling margin of safety given the moderate growth outlook and inherent risks associated with government contracting.
Northrop Grumman's strength lies in its established position as a key supplier to the U.S. government and its expertise in advanced technologies. However, its reliance on government contracts exposes it to budgetary pressures and political shifts. Investors should carefully weigh the company's stability and consistent profitability against its relatively modest growth prospects and the potential for increased competition and evolving geopolitical dynamics.
Business Strategy & Overview
Northrop Grumman operates as a leading aerospace and defense company, deriving the vast majority of its revenue from contracts with the U.S. government and its allies. The company's business is structured into four main segments: Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems. Each segment focuses on specific areas of defense and aerospace technology, allowing Northrop Grumman to offer a comprehensive suite of products and services to its customers.
The Aeronautics Systems segment is responsible for designing, developing, and manufacturing aircraft systems, including unmanned autonomous aircraft systems (UAS) and strategic long-range strike aircraft. This segment is a key player in the development of advanced military aircraft and drones, catering to the growing demand for unmanned aerial vehicles and advanced surveillance capabilities. The Defense Systems segment focuses on weapons and mission systems, providing integrated battle management systems, precision strike weapons, and life cycle service and support for various platforms. This segment is crucial for maintaining and upgrading existing defense infrastructure and developing new weapons technologies.
The Mission Systems segment specializes in cyber, command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) systems. This segment is at the forefront of developing advanced sensors, electronic warfare systems, and cyber solutions, addressing the increasing importance of information warfare and cybersecurity. The Space Systems segment is involved in the development of satellites, ground systems, missile defense systems, and launch vehicles. This segment is critical for maintaining U.S. dominance in space and developing advanced missile defense capabilities.
Northrop Grumman's strategic positioning is centered on being a trusted partner to the U.S. government, providing cutting-edge technologies and solutions for national security. The company's product pipeline includes a range of advanced systems, such as the B-21 Raider stealth bomber, which is expected to be a major growth driver in the coming years. The company's focus on innovation and its strong relationships with government agencies provide a competitive advantage in securing lucrative contracts. However, the company's reliance on government spending also exposes it to budgetary uncertainties and political risks.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
2.0%
Sector: 14.2%
-86% VS SCTR
Economic Moat Analysis
Northrop Grumman possesses a narrow economic moat, primarily derived from intangible assets and switching costs. The company's intangible assets stem from its proprietary technologies, specialized expertise, and strong relationships with government agencies. These assets create barriers to entry for potential competitors, as it is difficult to replicate Northrop Grumman's technological capabilities and established position in the defense industry.
Switching costs also contribute to the company's moat. Once a government agency or military branch integrates Northrop Grumman's systems into its operations, it becomes costly and time-consuming to switch to a different provider. This is due to the complexity of defense systems, the need for specialized training, and the potential for disruption to ongoing operations. The high switching costs provide Northrop Grumman with a degree of pricing power and customer retention.
However, the moat is considered narrow due to the nature of government contracting. While Northrop Grumman enjoys a strong position in certain areas, it faces competition from other large defense contractors, such as Lockheed Martin, Boeing, and Raytheon Technologies. These companies also possess significant resources and expertise, limiting Northrop Grumman's ability to consistently outperform its peers. Furthermore, government contracts are often subject to competitive bidding, which can put pressure on profit margins.
The company's moat is also vulnerable to technological disruption. The rapid pace of innovation in areas such as artificial intelligence, cybersecurity, and space technology could erode Northrop Grumman's competitive advantage if it fails to adapt and invest in these emerging fields. Additionally, changes in government priorities and defense spending could shift demand away from Northrop Grumman's core areas of expertise.
While Northrop Grumman's established position and specialized capabilities provide a degree of protection, its moat is not as wide or durable as those of companies with stronger network effects or cost advantages. The company's reliance on government contracts and the competitive nature of the defense industry limit its ability to generate consistently high returns on invested capital.
Financial Health & Profitability
Northrop Grumman's financial health presents a mixed picture. The company has demonstrated consistent revenue growth, with revenue increasing from $39.29 billion in FY2023 to $41.95 billion in FY2025. However, this growth rate of approximately 2% is significantly lower than the sector average of 14%, indicating that Northrop Grumman is underperforming its peers in terms of revenue expansion. Net income has also shown improvement, rising from $2.06 billion in FY2023 to $4.18 billion in FY2025, reflecting improved operational efficiency and profitability.
The company's profitability metrics are generally strong. The operating margin has increased from 6.5% in FY2023 to 10.8% in FY2025, indicating improved cost management and pricing power. The net margin of 9.3% is also significantly higher than the sector average of -1.5%, demonstrating Northrop Grumman's ability to generate profits from its operations. The return on equity (ROE) of 22.7% is also impressive, far exceeding the sector average of -1.5%, suggesting efficient utilization of shareholder equity.
However, Northrop Grumman's balance sheet exhibits a high level of debt. The company's total debt stands at $15.70 billion, resulting in a debt-to-equity ratio of 94.00, which is significantly higher than the sector average of 43.00. This high level of leverage increases the company's financial risk and could constrain its ability to invest in future growth opportunities. The current ratio of 1.10 indicates adequate liquidity, but the high debt burden remains a concern.
Free cash flow generation is a key area of concern. While the company generates positive free cash flow ($1.92 billion), the data provided does not offer a historical trend. Consistent and growing free cash flow is essential for debt repayment, dividend payments, and strategic investments. The lack of historical free cash flow data makes it difficult to assess the company's long-term financial sustainability.
Overall, Northrop Grumman's financial health is characterized by strong profitability and consistent revenue growth, but is tempered by a high level of debt and uncertainty regarding free cash flow trends. The company's ability to manage its debt burden and generate sustainable free cash flow will be critical for its long-term financial performance.
Valuation Assessment
Northrop Grumman's valuation appears to be fair relative to its peers and historical performance. The company's price-to-earnings (P/E) ratio of 24.3x is significantly lower than the sector average of 45.3x, suggesting that the stock is undervalued compared to its peers. However, it's important to consider that the technology sector includes high-growth software and internet companies, which typically command higher valuations than defense contractors.
The company's enterprise value-to-EBITDA (EV/EBITDA) ratio of 6.4x is also lower than the sector average of 13.0x, further indicating that the stock is relatively undervalued. This suggests that investors are not assigning a premium to Northrop Grumman's earnings potential, possibly due to its relatively slow revenue growth and high debt levels.
The lack of historical free cash flow data makes it difficult to assess the company's free cash flow yield. A higher free cash flow yield would indicate that the stock is undervalued, while a lower yield would suggest that it is overvalued. Without this information, it is challenging to determine the intrinsic value of the company based on its cash flow generation capabilities.
Considering the company's consistent profitability, stable revenue growth, and relatively low valuation multiples, the stock appears to be fairly priced. However, the high debt levels and relatively slow revenue growth compared to the broader technology sector limit the potential for significant upside. Investors should also consider the risks associated with government contracting, such as budgetary pressures and political uncertainties, which could impact the company's future earnings.
Overall, Northrop Grumman's valuation reflects its position as a stable and profitable defense contractor with moderate growth prospects. The stock is not significantly undervalued or overvalued, suggesting that the current price accurately reflects the company's intrinsic value.
Risk & Uncertainty
Northrop Grumman faces several specific risks and uncertainties that could impact its business and financial performance. One of the most significant risks is its reliance on government contracts. Changes in government spending priorities, defense budgets, or political administrations could lead to a reduction in contract awards or delays in project funding. This could negatively impact the company's revenue and profitability.
Another risk is the intense competition in the defense industry. Northrop Grumman competes with other large defense contractors, such as Lockheed Martin, Boeing, and Raytheon Technologies, for government contracts. These companies have significant resources and expertise, which could put pressure on Northrop Grumman's profit margins and market share. The company must continuously innovate and develop new technologies to maintain its competitive advantage.
The company's high debt levels also pose a significant risk. The company's total debt of $15.70 billion increases its financial risk and could constrain its ability to invest in future growth opportunities. Rising interest rates could further increase the company's debt servicing costs and reduce its profitability. The company must effectively manage its debt burden to maintain its financial stability.
Technological obsolescence is another risk factor. The rapid pace of innovation in areas such as artificial intelligence, cybersecurity, and space technology could render Northrop Grumman's existing technologies obsolete. The company must invest heavily in research and development to stay ahead of the curve and maintain its technological leadership.
Finally, geopolitical risks could also impact the company's business. Changes in international relations, conflicts, or trade policies could affect the demand for Northrop Grumman's products and services. The company must carefully monitor geopolitical developments and adapt its strategies accordingly.
Bulls Say / Bears Say
The Bull Case
BULL VIEWNorthrop Grumman's strong backlog and established relationships with the U.S. government provide a stable revenue stream and predictable earnings growth.
BULL VIEWThe company's focus on advanced technologies, such as the B-21 Raider, positions it for long-term growth in key defense and aerospace markets.
BULL VIEWNorthrop Grumman's consistent profitability and strong return on equity demonstrate its efficient operations and effective capital allocation.
The Bear Case
BEAR VIEWNorthrop Grumman's high debt levels increase its financial risk and could constrain its ability to invest in future growth opportunities.
BEAR VIEWThe company's reliance on government contracts exposes it to budgetary pressures and political uncertainties, which could negatively impact its revenue and profitability.
BEAR VIEWNorthrop Grumman's relatively slow revenue growth compared to the broader technology sector suggests that it is losing market share to its competitors.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score NOC and 4,400+ other equities.
NORTHROP GRUMMAN CORP /DE/ exhibits a 69% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
7.4%
Sector: -1.0%
Gross Margin
Pricing power and cost efficiency
20.0%
Sector: 50.9%
Operating Margin
Core business profitability
10.7%
Sector: -0.5%
Net Margin
Bottom-line profitability
9.3%
Sector: -1.5%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $144 annually in dividends at the current trailing rate.
