Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.
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Highlights from the ratings report include:
- LOCKHEED MARTIN CORP has improved earnings per share by 15.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, LOCKHEED MARTIN CORP increased its bottom line by earning $8.34 versus $7.86 in the prior year. This year, the market expects an improvement in earnings ($8.95 versus $8.34).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Aerospace & Defense industry and the overall market, LOCKHEED MARTIN CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The gross profit margin for LOCKHEED MARTIN CORP is currently extremely low, coming in at 11.80%. Regardless of LMT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.87% trails the industry average.
- The debt-to-equity ratio is very high at 20.74 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, LMT maintains a poor quick ratio of 0.79, which illustrates the inability to avoid short-term cash problems.
Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products for defense, civil, and commercial applications in the United States and internationally. Lockheed Martin has a market cap of $31.6 billion and is part of the industrial goods sector and aerospace/defense industry. The company has a P/E ratio of 11.00, below the S&P 500 P/E ratio of 18.00. Shares are up 7.2% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.
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