Northrop Grumman Corp

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NOC : NYSE : Industrial Goods
$256.02 -1.4 | -0.54%
Today's Range: 255.66 - 259.91
Avg. Daily Volume: 785200.0
06/26/17 - 3:59 PM ET

Financial Analysis


NORTHROP GRUMMAN CORP's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. NORTHROP GRUMMAN CORP has average liquidity. Currently, the Quick Ratio is 1.06 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.12% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)6267.05956.0
EBITDA ($mil)936.0842.0
EBIT ($mil)832.0739.0
Net Income ($mil)640.0556.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)1403.01277.0
Total Assets ($mil)25413.023933.0
Total Debt ($mil)7060.06389.0
Equity ($mil)5558.05621.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin25.7425.15
EBITDA Margin14.9314.13
Operating Margin13.2812.41
Sales Turnover0.980.98
Return on Assets8.988.61
Return on Equity41.0936.68
Debt Q1 FY17 Q1 FY16
Current Ratio1.271.15
Debt/Capital0.560.53
Interest Expense75.076.0
Interest Coverage11.099.72


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)174.68180.83
Div / share0.90.8
EPS3.633.03
Book value / share31.8231.08
Institutional Own % n/a n/a
Avg Daily Volume782210.0961646.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 22.73 for the Aerospace & Defense industry and a discount compared to the S&P 500 average of 25.75. To use another comparison, its price-to-book ratio of 8.07 indicates a significant premium versus the S&P 500 average of 3.09 and a significant discount versus the industry average of 266.67. The current price-to-sales ratio is below the S&P 500 average, but above the industry average. Upon assessment of these and other key valuation criteria, NORTHROP GRUMMAN CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
NOC 20.09 Peers 22.73   NOC 18.50 Peers 17.02

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

NOC is trading at a discount to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

NOC is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
NOC 19.10 Peers 21.57   NOC 15.34 Peers 9.46

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

NOC is trading at a valuation on par with its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

NOC trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
NOC 8.07 Peers 266.67   NOC 16.16 Peers 23.52

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

NOC is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, NOC is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
NOC 1.81 Peers 1.75   NOC 5.50 Peers 5.30

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

NOC is trading at a valuation on par with its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

NOC is keeping pace with its peers on the basis of sales growth.

 

 

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