# Northrop Grumman (NOC.US)

Canonical: https://gigainvestors.com/s/NOC

Analysis as of: 2026-10-16T07:30:37.368Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $499.63 per share; close as of 2026-10-15.

Estimated value: low $386.95 per share, central $494.06 per share, high $575.71 per share. Buy at or below the central value $494.06 per share. Valuation as of 2026-10-16T07:30:37.368Z; scenarios are not confidence intervals.

Expected annual return: 9.9% at the stated quote. About 9.9% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.21×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.13×

- FY2018: 0.13×

- FY2019: 0.12×

- FY2020: 0.11×

- FY2021: 0.16×

- FY2022: 0.10×

- FY2023: 0.06×

- FY2024: 0.11×

- FY2025: 0.10×

- LTM to Jun 2026: 0.10×

### moat: pass

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC, median of available years: 26.3%

- ROIC, second-lowest year: 18.4%

- Typical minus recent gross margin: 0.3 pp

- Typical gross margin (annual median): 20.4%

- Recent gross margin (lower of latest and 3-year median): 20.1%

- Years with nonpositive capital: 1

- Capital spending / revenue: 3.9%

- ROIC including acquisitions, ten-year median: 13.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 9.5%

- FY2018: 93.3%

- FY2019: >100%

- FY2020: 56.9%

- FY2021: 54.5%

- FY2022: 25.1%

- FY2023: 18.4%

- FY2024: 26.7%

- FY2025: 24.2%

- LTM to Jun 2026: 25.9%

### economics: pass

- Owner earnings / net income, 5-yr: 0.99×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $22B

- Net income, five-year total: $22B

- Return on incremental invested capital: 18.7%

- Working capital / revenue, annual change: 0.6 pp

- Working capital / revenue, change between three-year averages: 4.3 pp

- Working capital / revenue, final three-year average: 17.3%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.97×

- FY2022: 1.00×

- FY2023: 1.00×

- FY2024: 1.00×

- FY2025: 1.01×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 17.5% vs 24.2%

- Per-share earnings: 11.47 to 28.34 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -2.8%

- Ordinary dilution, 5-year annual growth: -3.0%

- Market cap gain: $40B

- Cumulative retained earnings: $6.0B

- Diluted shares, 10-year annual growth: -2.8%

- Diluted shares, 5-year annual growth: -3.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 12.0%

- Per-share value change: $16.86

- Per-share value, starting three-year median: $11.47

- Per-share value, ending three-year median: $28.34

- Buybacks concentrated in cheaper years (correlation): 0.47

- Average buyback yield: 2.6%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $7.5B

- Cumulative net income, 10 years: $35B

- ROIC, first three-year median: 17.5%

- ROIC, last three-year median: 24.2%

Chart: Earnings per share; fiscal year observations.

- FY2016: $12.19

- FY2017: $11.47

- FY2018: $18.49

- FY2019: $13.22

- FY2020: $19.03

- FY2021: $43.54

- FY2022: $31.47

- FY2023: $13.53

- FY2024: $28.34

- FY2025: $29.08

### accounting: pass

- Sloan accruals: -1.1%

- Receivables to sales index (DSRI): 1.12×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 2.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.14×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.06×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.4%

- FY2017: -1.7%

- FY2018: -1.6%

- FY2019: -5.0%

- FY2020: -2.5%

- FY2021: 8.1%

- FY2022: 4.6%

- FY2023: -3.9%

- FY2024: -0.4%

- FY2025: -1.1%

## Holders

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Donald Yacktman](https://gigainvestors.com/YAM): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 31% since Feb 2026 · "Northrop Grumman Growth Limited by Defense Spending, Margin Risks, RBC Says" (finance.yahoo.com, Oct 2026) · sales +2.2%

Story as of 2026-10-16T09:59:15.704Z; price observation 2026-10-15.

Price needs cash profits to grow 4% a year for ten years

- 2025-04-22: Northrop Grumman Trims 2025 Outlook Following Slower Sales, Higher Bomber-Program Costs ([finance.yahoo.com](https://finance.yahoo.com/m/6132abfa-61b8-3597-bc66-f0d1e7129f3d/northrop-grumman-trims-2025.html))

- 2025-07-22: Northrop Grumman lifts 2025 profit forecast on strong demand for weapons ([investing.com](https://www.investing.com/news/stock-market-news/northrop-grumman-raises-2025-profit-forecast-on-strong-demand-for-weapons-4145481))

- 2025-10-21: Northrop Grumman Lowers Full-Year Sales View ([finance.yahoo.com](https://finance.yahoo.com/m/83813d07-29b8-3280-9b4e-6f403a0070f9/northrop-grumman-lowers.html))

- 2026-01-28: NOC Q4 Deep Dive: Strong Backlog Growth and Capacity Investments Shape 2026 Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/noc-q4-deep-dive-strong-053247552.html))

- 2026-04-21: Northrop Grumman's shares slip as outlook matches estimates ([seekingalpha.com](https://seekingalpha.com/news/4577093-northrop-grummans-shares-slip-as-outlook-matches-estimates?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-07-21: Northrop Grumman Lifts Outlook as Second-Quarter Orders Boost Backlog to Record High ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/northrop-grumman-lifts-outlook-second-164823307.html))

### Sales · FY2025–2026

sales +2.2%; source https://www.sec.gov/Archives/edgar/data/1133421/000113342126000003/noc-20251231.htm; observed 2026-01-27.

- FY2017: $26B 

- FY2018: $30B 

- FY2019: $34B 

- FY2020: $37B 

- FY2021: $36B 

- FY2022: $37B 

- FY2023: $39B 

- FY2024: $41B 

- FY2025: $42B 

- FY2026: $43B 

### Gross margin · FY2026

gross margin 20.1%; source https://www.sec.gov/Archives/edgar/data/1133421/000113342126000003/noc-20251231.htm; observed 2026-01-27.

- FY2017: 23.1% 

- FY2018: 22.6% 

- FY2019: 21.5% 

- FY2020: 20.3% 

- FY2021: 20.4% 

- FY2022: 20.4% 

- FY2024: 20.4% 

- FY2025: 19.8% 

- FY2026: 20.1% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in aerospace & defense; annual sales are USD 42 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1133421/000113342126000003/noc-20251231.htm (filed 2026-01-27); FY2025: revenue 41954000000; grossProfit 8313000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NOC.US: Northrop Grumman Corporation operates as an aerospace and defense technology company in the United States, Asia/Pacific, Europe, and internationally. It operates through four segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. The Aeronautics Systems segment designs, develops, produces, integrates, sustains, and modernizes aircraft systems. This segment also offers unmanned autonomous aircraft systems, including high-altitude long-endurance strategic, surveillance and reconnaissance 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, integrates, and produces strategic deterrent systems, tactical weapons, and missile defense solutions; and provides sustainment, modernization, and training services for manned and unmanned aircraft and electronics systems. This segment also offers strategic missiles; integrated all-domain command and control systems; precision strike weapons; tactical solid rocket motors, and high-speed air-breathing and hypersonic systems; high-performance gun systems, ammunition, precision munitions, and advanced fuzes; and sustainment, operation, and modernization. The Mission Systems segment provides command, control, communication and computer, intelligence, surveillance, and reconnaissance systems; radar, electro-optical/infrared, and acoustic sensors; electronic warfare systems; advanced communications and network systems; microelectronics; navigation and positioning sensors; maritime power, propulsion, and payload launch systems; cyber solutions; and intelligence processing systems. Its Space Systems segment offers satellites, spacecraft systems, subsystems, sensors, and payloads; ground systems; missile defense systems and interceptors; and launch vehicles and related propulsion systems. The company was founded in 1939 and is based in Falls Church, Virginia.

### Why customers stay

Margins ranged from 19.8% to 100% during 2023–25; it earns 26.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2023: grossProfit / revenue = 100%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2024: grossProfit / revenue = 20.4%.

- Source: https://www.sec.gov/Archives/edgar/data/1133421/000113342126000003/noc-20251231.htm (filed 2026-01-27); FY2025: grossProfit / revenue = 19.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); 10-year return on capital observations [[2017,0.09515201432795752],[2018,0.9332733866583476],[2019,1.4001168763263927],[2020,0.5694850997892735],[2021,0.5448907076174804],[2022,0.2508502631392184],[2023,0.18361463368717382],[2024,0.26701221777952816],[2025,0.2423162993578922],[2026,0.2586813750912429]]; median 0.26284679643538555. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 1.6 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2016: growth capex 123661063.77994573; upkeep 796338936.2200543; owner earnings 1859661063.7799459. Growth capex / owner earnings = 0.06649656014660668.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2017: growth capex 175834516.86720777; upkeep 752165483.1327922; owner earnings 1737834516.8672078. Growth capex / owner earnings = 0.10118024193936742.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2018: growth capex 449000000; upkeep 800000000; owner earnings 3229000000. Growth capex / owner earnings = 0.13905233818519666.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2019: growth capex 0; upkeep 1264000000; owner earnings 2249000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2020: growth capex 153000000; upkeep 1267000000; owner earnings 3189000000. Growth capex / owner earnings = 0.04797742238946378.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2021: growth capex 0; upkeep 1415000000; owner earnings 6829000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2022: growth capex 93000000; upkeep 1342000000; owner earnings 4896000000. Growth capex / owner earnings = 0.018995098039215685.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2023: growth capex 437000000; upkeep 1338000000; owner earnings 2056000000. Growth capex / owner earnings = 0.21254863813229571.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); FY2024: growth capex 397000000; upkeep 1370000000; owner earnings 4174000000. Growth capex / owner earnings = 0.0951126018207954.

- Source: https://www.sec.gov/Archives/edgar/data/1133421/000113342126000003/noc-20251231.htm (filed 2026-01-27); FY2025: growth capex 0; upkeep 1450000000; owner earnings 4204000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); Dividend observations: [[2016,640000000],[2017,689000000],[2018,821000000],[2019,880000000],[2020,953000000],[2021,983000000],[2022,1052000000],[2023,1116000000],[2024,1186000000],[2025,1293000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1133421/000113342126000003/noc-20251231.htm (filed 2026-01-27); FY2025: cash repurchases 1624000000 USD.

### Are managers owners

Insiders own 0.3% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NOC.US SharesStats.PercentInsiders = 0.266 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 4% yearly over ten years; actual growth was 10.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-01-27); Ten-year compound average after fade. Initial solved rate 0.0443011231775091. Price 499.63; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 10.365344467640918 → FY2025 29.235048678720446. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $229.00 per share

- 2016-11: $249.65 per share

- 2016-12: $232.58 per share

- 2017-01: $229.08 per share

- 2017-02: $247.09 per share

- 2017-03: $237.84 per share

- 2017-04: $245.96 per share

- 2017-05: $259.22 per share

- 2017-06: $256.71 per share

- 2017-07: $263.13 per share

- 2017-08: $272.21 per share

- 2017-09: $287.72 per share

- 2017-10: $295.53 per share

- 2017-11: $307.40 per share

- 2017-12: $306.91 per share

- 2018-01: $340.53 per share

- 2018-02: $350.04 per share

- 2018-03: $349.12 per share

- 2018-04: $322.04 per share

- 2018-05: $327.25 per share

- 2018-06: $307.70 per share

- 2018-07: $300.49 per share

- 2018-08: $298.49 per share

- 2018-09: $317.37 per share

- 2018-10: $261.95 per share

- 2018-11: $259.88 per share

- 2018-12: $244.90 per share

- 2019-01: $275.55 per share

- 2019-02: $289.96 per share

- 2019-03: $269.60 per share

- 2019-04: $289.91 per share

- 2019-05: $303.25 per share

- 2019-06: $323.11 per share

- 2019-07: $345.57 per share

- 2019-08: $367.87 per share

- 2019-09: $374.79 per share

- 2019-10: $352.48 per share

- 2019-11: $351.77 per share

- 2019-12: $343.97 per share

- 2020-01: $374.57 per share

- 2020-02: $328.84 per share

- 2020-03: $302.55 per share

- 2020-04: $330.67 per share

- 2020-05: $335.20 per share

- 2020-06: $307.44 per share

- 2020-07: $325.01 per share

- 2020-08: $342.61 per share

- 2020-09: $315.49 per share

- 2020-10: $289.82 per share

- 2020-11: $302.26 per share

- 2020-12: $304.72 per share

- 2021-01: $286.61 per share

- 2021-02: $291.66 per share

- 2021-03: $323.64 per share

- 2021-04: $354.44 per share

- 2021-05: $365.87 per share

- 2021-06: $363.43 per share

- 2021-07: $363.02 per share

- 2021-08: $367.70 per share

- 2021-09: $360.15 per share

- 2021-10: $357.22 per share

- 2021-11: $348.80 per share

- 2021-12: $387.07 per share

- 2022-01: $369.90 per share

- 2022-02: $442.14 per share

- 2022-03: $447.22 per share

- 2022-04: $439.40 per share

- 2022-05: $467.97 per share

- 2022-06: $478.57 per share

- 2022-07: $478.90 per share

- 2022-08: $477.99 per share

- 2022-09: $470.32 per share

- 2022-10: $549.01 per share

- 2022-11: $533.29 per share

- 2022-12: $545.61 per share

- 2023-01: $448.04 per share

- 2023-02: $464.11 per share

- 2023-03: $461.72 per share

- 2023-04: $461.27 per share

- 2023-05: $435.49 per share

- 2023-06: $455.80 per share

- 2023-07: $445.00 per share

- 2023-08: $433.09 per share

- 2023-09: $440.19 per share

- 2023-10: $471.43 per share

- 2023-11: $475.16 per share

- 2023-12: $468.14 per share

- 2024-01: $446.76 per share

- 2024-02: $461.02 per share

- 2024-03: $478.66 per share

- 2024-04: $485.03 per share

- 2024-05: $450.77 per share

- 2024-06: $435.95 per share

- 2024-07: $484.32 per share

- 2024-08: $523.21 per share

- 2024-09: $528.07 per share

- 2024-10: $509.02 per share

- 2024-11: $489.65 per share

- 2024-12: $469.29 per share

- 2025-01: $487.27 per share

- 2025-02: $461.74 per share

- 2025-03: $512.01 per share

- 2025-04: $486.50 per share

- 2025-05: $484.77 per share

- 2025-06: $499.98 per share

- 2025-07: $576.61 per share

- 2025-08: $590.04 per share

- 2025-09: $609.32 per share

- 2025-10: $583.45 per share

- 2025-11: $572.25 per share

- 2025-12: $570.21 per share

- 2026-01: $692.26 per share

- 2026-02: $724.38 per share

- 2026-03: $682.24 per share

- 2026-04: $579.48 per share

- 2026-05: $563.68 per share

- 2026-06: $509.31 per share

- 2026-07: $542.48 per share

- 2026-08: $539.70 per share

- 2026-09: $483.48 per share

- 2026-10: $481.38 per share

## Annual estimated value (USD per share)

- FY2016: low $136.64 per share, central $153.92 per share, high $176.91 per share

- FY2017: low $195.99 per share, central $218.37 per share, high $244.00 per share

- FY2018: low $175.45 per share, central $218.69 per share, high $254.35 per share

- FY2019: low $193.55 per share, central $244.66 per share, high $284.31 per share

- FY2020: low $231.80 per share, central $294.07 per share, high $339.69 per share

- FY2021: low $296.45 per share, central $424.42 per share, high $495.79 per share

- FY2022: low $378.34 per share, central $546.47 per share, high $640.25 per share

- FY2023: low $262.31 per share, central $299.02 per share, high $344.96 per share

- FY2024: low $374.84 per share, central $479.00 per share, high $556.03 per share

- FY2025: low $388.84 per share, central $492.35 per share, high $571.24 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:36:21.127Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1133421/000113342126000003/noc-20251231.htm); period 2025-12-31, filed 2026-01-27.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.