Search, Detection, Navigation, Guidance, Aeronautical Sys
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 in the United States and internationally. 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.
Discounted Cash Flow Valuation of Northrop Grumman Corp
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $2.135B | $2.117B | $2.099B | $2.081B | $2.063B | $2.045B | $2.027B | $2.01B | $1.993B | $1.976B | $1.959B | $19.59B |
DCF | $1.841B | $1.587B | $1.368B | $1.179B | $1.017B | $876.5M | $755.7M | $651.5M | $561.6M | $484.2M | $4.842B | |
Value | $15.16B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 8.5% | 8.9% | 7.7% | 11% | 6.6% | 8.7% | 20% | 13% | 5.2% | 5.4% |
ROA | 13% | 12% | 9.4% | 10% | 9.7% | 9.1% | 21% | 13% | 5.5% | 5.6% |
ROE | 36% | 42% | 29% | 39% | 25% | 30% | 54% | 32% | 14% | 15% |
The average Net Margin over the past 5 years is +10.71%.
The trend of Net Margin over the past 5 years is +0.11%.
The average ROA over the past 5 years is +11.44%.
The trend of ROA over the past 5 years is 0%.
The average ROE over the past 5 years is +32.52%.
The trend of ROE over the past 5 years is -2.41%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
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Debt FCF | 3.92 | 3.76 | 9.62 | 5.82 | 4.96 | 5.49 | 5.98 | 9.56 | 6.67 | 7.65 |
Debt Equity | 1.20 | 1.35 | 2.30 | 1.83 | 1.71 | 1.50 | 1.00 | 0.92 | 0.95 | 1.15 |
MIN | ||||||||||
Graham Stability | - | - | 97% | 100% | 91% | 100% | 100% | 100% | 41% | 41% |
The Debt/FCF trailing twelve month is 7.65.
The trend of Debt/FCF over the past 5 years is 0.53.
Graham’s Stability measure stands at 0.41.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
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Revenue | 6.9% | 5.5% | 2.2% | 7.3% | 0.1% |
Net Income | -0.96% | -8.6% | -14% | -58% | -1.7% |
Stockholders Equity | 16% | 13% | 12% | -3.4% | 2.2% |
FCF | 1.5% | -4% | -10% | 43% | 0.37% |
The Revenue CAGR over the past 5 years is +5.48%.
The trend of Revenue growth rate over the past 5 years is +0.1%.
The Earnings CAGR over the past 5 years is -8.63%.
The trend of Earnings growth rate over the past 5 years is -1.68%.
The Equity CAGR over the past 5 years is +12.56%.
The trend of Equity growth rate over the past 5 years is +2.18%.
The FCF CAGR over the past 5 years is -4.02%.
The trend of FCF growth rate over the past 5 years is +0.37%.