📊 HII Key Takeaways
Is Huntington Ingalls Industries, Inc.. (HII) a Good Investment?
Despite 8.2% revenue growth and positive net income of $149M, HII exhibits severe operational cash flow deterioration with -$390M operating cash flow and -$464M free cash flow, indicating critical working capital management issues or earnings quality concerns. Ultra-thin net margins (4.8%) and anemic returns on equity (2.9%) and assets (1.2%) reveal structural profitability weakness that cannot sustain the negative cash generation indefinitely.
Huntington Ingalls Industries shows solid fundamental quality, with mid-single-digit revenue growth, double-digit net income and EPS growth, and healthy free cash flow generation. Financial health appears sound given moderate leverage, adequate liquidity, and acceptable interest coverage, but the business still operates with relatively thin margins that leave less room for execution errors or contract pressure. Overall, the fundamentals support a stable, high-quality industrial profile, though not one with enough profitability strength to justify a more aggressive rating.
Why Buy Huntington Ingalls Industries, Inc.. Stock? HII Key Strengths
- Revenue growth of 8.2% YoY outpacing industry base rates
- Net income growth of 10.0% YoY showing operational leverage
- Moderate debt-to-equity ratio of 0.52x with adequate interest coverage at 7.0x
- Revenue, net income, and diluted EPS are all growing, indicating improving earnings conversion on a larger sales base.
- Free cash flow generation is strong, with $794M of FCF and a 6.4% FCF margin, supporting flexibility for debt service and capital allocation.
- Balance sheet risk looks manageable, with debt/equity of 0.53x, current ratio of 1.13x, and interest coverage of 6.3x.
HII Stock Risks: Huntington Ingalls Industries, Inc.. Investment Risks
- Severely negative operating cash flow of -$390M despite positive net income raises earnings quality red flags
- Free cash flow of -$464M is unsustainable and signals working capital crisis or prepayment obligations
- Critically thin operating margin of 5.0% and net margin of 4.8% leave no buffer for market disruption
- Extremely poor returns (ROE 2.9%, ROA 1.2%) indicate value destruction for shareholders
- Low cash balance of $216M relative to negative cash flow and $2.7B debt load
- Operating and net margins remain thin at 5.3% and 4.8%, limiting resilience if project costs rise or contracts underperform.
- Liquidity is adequate but not especially strong, so working capital swings or program delays could pressure cash conversion.
- Returns on equity and assets are respectable rather than outstanding, suggesting the company is efficient but not highly profitable relative to its asset base.
Key Metrics to Watch
- Operating cash flow trend - must return to positive within next 2-3 quarters
- Net margin progression - need expansion to 6%+ to sustain operations
- Working capital changes - identify if cash burn is temporary (contract-related) or structural
- Free cash flow conversion - critical to monitor given current -15% FCF margin
- Operating margin and net margin trend
- Free cash flow conversion versus net income
Huntington Ingalls Industries, Inc.. (HII) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Huntington Ingalls Industries, Inc.. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
HII Profit Margin, ROE & Profitability Analysis
HII vs Automotive Sector: How Huntington Ingalls Industries, Inc.. Compares
How Huntington Ingalls Industries, Inc.. compares to Automotive sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Huntington Ingalls Industries, Inc.. Stock Overvalued? HII Valuation Analysis 2026
Based on fundamental analysis, Huntington Ingalls Industries, Inc.. has mixed fundamental signals relative to the Automotive sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Huntington Ingalls Industries, Inc.. Balance Sheet: HII Debt, Cash & Liquidity
HII Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Huntington Ingalls Industries, Inc..'s revenue has grown significantly by 31% over the 5-year period, indicating strong business expansion. The most recent EPS of $17.07 reflects profitable operations.
HII Revenue Growth, EPS Growth & YoY Performance
HII Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $2.7B | $149.0M | $3.79 |
| Q3 2025 | $2.7B | $101.0M | $2.56 |
| Q2 2025 | $3.0B | $152.0M | $3.86 |
| Q1 2025 | $2.7B | $149.0M | $3.79 |
| Q3 2024 | $2.7B | $101.0M | $2.56 |
| Q2 2024 | $2.8B | $130.0M | $3.27 |
| Q1 2024 | $2.7B | $129.0M | $3.23 |
| Q3 2023 | $2.6B | $138.0M | $3.44 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Huntington Ingalls Industries, Inc.. Dividends, Buybacks & Capital Allocation
HII SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Huntington Ingalls Industries, Inc.. (CIK: 0001501585)
📋 Recent SEC Filings
❓ Frequently Asked Questions about HII
What is the AI rating for HII?
Huntington Ingalls Industries, Inc.. (HII) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are HII's key strengths?
Claude: Revenue growth of 8.2% YoY outpacing industry base rates. Net income growth of 10.0% YoY showing operational leverage. ChatGPT: Revenue, net income, and diluted EPS are all growing, indicating improving earnings conversion on a larger sales base.. Free cash flow generation is strong, with $794M of FCF and a 6.4% FCF margin, supporting flexibility for debt service and capital allocation..
What are the risks of investing in HII?
Claude: Severely negative operating cash flow of -$390M despite positive net income raises earnings quality red flags. Free cash flow of -$464M is unsustainable and signals working capital crisis or prepayment obligations. ChatGPT: Operating and net margins remain thin at 5.3% and 4.8%, limiting resilience if project costs rise or contracts underperform.. Liquidity is adequate but not especially strong, so working capital swings or program delays could pressure cash conversion..
What is HII's revenue and growth?
Huntington Ingalls Industries, Inc.. reported revenue of $3.1B.
Does HII pay dividends?
Huntington Ingalls Industries, Inc.. pays dividends, with $54.0M distributed to shareholders in the trailing twelve months.
Where can I find HII SEC filings?
Official SEC filings for Huntington Ingalls Industries, Inc.. (CIK: 0001501585) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is HII's EPS?
Huntington Ingalls Industries, Inc.. has a diluted EPS of $3.79.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is HII a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Huntington Ingalls Industries, Inc.. has a SELL rating with 78% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is HII stock overvalued or undervalued?
Valuation metrics for HII: ROE of 2.9% (sector avg: 12%), net margin of 4.8% (sector avg: 6%). Compare these metrics with sector averages to assess valuation.
Should I buy HII stock in 2026?
Our dual AI analysis gives Huntington Ingalls Industries, Inc.. a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is HII's free cash flow?
Huntington Ingalls Industries, Inc..'s operating cash flow is $-390.0M, with capital expenditures of $74.0M. FCF margin is -15.0%.
How does HII compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 4.8% (avg: 6%), ROE 2.9% (avg: 12%), current ratio 1.19 (avg: 1.2).