Investment Thesis
Huntington Ingalls demonstrates solid fundamental strength with 8.2% revenue growth, improving profitability (+10% net income YoY), and strong free cash flow generation of $794M (6.4% FCF margin). The company maintains healthy leverage (0.53x Debt/Equity) and solid interest coverage (6.3x), though modest operating margins (5.3%) and tight liquidity (1.13x current ratio) warrant monitoring in the capital-intensive shipbuilding sector.
HII Strengths
- Strong revenue growth of 8.2% YoY with net income growth of 10%, indicating improving operational leverage
- Robust free cash flow generation of $794M representing 6.4% of revenue, supporting debt reduction and shareholder returns
- Conservative leverage ratio of 0.53x Debt/Equity with adequate interest coverage of 6.3x, indicating financial stability
- Positive ROE of 11.9% and ROA of 4.7% demonstrate acceptable returns on invested capital
HII Risks
- Tight liquidity position with current ratio of 1.13x and quick ratio of 1.01x, limiting financial flexibility for operational challenges
- Low operating margin of 5.3% and net margin of 4.8% typical for shipbuilding, leaving little buffer for cost overruns or margin compression
- Capital intensity with CapEx of $402M (3.2% of revenue) and significant long-term debt of $2.7B, creating cash flow dependency
- High insider trading activity with 66 Form 4 filings in 90 days warrants monitoring for potential concerns about company prospects
Key Metrics to Watch
- Revenue growth sustainability and contract backlog trends
- Free cash flow conversion and working capital management
- Operating margin expansion as a percentage of growing revenue base
- Debt reduction pace relative to free cash flow generation
- Current ratio improvement to strengthen liquidity position
HII Financial Metrics
HII Profitability Ratios
HII Balance Sheet & Liquidity
HII 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 Growth Metrics (YoY)
HII Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| 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 |
| Q2 2023 | $2.7B | $130.0M | $3.27 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
HII Capital Allocation
HII SEC Filings
Access official SEC EDGAR filings for HUNTINGTON INGALLS INDUSTRIES, INC. (CIK: 0001501585)