📊 NOC Key Takeaways
Is Northrop Grumman Corp. /DE/ (NOC) a Good Investment?
Northrop Grumman exhibits deteriorating financial fundamentals despite positive accounting earnings. The company is burning significant cash with -$1.7B operating cash flow and -$1.8B free cash flow, which is unsustainable given $14.4B in debt. Combined with virtually flat net income growth (+0.2% YoY) and extremely poor capital returns (ROE 5.1%, ROA 1.7%), the company is not generating sufficient value to support its capital structure.
Northrop Grumman shows solid fundamental quality with double-digit operating and net margins, strong ROE, and healthy free cash flow generation. Growth is modest rather than high, but earnings and cash flow remain resilient, supporting a favorable view on the business’s profitability and balance sheet capacity. The main constraint is that liquidity and leverage are adequate rather than exceptional, so execution and cash conversion need to stay consistent.
Why Buy Northrop Grumman Corp. /DE/ Stock? NOC Key Strengths
- Moderate leverage with 0.84x debt-to-equity ratio provides some financial cushion
- Operating margin of 10% is reasonable for defense sector
- Revenue growing at 2.2% YoY and maintaining positive net income of $875M
- Consistent profitability with 10.8% operating margin and 10.0% net margin
- Strong capital efficiency, highlighted by 25.1% ROE and solid 8.1% ROA
- Healthy cash generation with $4.76B operating cash flow and $3.31B free cash flow
NOC Stock Risks: Northrop Grumman Corp. /DE/ Investment Risks
- Negative operating cash flow of -$1.7B is severely concerning and indicates operational distress or working capital problems
- Negative free cash flow of -$1.8B makes debt servicing and capital returns unsustainable long-term
- Critically low returns on capital (ROE 5.1%, ROA 1.7%) suggest inefficient deployment of $50B asset base
- Tightening liquidity with quick ratio of only 1.04x limits financial flexibility
- Flat profit growth (+0.2%) despite revenue expansion indicates margin compression
- Revenue and net income growth are low, indicating limited near-term expansion
- Leverage is meaningful with long-term debt of $15.70B and debt-to-equity of 0.94x
- Liquidity is only moderate, with a 1.10x current ratio leaving less room for operational shocks
Key Metrics to Watch
- Operating cash flow trend - must return to positive to validate business model
- Working capital metrics and cash conversion cycle - understand source of cash burn
- Return on equity improvement - currently inadequate for capital-intensive business
- Free cash flow conversion and FCF margin
- Revenue growth and operating margin sustainability
Northrop Grumman Corp. /DE/ (NOC) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Northrop Grumman Corp. /DE/ presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
NOC Profit Margin, ROE & Profitability Analysis
NOC vs Market Sector: How Northrop Grumman Corp. /DE/ Compares
How Northrop Grumman Corp. /DE/ compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Northrop Grumman Corp. /DE/ Stock Overvalued? NOC Valuation Analysis 2026
Based on fundamental analysis, Northrop Grumman Corp. /DE/ has mixed fundamental signals relative to the Market 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.
Northrop Grumman Corp. /DE/ Balance Sheet: NOC Debt, Cash & Liquidity
NOC Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Northrop Grumman Corp. /DE/'s revenue has grown significantly by 14% over the 5-year period, indicating strong business expansion. The most recent EPS of $13.53 reflects profitable operations.
NOC Revenue Growth, EPS Growth & YoY Performance
NOC Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $9.5B | $481.0M | $3.32 |
| Q3 2025 | $10.0B | $1.0B | $7.00 |
| Q2 2025 | $10.2B | $940.0M | $6.36 |
| Q1 2025 | $9.5B | $481.0M | $3.32 |
| Q3 2024 | $9.8B | $937.0M | $6.18 |
| Q2 2024 | $9.6B | $812.0M | $5.34 |
| Q1 2024 | $9.3B | $842.0M | $5.50 |
| Q3 2023 | $9.0B | $915.0M | $5.89 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Northrop Grumman Corp. /DE/ Dividends, Buybacks & Capital Allocation
NOC SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Northrop Grumman Corp. /DE/ (CIK: 0001133421)
📋 Recent SEC Filings
❓ Frequently Asked Questions about NOC
What is the AI rating for NOC?
Northrop Grumman Corp. /DE/ (NOC) has a Combined AI Rating of HOLD from Claude (SELL) and ChatGPT (BUY) with 76% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are NOC's key strengths?
Claude: Moderate leverage with 0.84x debt-to-equity ratio provides some financial cushion. Operating margin of 10% is reasonable for defense sector. ChatGPT: Consistent profitability with 10.8% operating margin and 10.0% net margin. Strong capital efficiency, highlighted by 25.1% ROE and solid 8.1% ROA.
What are the risks of investing in NOC?
Claude: Negative operating cash flow of -$1.7B is severely concerning and indicates operational distress or working capital problems. Negative free cash flow of -$1.8B makes debt servicing and capital returns unsustainable long-term. ChatGPT: Revenue and net income growth are low, indicating limited near-term expansion. Leverage is meaningful with long-term debt of $15.70B and debt-to-equity of 0.94x.
What is NOC's revenue and growth?
Northrop Grumman Corp. /DE/ reported revenue of $9.9B.
Does NOC pay dividends?
Northrop Grumman Corp. /DE/ pays dividends, with $333.0M distributed to shareholders in the trailing twelve months.
Where can I find NOC SEC filings?
Official SEC filings for Northrop Grumman Corp. /DE/ (CIK: 0001133421) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is NOC's EPS?
Northrop Grumman Corp. /DE/ has a diluted EPS of $6.14.
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 NOC a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Northrop Grumman Corp. /DE/ has a HOLD rating with 76% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is NOC stock overvalued or undervalued?
Valuation metrics for NOC: ROE of 5.1% (sector avg: 15%), net margin of 8.9% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy NOC stock in 2026?
Our dual AI analysis gives Northrop Grumman Corp. /DE/ a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is NOC's free cash flow?
Northrop Grumman Corp. /DE/'s operating cash flow is $-1.7B, with capital expenditures of $167.0M. FCF margin is -18.4%.
How does NOC compare to other Market stocks?
Vs Default sector averages: Net margin 8.9% (avg: 12%), ROE 5.1% (avg: 15%), current ratio 1.15 (avg: 1.8).