10Y annualized return is
positive but below market average
at 5.6% per year
HII has met or exceeded earnings expectations in
the majority of
recent quarters (7/10)
Attractive Price-to-Earnings Ratio
Low Price-to-Sales Ratio
Strong Return on Equity
Solid Net Profit Margin
Favorable Current and Quick Ratios
Sustainable Interest Coverage
💪 Strong Market Position
📈 Revenue Growth Potential
🔧 Operational Improvements
🌟 Strong Demand for Defense Services
🛠️ Focus on Innovation and Technology
High Price-to-Free Cash Flow Ratio
Low Operating Profit Margin
Moderate Debt Levels
⚠️ Margin Pressure
⏳ Uncertainty in Contract Negotiations
Huntington Ingalls Industries demonstrates a strong business model with a solid market position and growth potential, albeit facing challenges related to margin pressures and contract negotiations. The company’s focus on operational improvements and alignment with national defense needs positions it well for the future.
Analysis Date: February 6, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Huntington Ingalls Industries, Inc. (HII) is a company that builds and repairs military ships for the United States. They create different types of ships, including aircraft carriers and submarines, which are important for national security. HII also helps maintain these ships to keep them in good working order. Founded in 1886 and based in Virginia, the company plays a key role in supporting the U.S. Navy and Coast Guard.
Streams of revenue
Geographic Distribution
Estimations for reference only
Core Products
Business Type
Business to Government
Competitive Advantages
Key Business Risks
Latest News
NEWPORT NEWS, Va., April 16, 2025 (GLOBE NEWSWIRE) -- HII (NYSE: HII) hosted the secretary of the Navy at its Newport News Shipbuilding division Wedne...
MCLEAN, Va., April 16, 2025 (GLOBE NEWSWIRE) -- Esteban Jimenez of HII's (NYSE: HII) Mission Technologies division, was recently elected to the execut...
Huntington Ingalls stock has gained momentum in the last few trading sessions, aided by policy support and a double upgrade by Goldman Sachs. Tackling...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$175.83
Current Market Price: $185.59
IV/P Ratio: 0.95x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-6.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for HII
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (13.15)
P/B ratio ≤ 1.5 (1.55)
Current ratio ≥ 2.0 (1.08x)
Long-term debt < Net current assets (12.26x)
Margin of safety (-6.0%)
HII does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
HII has a return on equity of 12.81%, which indicates effective management in generating profit from shareholders' equity.
The net profit margin of 4.77% indicates that the company retains a good percentage of revenue as profit, demonstrating operational efficiency.
With an operating profit margin of only 4.53%, HII may face challenges in controlling costs and improving profitability.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
12.81%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-25)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
12.57%
Higher values indicate better efficiency in production
TTM (as of 2025-04-25)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
4.77%
Higher values indicate better overall profitability
TTM (as of 2025-04-25)
The current ratio of 1.08 and quick ratio of 1.08 indicate that HII has sufficient short-term assets to cover its short-term liabilities, reflecting strong liquidity.
An interest coverage ratio of 5.51 shows that HII is well-positioned to meet its interest obligations, which reflects good financial health.
The debt-to-equity ratio of 0.73 indicates that HII has a moderate level of debt relative to its equity, which could pose risks in economic downturns.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.73x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.08x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Huntington Ingalls Industries (HII) holds a dominant position in the defense sector, particularly in shipbuilding, with a significant backlog of $49 billion, including $27 billion funded. HII aims to secure over $50 billion in contract awards over the next 24 months, reflecting a robust demand for their products and services.
HII anticipates growing to $15 billion in annual revenue by 2030, with associated margin expansion and free cash flow growth. This projection is supported by a strong performance in the Mission Technologies division, which saw revenue growth of 9% year-over-year.
HII is focused on enhancing operational efficiency through increased hiring, cost reductions, and throughput improvements. They have set a target of achieving $250 million in annualized cost reductions.
HII's operating margins have been under pressure, with fourth-quarter shipbuilding margins dropping to 3.6%. The company faces challenges in achieving historical margins due to inflation and supply chain inefficiencies.
The anticipated defense spending growth, particularly in shipbuilding and technologies, is expected to create a favorable environment for HII. The company has a clear path to maintain strong revenue growth, aided by the passage of the Defense Authorization Act for fiscal year 2025.
HII's Mission Technologies division aligns closely with national security needs, presenting opportunities for growth in cyber, electronic warfare, and next-gen technologies. The company is well-positioned to innovate within these sectors.
HII is currently negotiating contracts that reflect the current economic conditions, and while there is optimism, the timing of these agreements remains uncertain, which could impact revenue projections.