Huntington Ingalls (HII) AI Stock Analysis

• Market Cap: $9.14B
• Dividend Yield: 2.27%
• Average Volume (3M): 725.09K
• Price to Earnings (P/E): 16.8
• Beta (1Y): 1.01
• Revenue Growth: -1.04%
• EPS Growth: -21.80%
• Country: US
• Employees: 44,000
• Sector: Industrials
• Sector Strength: 80
• Industry: Aerospace & Defense
• EPS (TTM): 3.79
• Shares Outstanding: 39,239,136
• 10 Day Avg. Volume: 732,854
• 30 Day Avg. Volume: 725,090
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 7.76
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $225.17
• Price Target Upside: -3.34% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

Huntington Ingalls' overall stock score reflects its stable financial performance, supported by solid profitability and a healthy balance sheet. Positive momentum in technical indicators boosts the score, but challenges in cash flow and revenue growth, along with shipbuilding delays, suggest caution. The stock's valuation is reasonable, and strategic initiatives could enhance future growth, balancing the risks and opportunities.

Positive Factors

Government Funding

The Trump Administration seems inclined to allocate more funds to the shipbuilding industrial base, which could benefit HII.

Mission Technology Performance

HII’s Mission Technology’s business outperformed expectations, with a funded BtB of 2.2x and ~$11bn of potential total awarded contract value.

Operational Progress

HII's new SC production facility is online and produced a carrier unit for NNS, indicating operational progress.

Negative Factors

Execution Challenges

HII's stock fell significantly after reporting earnings, highlighting concerns about its execution challenges.

Financial Outlook

Huntington Ingalls Industries disappointed investors with an adj. EPS miss and a downward revision of its 2024 outlook.

Supply Chain Issues

Shipbuilding problems linger with negative profit adjustments driven by labor and supply chain bottlenecks.

Huntington Ingalls Business Overview & Revenue Model

Company Description

Huntington Ingalls Industries (HII) is a leading American military shipbuilding company and a major provider of professional services to government and industry partners. The company operates through three primary segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Technical Solutions. HII designs, builds, and maintains a wide variety of military ships, including aircraft carriers, submarines, and amphibious assault vessels. Additionally, HII provides a range of professional and technical services, offering innovative solutions in defense and non-defense sectors.

How the Company Makes Money

Huntington Ingalls Industries generates revenue primarily through government contracts, particularly with the U.S. Department of Defense, for the construction and maintenance of military ships. The company's Ingalls Shipbuilding and Newport News Shipbuilding segments contribute significantly to its income by delivering high-value, long-term projects such as aircraft carriers and submarines. Additionally, the Technical Solutions segment provides a diverse range of services, including fleet support, unmanned systems, and information technology, which further contribute to the company's earnings. HII's financial performance is supported by strategic partnerships and collaborations across the defense industry, enhancing its capabilities and market reach.

Huntington Ingalls Financial Statement Overview

Summary

Huntington Ingalls demonstrates solid profitability with stable margins, a reasonable debt level, and improving equity position. Challenges exist in cash flow generation and revenue growth, indicating areas for strategic improvement.

Income Statement

Huntington Ingalls demonstrates strong profitability with a consistent gross profit margin around 25% to 26% over the years. The net profit margin has remained stable, observed at approximately 4.8% in the TTM. Revenue growth has been moderate, showing a compound annual growth rate of about 3.3% since 2020. EBIT and EBITDA margins suggest a stable operational performance, though there is a slight decline in EBIT margin in recent periods. Overall, the company shows steady profitability with room for improvement in revenue growth.

Balance Sheet

The balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.71 in the TTM, showing a reduction from previous years. The equity ratio is improving, reaching 39.4% in the TTM, indicating an increasing equity base. Return on equity is solid at around 11.4% in the TTM, down from previous highs, suggesting some pressure on profitability. The company maintains a stable financial position, though continued focus on reducing debt could enhance financial flexibility.

Cash Flow

The cash flow analysis reveals a decline in operating cash flow over recent periods, with the operating cash flow to net income ratio dropping to 0.37 in the TTM. Free cash flow has fluctuated, showing negative growth, which impacts the free cash flow to net income ratio. Despite these fluctuations, the company is maintaining positive free cash flow. Improving operational efficiency could strengthen cash flow metrics further.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.54B	11.45B	10.68B	9.52B	9.36B
	Gross Profit
1.45B	1.65B	1.44B	1.37B	1.67B
	EBIT
535.00M	781.00M	773.00M	513.00M	799.00M
	EBITDA
1.06B	1.29B	1.18B	1.00B	1.15B
	Net Income Common Stockholders
550.00M	681.00M	579.00M	544.00M	696.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
831.00M	430.00M	467.00M	627.00M	512.00M
	Total Assets
12.77B	11.21B	10.86B	10.63B	8.16B
	Total Debt
3.41B	2.67B	3.15B	3.49B	1.84B
	Net Debt
2.58B	2.24B	2.68B	2.87B	1.33B
	Total Liabilities
7.47B	7.12B	7.37B	7.82B	6.26B
	Stockholders Equity
4.67B	4.09B	3.49B	2.81B	1.90B
Cash Flow		Free Cash Flow
26.00M	678.00M	482.00M	429.00M	740.00M
	Operating Cash Flow
393.00M	970.00M	766.00M	760.00M	1.09B
	Investing Cash Flow
-348.00M	-236.00M	-268.00M	-1.95B	-759.00M
	Financing Cash Flow
356.00M	-771.00M	-658.00M	1.31B	103.00M

Huntington Ingalls Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 232.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HII, the sentiment is Positive. The current price of 232.95 is above the 20-day moving average (MA) of 223.32, above the 50-day MA of 206.71, and above the 200-day MA of 218.61, indicating a bullish trend. The MACD of 8.05 indicates Negative momentum. The RSI at 67.83 is Neutral, neither overbought nor oversold. The STOCH value of 65.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HII.

Huntington Ingalls Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	78 Outperform	$72.63B	18.89	18.23%	2.14%	14.11%	17.65%
LMT	78 Outperform	$109.70B	20.37	82.55%	2.74%	3.12%	-15.29%
LHX	76 Outperform	$40.42B	25.91	8.49%	2.15%	5.39%	36.86%
HII	71 Outperform	$9.14B	16.81	12.27%	2.27%	-1.04%	-21.80%
NOC	70 Outperform	$70.16B	19.42	25.41%	1.70%	0.61%	77.28%
Sector *	64 Neutral	$4.24B	11.64	5.23%	249.83%	4.07%	-10.54%
BA	52 Neutral	$140.21B	―	-162.23%	―	-9.15%	-406.76%

Huntington Ingalls Corporate Events

Huntington Ingalls Announces Key Leadership Changes

Huntington Ingalls Industries (HII), the largest military shipbuilder in the U.S., has announced leadership changes with Kari Wilkinson set to become the new president of Newport News Shipbuilding, effective January 2025. Wilkinson, who has successfully led Ingalls Shipbuilding, will succeed Jennifer Boykin as she retires. Concurrently, Brian Blanchette will take over Wilkinson’s role at Ingalls Shipbuilding, bringing over two decades of experience to his new position. These transitions aim to continue HII’s legacy of delivering critical shipbuilding capabilities vital to national security.