Huntington Ingalls (HII) AI Stock Analysis

• Market Cap: $8.63B
• Dividend Yield: 2.41%
• Average Volume (3M): 838.57K
• Price to Earnings (P/E): 15.8
• Beta (1Y): 1.05
• Revenue Growth: 0.71%
• EPS Growth: -18.39%
• Country: US
• Employees: 44,000
• Sector: Industrials
• Sector Strength: 68
• Industry: Aerospace & Defense
• EPS (TTM): 13.96
• Shares Outstanding: 39,235,570
• 10 Day Avg. Volume: 871,602
• 30 Day Avg. Volume: 838,573
• PEG Ratio: 0.34
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.68
• Price to Cash Flow (P/CF): 5.00
• P/FCF Ratio: 6.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $182.29
• Price Target Upside: -16.37% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

Huntington Ingalls' overall stock score is bolstered by strong technical momentum and robust financial performance, despite challenges in margins and debt levels. The optimistic future guidance and strong contract wins provide a positive outlook, although operational challenges in shipbuilding and supply chain management could impact near-term results.

Positive Factors

Free Cash Flow Potential

HII is apt to generate a sizable free cash flow inflow upon signing the 17 sub contracts, which should significantly exceed the previous year's target.

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.

Outsourcing Strategy

HII is taking steps to improve execution by increasing outsourcing and focusing on hiring experienced individuals.

Negative Factors

Execution Challenges

Shipbuilding execution challenges persist, there is no quick fix, and consensus EPS will drop significantly.

Investor Sentiment

There is concern over HII’s 'ever-deferring' schedule of milestones, leading to cautious investor sentiment.

Profit Adjustments

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, Inc. engages in designing, building, overhauling, and repairing military ships in the United States. It operates through three segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Technical Solutions. The company is involved in the design and construction of non-nuclear ships comprising amphibious assault ships; expeditionary warfare ships; surface combatants; and national security cutters for the U.S. Navy and U.S. Coast Guard. It also provides nuclear-powered ships, such as aircraft carriers and submarines, as well as refueling and overhaul, and inactivation services of ships. In addition, the company offers naval nuclear support services, including fleet services comprising design, construction, maintenance, and disposal activities for in-service the U.S. Navy nuclear ships; and maintenance services on nuclear reactor prototypes. Further, it provides life-cycle sustainment services to the U.S. Navy fleet and other maritime customers; high-end information technology and mission-based solutions for Department of Defense (DoD), intelligence, and federal civilian customers; nuclear management and operations and environmental management services for the Department of Energy, DoD, state and local governments, and private sector companies; defense and federal solutions; and unmanned systems. Huntington Ingalls Industries, Inc. was founded in 1886 and is headquartered in Newport News, Virginia.

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 displays solid financial health with consistent revenue growth and strong cash flows. However, declining EBIT and EBITDA margins and a moderate debt level present challenges that could impact long-term stability.

Income Statement

Huntington Ingalls has demonstrated a solid financial performance with consistent revenue growth over the years. The company's gross profit margin remains strong, indicating efficient cost management. However, there is a noticeable decline in EBIT and EBITDA margins compared to previous years, suggesting potential cost pressures or pricing challenges.

Balance Sheet

The company's balance sheet reflects a moderate debt-to-equity ratio, indicating a balanced leverage position. The return on equity is commendable, showcasing effective utilization of shareholder funds. However, the equity ratio suggests a reliance on liabilities, which could pose risks if not managed carefully.

Cash Flow

Huntington Ingalls has shown strong operating cash flow generation, which exceeds net income, indicating good cash conversion. The free cash flow growth rate is positive, although it fluctuated in previous years. The company's ability to maintain positive free cash flow amid capital expenditures is a positive indicator of financial health.

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
535.00M	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
12.14B	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: 217.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 217.98 is above the 20-day moving average (MA) of 202.30, above the 50-day MA of 188.59, and below the 200-day MA of 220.55, indicating a neutral trend. The MACD of 4.01 indicates Negative momentum. The RSI at 66.86 is Neutral, neither overbought nor oversold. The STOCH value of 89.58 is Negative, 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
HII	79 Outperform	$8.63B	15.76	12.56%	2.41%	0.71%	-18.39%
NOC	78 Outperform	$77.23B	18.91	27.75%	1.54%	4.44%	110.33%
LHX	76 Outperform	$41.80B	28.27	7.85%	2.10%	9.82%	22.33%
GD	75 Outperform	$74.82B	20.45	17.44%	2.04%	12.88%	13.78%
LMT	74 Outperform	$111.40B	21.29	81.04%	2.71%	5.14%	-19.14%
Sector *	63 Neutral	$4.30B	10.98	5.71%	232.99%	4.77%	-5.69%
BA	39 Underperform	$118.01B	―	-162.23%	―	-14.49%	-399.90%

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.