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NOC trades against a final fair-value range of $486.28-$966.07, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs. Fair value range: low $486, high $966, with mid-point at $726.
Stock analysis

NOC fair value $486–$966

By StockMarketAgent.AI team· supervised by
Analyzed: 2026-05-13Next update: 2026-08-13Methodology v2.5Review: automatedArchetype: Mature compounder
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Last price
$558.30
▲ +167.35 (+29.97%)
Fair value
$726
$486–$966
Rating
Strong Buy
confidence 88/100
Upside
+30.0%
upside to fair value
Margin of Safety
$616.80
MoS level · 15%
Market Cap
$79.3B
P/E fwd 18.5

§1 Executive summary

  • Composite fair value $726 with high case $966.
  • Implied upside of 30.0% to fair value.
  • Moat 9/10 · confidence 88/100 · Mature compounder.
  • Trades below fair value with a meaningful cushion to the midpoint.
Fair value
$726
Margin of safety
+23.1%
Confidence
88/100
Moat
9/10

Educational analysis only — not financial advice. Always do your own due diligence.

$558.30Price
Low $486.28
Mid $725.65
High $966.07

NOC trades against a final fair-value range of $486.28-$966.07, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.

  • Intangible Assets (Patents, clearances, proprietary
    Intangible Assets (Patents, clearances, proprietary tech)
  • Switching Costs (Long product life
    Switching Costs (Long product life cycles, high integration)
  • Cycle upside
    Accelerating global defense spending and space commercialization.

§2 Bear case

A prolonged U.S. government continuing resolution combined with unexpected inflation in fixed-price development contracts.

Ways this thesis can break

Severe Budget Sequestration

· Low

A deeply divided Congress enforces strict defense budget caps, halting modernization of the nuclear triad and capping space spending.

FV impact
-30%
Trigger
1-3 Years

B-21 Cost Overruns

· Medium

The B-21 Raider program encounters severe technical hurdles leading to massive cost overruns on fixed-price lots.

FV impact
-15%
Trigger
2-4 Years

Commercial Space Disruption

· Medium

Rapid advancements by commercial space entities fully disrupt Northrop's military space and satellite businesses.

FV impact
-20%
Trigger
3-5 Years
Early-warning signals to monitor
MetricCurrentTrigger threshold
Operating margins compress below 10%MonitorDeterioration versus the report thesis
B-21 Raider delivery schedule slips significantlyMonitorDeterioration versus the report thesis
Sentinel ICBM program faces funding cutsMonitorDeterioration versus the report thesis
Free cash flow conversion drops below 1.0xMonitorDeterioration versus the report thesis
Book-to-bill ratio falls below 1.0 for multiple quartersMonitorDeterioration versus the report thesis

§3 Financial history

Income statement — last six periods
Line itemT−0T−1T−2T−3CAGR
Period2022-12-312023-12-312024-12-312025-12-31Trend
Revenue$36.60B$39.29B$41.03B$41.95B+4.7%
Gross profit$7.47B$6.55B$8.36B$8.31B+3.6%
Operating income$3.60B$2.54B$4.37B$4.28B+5.9%
Net income$4.90B$2.06B$4.17B$4.18B-5.1%
EPS (diluted)$31.47$13.53$28.34$29.08-2.6%
EBITDA$7.68B$4.23B$7.01B$7.21B-2.1%
R&D—————
SG&A$3.87B$4.01B$3.99B$4.03B+1.4%

Quality scores

Piotroski F-score
6 / 9
0–9 quality composite
Altman Z-score
3.41
Bankruptcy risk (>3 safe)
Beneish M-score
-2.44
Earnings manipulation risk
OCF / Net income
1.14×
>1 indicates high earnings quality
Accounting quality gate
Pass
Sector-adjusted gate
ROIC
13.4%
Return on invested capital
§3

Numbers analysis

Cash flow

Cash-flow quality is reflected in the OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement. / net incomeNet IncomeNet Income is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions., accounting-quality, and ROICROICReturn on invested capital. Operating profit (after tax) divided by invested capital. The single best gauge of capital-efficiency. Spread over WACC = economic value created. rows above.

Capital allocation

Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.

Individual subscribers — §4 onwards11 more sections

Read the full analysis — 11 more sections.

Competitive moat, industry cycle, peer comparison, intrinsic valuation, sensitivity, scenarios, earnings decision tree, position management, investor perspectives, scorecard, and final recommendation.

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REVERSE DCF FAQ

NOC reverse dcf questions

  1. Reverse DCF for NOC (NOC) backs out the revenue or earnings growth rate the current share price implies, holding terminal value, margin, and discount-rate assumptions constant.

FAQ

NOC — frequently asked questions

  1. Based on our latest analysis, NOC looks meaningfully undervalued. The current price is $558 versus a composite fair-value midpoint of $726 (range $486–$966), which implies roughly 30.0% upside to the midpoint.

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Same archetype: mature-compounder