Huntington Ingalls Industries, Inc. (HII)
Valuation Overview•Is Huntington Ingalls Industries, Inc. Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
Moderate quality score of 47/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
HII struggles with subpar profitability and pressured margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company demonstrates solid revenue growth (5.4% 3Y CAGR) paired with stable bottom-line earnings. However, profitability remains a major concern with severely compressed operating margins (4.9%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $3.1B | +8.2% | +5.4% | +5.9% | +5.9% | |
| EBITDA | $231.0M | — | +0.5% | — | — | |
| Net Income | $149.0M | +10.0% | +1.5% | — | +4.1% | |
| EPS (Diluted) | $3.79 | +10.2% | +2.1% | -2.1% | +6.3% | |
| Free Cash Flow | -$464.0M | +2953.8% | +18.1% | +1.4% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 12.4% | 13.2% | 13.5% | 16.4% |
| Operating Margin | 4.9% | 5.4% | 5.4% | 7.8% |
| Net Margin | 4.7% | 5.2% | 5.3% | 6.5% |
| FCF Margin | 8.2% | 4.2% | 4.3% | 5.2% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $3.70 | $3.79 | +2.4% | ||
| Q1'26 | $3.72 | $4.04 | +8.6% | ||
| Q4'25 | $3.30 | $3.68 | +11.5% | ||
| Q3'25 | $3.23 | $3.86 | +19.5% | ||
| Q2'25 | $2.90 | $3.79 | +30.7% | ||
| Q1'25 | $3.28 | $3.15 | -4.0% | ||
| Q4'24 | $3.86 | $2.56 | -33.7% | ||
| Q3'24 | $3.62 | $4.38 | +21.0% |
Total return is +24.2% (1Y), lagging the benchmark by -0.8%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -17.6% | -26.9% | — |
| 1Y | +24.2% | -0.8% | +2.3% |
| 3YCAGR | +11.3% | -6.8% | +7.3% |
| 5YCAGR | +8.5% | -3.7% | +12.3% |
| 10YCAGR | +7.4% | -5.8% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Huntington Ingalls Industries, Inc. (HII) valuation, health, and returns.
Huntington Ingalls Industries, Inc. is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Slightly cheap versus peers compared to industry peers. undervalued (implying +21.7% upside to DCF intrinsic value of $347.49)
Huntington Ingalls Industries, Inc. has multiple valuation anchors: DCF Intrinsic Value: $347.49 | Peer Relative Fair Value: $336.95 | Wall Street Analyst Target: $420.00 (implying +47.1% upside). A convergence of these signals offers higher conviction.
Huntington Ingalls Industries, Inc. displays fair financial health with a composite quality score of 47/100, supported by a Altman Z-Score of 2.2 (grey zone), Piotroski F-Score of 9/9, Return on Invested Capital (ROIC) of 6.2%.
Huntington Ingalls Industries, Inc. pays a 1.9% dividend yield, covered by a 35% payout ratio with 14 years of growth, supplemented by a 0.0% buyback yield.
Huntington Ingalls Industries, Inc.'s current growth trajectory is Accelerating. The company achieved +8.2% 1Y revenue growth and +10.2% 1Y EPS growth, compared to its 3Y revenue CAGR of +5.4%.
Wall Street consensus is Hold based on 27 analysts, beating EPS expectations in 83% of recent quarters with a 5-quarter streak. The consensus price target represents a +47.1% change from current levels.
Investment risks for Huntington Ingalls Industries, Inc. include: -37.1% 1-year max drawdown. Volatility risk is characterized by a beta of 0.74x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.