NOC
Northrop Grumman
Hybrid Industrial
★ Quality 50/100Price today
$514.98
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A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
What this business is made of
The business
One of the four blacksmiths on the planet who knows how to forge a nuclear bomber.
Northrop Grumman builds defense weaponry for the Pentagon and allies: the B-21 Raider bomber, space systems, missiles and combat electronics. It gets paid via multi-year contracts with the U.S. government, which provides the vast majority of its $42.0B in revenue.
It's one of three or four suppliers capable of building a strategic bomber. The classified know-how, security clearances and decades of programs create barriers no new competitor can jump. The customer is sovereign and needs it to survive.
Revenue history
From $35.7B to $42.0B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $42.0B · FY2025
Of every $100 in sales, $90 goes to costs and operations; $10 is left as net profit (10% margin).
Catalysts and risks
B-21 Raider production scaling toward serial deliveries starting 2026-2027.
U.S. defense budget topping $895B in FY2025, with geopolitical pressure rising.
FCF of $3.3B funding buybacks that shrink the share count every year.
Fixed-price contracts like the B-21 already generated cost-overrun charges; inflation can make them worse.
Debt of $15.2B against only $4.4B in cash limits the cushion against shocks.
Almost total dependence on a single customer: a budget cut or political shift hits directly.
Charlie's note
“A business where the customer wants you to make money because it needs you alive. That's rare and valuable. The fair price matters: at 22x normalized cash flow, you're paying for certainty, not growth.”
Analysis · June 2026
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