NOC
Northrop Grumman
Hybrid Industrial
★ Quality 50/100Price today
$530.90
what the market pays
Worth
$431.12
calculated cycle value
Price is 23% above its value
charlieapp.co
A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Manufacturing + technology
$505.94
per share
How it's calculated
Northrop Grumman — high assistant path (2026-06-07). Review note.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Hybrid Industrial · vs 28 peers
You pay 26.3x times this business's cash flow; its sector median is 35.5x.
16% above what Charlie thinks it's worth (22x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $23.00/share × 22.0x multiplier minus $74.82 in negative net cash = $431.12 in intrinsic value. Today's price of $530.90 is 19% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 23% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $409.56.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$344.90
-20% off Value
🟡 Discounted
≤$409.56
-5% off Value
🔴 Today
$530.90
-19% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
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
So when would be a good price for Northrop Grumman?
By our calculation, not yet. We will email you the day it drops to $409.56 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.