NOC

NOC

Northrop Grumman

Hybrid Industrial

★ Quality 50/100
Overvalued

Price 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

50qualityReturnsMoatBalance sheetPricing power *Reinvestment
* This axis is an estimate: we don't have the figure that measures it for this company.

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

$35.7B
2021
$36.6B
2022
$39.3B
2023
$41.0B
2024
$42.0B
2025
CAGR 5 años: +4%

From $35.7B to $42.0B in 4 years. The business grows steadily.

Where each $100 of sales goes

Revenue $42.0B · FY2025

Costs and operations$37.8B · 90%
Net profit$4.2B · 10%

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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