Lockheed Martin Corporation, a security and aerospace company, engages in the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services worldwide. The company operates through Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space segments. The Aeronautics segment offers combat and air mobility aircraft, unmanned air vehicles, and related technologies. The Missiles and Fire Control segment provides air and missile defense systems; tactical missiles and air-to-ground precision strike weapon systems; logistics; fire control systems; mission operations support, readiness, engineering support, and integration services; manned and unmanned ground vehicles; and energy management solutions. The Rotary and Mission Systems segment offers military and commercial helicopters, surface ships, sea and land-based missile defense systems, radar systems, sea and air-based mission and combat systems, command and control mission solutions, cyber solutions, and simulation and training solutions. The Space segment offers satellites; space transportation systems; strategic, advanced strike, and defensive systems; and classified systems and services in support of national security systems. This segment also provides network-enabled situational awareness and integrates space and ground global systems to help its customers gather, analyze, and securely distribute critical intelligence data. It serves primarily serves the U.S. government, as well as foreign military sales contracted through the U.S. government. The company was founded in 1912 and is based in Bethesda, Maryland.

Lockheed Martin Corporation

It has been about a month since the last earnings report for General Dynamics (GD). Shares have added about 0.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is General Dynamics due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for General Dynamics Corporation before we dive into how investors and analysts have reacted as of late.
General Dynamics' Q2 Earnings & Revenues Beat Estimates, Improve Y/Y
General Dynamics reported second-quarter 2025 earnings per share (EPS) of $3.74, which beat the Zacks Consensus Estimate of $3.59 by 4.2%. The bottom line also increased 14.7% from $3.26 recorded in the year-ago quarter.
The year-over-year bottom-line appreciation can be attributed to revenue growth as well as an improvement in operating earnings.
Total Revenues of GD
Revenues of $13.04 billion beat the Zacks Consensus Estimate of $12.35 billion by 5.6%. The top line also improved 8.9% from the prior-year figure.
The year-over-year improvement can be attributed to increased revenues from all of GD’s business segments, except Combat Systems.
GD’s Segmental Performance
Aerospace: The segment reported revenues of $3.06 billion, up 4.1% year over year. Operating earnings of $403 million improved 26.3% year over year.
Marine Systems: This segment’s revenues surged 22.2% from the year-ago quarter’s level to $4.22 billion. Operating earnings of $291 million improved 18.8% year over year.
Technologies: Revenues from this segment improved 5.5% year over year to $3.48 billion. Operating earnings totaled $332 million, which improved 3.8% year over year.
Combat Systems: The segmental top line of $2.28 billion slipped 0.2% from the year-ago quarter’s level. Operating earnings improved 3.54% year over year to $324 million.
Operational Highlights of GD
Operating earnings totaled $1.31 billion, up 12.9% from the year-ago quarter’s $1.04 billion.
Operating costs and expenses increased 8.5% year over year to $11.74 billion.
Interest expenses increased 4.8% year over year to $88 million.
GD’s Backlog
General Dynamics recorded a total backlog of $103.68 billion, much higher than the first-quarter 2025 level of $88.66 billion. The funded backlog at the end of the quarter was $83.88 billion.
Our model projected a backlog of $88.28 billion for the second quarter.
Financial Condition of GD
As of June 29, 2025, cash and cash equivalents totaled $1.52 billion compared with $1.70 billion as of Dec. 31, 2024.
The long-term debt as of the same date was $7.51 billion, higher than the 2024-end debt level of $7.26 billion.
During the first six months of 2025, cash generated by operating activities totaled $1.45 billion compared with $0.54 billion in the year-ago period.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, General Dynamics has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, General Dynamics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
General Dynamics belongs to the Zacks Aerospace - Defense industry. Another stock from the same industry, Lockheed Martin (LMT), has gained 6.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.
Lockheed reported revenues of $18.16 billion in the last reported quarter, representing a year-over-year change of +0.2%. EPS of $7.29 for the same period compares with $7.11 a year ago.
Lockheed is expected to post earnings of $6.36 per share for the current quarter, representing a year-over-year change of -7%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Lockheed. Also, the stock has a VGM Score of D.
One Big Gain, Every Trading Day
To help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.
Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%.
Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Is General Dynamics (GD) Up 0.7% Since Last Earnings Report?

Rocket Lab USA, Inc. (RKLB) is steadily moving forward with its next-generation Neutron rocket, designed to compete in the medium-lift reusable launch market. Unlike the small-satellite-focused Electron, Neutron will carry heavier payloads, making it suitable for large satellite constellations, national security missions and deep-space programs.
In July 2025, RKLB selected Bollinger Shipyards to build a 400-foot ocean platform for Neutron’s landing. This landing platform should play a crucial role in this rocket’s entry into the medium-lift launch market.
Looking ahead, the launch of the Neutron rocket is expected in the second half of 2025, with its flight hardware being moved to its launch site recently.
Currently, the large structures that make up the first stage of the Neutron are undergoing major structural tests, which upon completion, will allow the rocket to progress into a final integration and stage testing.
Once launched, the Neutron rocket will allow the company to compete for larger missions and higher-value contracts against major players in the space industry.
Other Stocks to Keep on the Watchlist
The space launch services market is witnessing steady growth, supported by several factors such as rapid advancements in technology, the rising need for satellite deployment, increasing commercial space activity and higher investment in space infrastructure.
These drivers are creating growth opportunities for other space stocks like Boeing (BA) and Lockheed Martin (LMT), which already have a well-established presence in the launch services market.
Through their joint venture, United Launch Alliance (ULA), LMT and BA have provided reliable access to space for nearly two decades. Since its formation in 2006, ULA has delivered more than 150 Atlas and Delta rockets for commercial, scientific and defense missions, underscoring its reputation as a dependable launch provider.
To strengthen its position in the evolving market, ULA recently launched the Vulcan rocket, which offers more affordable and flexible launch options, making it suitable for a wide variety of missions.
RKLB’s Price Performance, Valuation and Estimates
Shares of RKLB have gained 496.7% in the past year compared with the industry’s 35.8% growth.
Image Source: Zacks Investment Research
The company shares are expensive on a relative basis, with its forward 12-month Price/Sales being 26.09X compared with its industry’s average of 10.17X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for RKLB’s 2025 and 2026 losses has improved over the past 60 days.
Image Source: Zacks Investment Research
RKLB stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
One Big Gain, Every Trading Day
To help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.
Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%.
Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Rocket Lab's Neutron Progressing Steadily Toward Launch

General Dynamics Corporation’s (GD) business unit, Mission Systems, recently clinched a contract to produce and install advanced electronic systems for U.S. Navy ships. The work includes developing new software and hardware, building the systems and helping to install them on vessels. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Valued at $15.3 million, the contract is expected to be completed by August 2026. This contract includes options which, if exercised, would raise the contract value to $91.1 million and extend the completion date through August 2030. The majority of the work related to this deal will be executed in Manassas, VA; Groton, CT; and Las Vegas, NV.
GD’s Growth Prospects
Rising complexity in naval operations, growing demand for advanced systems integration and increasing investment in shipset production and platform installations are driving growth in the naval shipbuilding market. This surge is fueled by the need for modernized fleet with enhanced communication, electronics and mission-critical systems.
This is likely to have prompted the Fortune Business Insights firm to forecast a compound annual growth rate of 5.6% for the global naval vessels and surface combatants market during the 2023–2030 time period.
This growth is likely to benefit General Dynamics, a prominent contractor in the shipbuilding market. Its Mission Systems division is responsible for providing software, hardware and platform integration support to the U.S. Navy. The division also plays a key role in designing and installing advanced systems that enhance the operational capabilities of naval vessels, positioning the company to capture a significant share of this expanding market.
Opportunities for Other Defense Stocks
Other defense companies that are likely to enjoy the perks of the expanding global shipbuilding market have been discussed below:
Lockheed Martin (LMT): The company manufactures Littoral Combat Ships (LCS). Its freedom-variant LCS is a resilient, flexible warship designed to serve the evolving missions of the U.S. Navy. Its speed, strength and versatility make it a critical tool in crucial missions.
Lockheed’s long-term (three to five years) earnings growth rate is 10.3%. The Zacks Consensus Estimate for LMT’s 2025 sales implies an improvement of 4.6% from the 2024 figure.
Huntington Ingalls Industries (HII): Its business segment designs and constructs non-nuclear ships for the U.S. Navy and the U.S. Coast Guard, including amphibious assault ships, expeditionary warfare ships, surface combatants and national security cutters.
Huntington’s long-term earnings growth rate is 11.6%. The Zacks Consensus Estimate for HII’s 2025 sales indicates an increase of 3.7% from the year-earlier level.
BAE Systems (BAESY): It designs, builds, commissions, repairs and supports a full range of complex naval ships, from offshore patrol vessels to aircraft carriers. Its Queen Elizabeth Class Aircraft Carriers are the largest warships ever constructed in the United Kingdom.
BAESY boasts a long-term earnings growth rate of 14.4%. The Zacks Consensus Estimate for BAE Systems’ 2025 sales indicates growth of 63.4% from the 2024 level.
GD Stock Price Movement
Shares of General Dynamics have gained 6.6% in the past month compared with the industry’s 2.5% growth.
Image Source: Zacks Investment Research
GD’s Zacks Rank
GD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
See our %%CTA_TEXT%% report – free today!
7 Best Stocks for the Next 30 Days
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

General Dynamics Secures a Contract for Upgrading Navy Ships

Heico Corp. (HEI) is scheduled to release third-quarter fiscal 2025 earnings on Aug. 25, 2025, after market close.
The company has a four-quarter average earnings surprise of 11.87%.
Robust sales growth expectations, along with increasing gross profit margin, are likely to have boosted HEI’s overall bottom line.
Flight Support Group Unit’s Revenues Likely to Rise
Higher sales volume from all product lines, especially impressive sales from aftermarket parts and distribution along with Wencor businesses, is likely to have boosted the Flight Support Group unit’s top line in the fiscal third quarter.
The Zacks Consensus Estimate for the Flight Support Group unit’s revenues is pegged at $780.6 million, which indicates an increase of 14.5% from the year-ago quarter’s figure.
Heico Corporation Price and EPS Surprise
Electronic Technologies’ Revenues Likely to Increase
Higher sales volumes from space, electronics and aerospace products are likely to have boosted the Electronic Technologies unit’s revenue performance.
The Zacks Consensus Estimate for the Electronic Technologies unit’s revenues is pegged at $346.9 million, which indicates an increase of 7.7% from the year-ago quarter’s figure.
Q3 Estimates for HEI Stock
Sales growth anticipated across both of its major segments is likely to have boosted the company’s overall fiscal third-quarter revenue performance.
The Zacks Consensus Estimate for HEI’s third-quarter sales is pegged at $1.11 billion, which indicates an increase of 12.2% from the prior-year figure.
Robust sales growth expectations are projected to have boosted the company’s overall bottom line. Additionally, increasing gross profit margins from most of the product lines, except defense and medical products at its Electronic Technologies unit, are likely to have further added impetus to its earnings in the fiscal third quarter.
The Zacks Consensus Estimate for HEI’s fiscal third-quarter earnings is pegged at $1.12 per share, which indicates year-over-year growth of 15.5%.
What the Zacks Model Unveils for HEI
Our proven model does not conclusively predict an earnings beat for HEI this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.
Earnings ESP: Heico has an Earnings ESP of -3.74%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: HEI currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Recent Defense Releases
RTX Corporation’s (RTX) second-quarter 2025 adjusted earnings per share (EPS) of $1.56 beat the Zacks Consensus Estimate of $1.45 by 7.6%. The bottom line also improved 10.6% from the year-ago quarter’s level of $1.41.
RTX’s second-quarter sales totaled $21.58 billion, which surpassed the Zacks Consensus Estimate of $20.53 billion by 5.1%. The top line also surged a solid 9.4% from $19.72 billion recorded for the second quarter of 2024.
Lockheed Martin Corporation (LMT) reported second-quarter 2025 adjusted earnings of $7.29 per share, which beat the Zacks Consensus Estimate of $6.49 by 12.3%. The bottom line increased 2.5% from the year-ago quarter's reported figure of $7.11.
Net sales were $18.16 billion, which missed the Zacks Consensus Estimate of $18.56 billion by 2.2%. The top line, however, inched up 0.2% from $18.12 billion reported in the year-ago quarter.
Northrop Grumman Corporation (NOC) reported second-quarter 2025 adjusted earnings of $7.11 per share, which beat the Zacks Consensus Estimate of $6.71 by 6%.
NOC’s total sales of $10.35 billion in the second quarter beat the consensus estimate of $10.06 billion by 2.9%. The top line also rose 1.3% from $10.22 billion reported in the year-ago quarter.
#1 Semiconductor Stock to Buy (Not NVDA)
The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.
One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.
See This Stock Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Will Robust Segmental Sales Growth Boost Heico's Q3 Earnings

On Aug. 13, U.S. President Donald Trump signed a new executive order, aimed at dramatically accelerating the U.S. commercial space industry by reducing environmental review timelines, streamlining launch and spaceport permits, and expediting approvals for novel missions to enhance national and economic security. This regulatory push should act as a major growth catalyst for defense titan, Lockheed Martin Corp. (LMT), which has been at the forefront of the space industry for more than half a century now.
Notably, Lockheed is a prime contractor for NASA's deep-space Orion spacecraft and builds key satellites for national security. LMT’s most direct benefit comes through its joint venture with Boeing, United Launch Alliance (“ULA”), which is a major player in launching crucial government payloads.
In particular, the order's mandate to expedite environmental reviews at launch sites and the push to reform safety rules for vehicles with advanced flight termination systems can be projected to expedite ULA's Vulcan Centaur rocket launch with less delay and cost.
As this executive order slashes regulatory delays and costs, Lockheed's strategy to commercialize Orion through reusability and flexible missions should prove beneficial. By streamlining launch cadence and approvals, the order directly supports Lockheed's push to improve cost-effectiveness and meet NASA's evolving space exploration needs more competitively.
Other Stocks to Benefit
LMT apart, stocks like Boeing (BA) and L3Harris Technologies (LHX) that are deeply involved in space missions should also benefit from the aforementioned executive order, which pushes to substantially increase commercial space launch cadence.
Notably, Boeing is part of NASA’s Space Launch System (“SLS”), the only proven deep-space optimized, super-heavy lift rocket built to carry astronauts and cargo farther and faster than any rocket in history. BA is the prime contractor for the SLS program’s core stage, upper stage and avionics systems.
On the other hand, L3Harris is involved in the Artemis II mission through its Aerojet Rocketdyne business unit, which provides the RS-25 engines that power the SLS core stage. The company supported more than 2,100 space launches that provided critical intelligence to the United States.
The Zacks Rundown for LMT
Shares of LMT have lost 9% in the year-to-date period against the industry’s 26.9% growth.
Image Source: Zacks Investment Research
The company’s shares are trading at a discount on a relative basis, with its forward 12-month Price/Earnings being 16.26X compared with its industry’s average of 27.54X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for LMT’s near-term earnings has moved south in the past 60 days.
Image Source: Zacks Investment Research
LMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
See our %%CTA_TEXT%% report – free today!
7 Best Stocks for the Next 30 Days
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Will Trump's New Executive Order Fast-Track Lockheed's Space Ambitions?

Palantir Technologies PLTR has emerged as one of the most talked-about names in the S&P 500, and not just for what it does, but for what investors are willing to pay for it. With a market capitalization of $420 billion, it now surpasses giants like Coca-Cola and Bank of America. Yet, when viewed through a valuation lens, Palantir stands alone in its league.
Its trailing 12-month price-to-earnings ratio exceeds 580X, and its forward 12-month multiple hovers above 225X. Even more striking is its enterprise value relative to forward 12-month revenues of more than 82X, a level rarely seen, even during the most exuberant periods in market history. By that metric, Palantir looks far more expensive than nearly every other established U.S. stock over the past two decades.
Such elevated valuations raise the bar for future performance. For a company trading at these levels, expectations around revenue acceleration, margin expansion and long-term scalability must not only be met, but also exceeded. Even minor disappointments can trigger sharp corrections as multiples revert toward historical norms. Companies in the past that reached these kinds of revenue multiples — often 30x or higher — eventually faced tough questions about sustainability. Optimism alone is rarely sufficient when fundamentals lag.
That said, Palantir’s expanding government and commercial contracts, its robust and evolving AI platforms, and consistent execution lend credibility to its premium valuation. While risks remain, we view Palantir as one of the most compelling long-term AI plays available today.
PLTR’s Price Performance, Estimates
The stock has surged a whopping 130% year to date, significantly outperforming the industry’s 23% rally.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for PLTR’s earnings has increased 21.4% over the past 30 days.
Image Source: Zacks Investment Research
PLTR stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stable Defense Alternatives to Palantir
As PLTR’s valuation moves higher, Lockheed Martin LMT and RTX Corporation RTX offer more grounded defense exposure.
Lockheed Martin, with its massive defense contracts, provides steady cash flow and less volatility than PLTR. Its trailing 12-month price-to-earnings ratio is below 25X, and its forward 12-month multiple is just above 16X. Lockheed Martin continues to benefit from global rearmament while trading at modest earnings multiples.
Similarly, RTX shines through missile systems. RTX’s defense backlog, like LMT's, underscores its stability. Its trailing 12-month price-to-earnings ratio is below 34X and its forward 12-month multiple is just above 24X.
See our %%CTA_TEXT%% report – free today!
7 Best Stocks for the Next 30 Days
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Palantir Stock's Valuation: Overstretched or Rightfully Earned?

Making Sense of Market Hyperbole

Key Points
For the first two decades of the 21st century, defense stocks sold for an average of 1.4x sales.
Today, these same defense stocks cost twice as much.
The defense sector is booming, yes. But the risk is also rising.
For more than a year now, I've been warning investors that defense stocks cost too much. At first, that warning seemed prescient, when shares of almost all of America's leading publicly traded defense companies declined within months of my sounding the alarm. Fast forward nearly a year, and things have gotten both better... and worse.
The better: Defense stock prices bounced back (which should make current shareholders happy).
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
The worse: As of today, almost all defense stocks look more overpriced than ever before. For anyone looking to buy new shares of defense stocks, this is bad news.
What history says about defense stocks
How do I come to these conclusions? By looking at the data.
Over the 10-year period running from 2004 to 2013, over the 10 years running from 2014 to 2023, and over the 20-year period running from 2004 to 2023, I've calculated the average enterprise value-to-sales ratios (EV/S) for each of 10 major U.S. defense companies, using data from S&P Global Market Intelligence.
(As a reminder, EV/S ratios are similar to price-to-sales ratios, except that EV/S adjusts market capitalizations to factor in net cash on the balance sheet -- or, more commonly, net debt).
As you'll see below, these data show that defense companies early in the 21st century cost about 1x their annual sales, but that prices have been climbing steadily for the past decade. Averaging out the numbers, for the past 20 years defense stocks have cost about 40% more than their annual sales -- and this is the number I'm tentatively assuming to be the new "fair value" for defense stocks.
Average enterprise value-to-sales ratio (EV/S) from:
2004-2013
2014-2023
2003-2023
Average
1.06
1.89
1.40
Data source: S&P Global Market Intelligence. * Huntington Ingalls data begins in 2011, the year when Northrop Grumman spun off Huntington Ingalls as a separate company. ** Leidos data begins in 2006, the year of its IPO. Data on its average enterprise value-to-sales ratio for 2014 is missing because the company changed its fiscal year in 2015, skewing the data somewhat.
Now we compare these 20-year-average numbers to what the stocks cost today. (To make it easier for readers to quality-check my numbers, I provide both EV/S, and more commonly available P/S ratios).
EV/S today
Price-to-sales ratio today
Boeing
2.74
2.21
General Dynamics
1.86
1.71
Huntington Ingalls
1.13
0.91
Kratos Defense & Security Solutions
9.20
8.87
Leidos Holdings
1.62
1.38
L3Harris Technologies
2.91
2.40
Lockheed Martin
1.69
1.42
Northrop Grumman
2.43
2.08
RTX Corp
2.95
2.51
Textron
1.16
1.03
Average
2.77
2.45
What this means for defense stock investors
So what has changed since the last time we checked in on the defense stocks, three months ago?
Basically, every single one of these stocks, with the sole exception of Lockheed Martin, has gotten more expensive. Lockheed, if you recall, suffered a steep sell-off after reporting "a significant profit miss" last month caused by a near-$1 billion charge on "a classified aerospace project," and it still hasn't fully recovered from that misstep. But all the others have.
Again, this probably sounds like good news for investors who own defense stocks. But these stretched valuations bring with them a significant risk of future steep declines, for both existing and new buyers. The average EV/S ratio of this group, 2.77, means that defense stocks as a whole currently cost nearly twice what has historically been their fair value.
Will this decline happen tomorrow? Probably not. In fact, with military tensions continuing to rise in the South China Sea and elsewhere, active conflict persisting in the Middle East, and Europe still embroiled in its biggest land conflict since World War II, investors may keep betting on military stocks for quite some time.
But with valuations as extreme as what we see today, I simply don't see much reason to expect defense stocks to move higher. On the contrary, if I were to bet on it, my hunch is that over the next decade, defense stocks will underperform the S&P 500 by a significant margin.
Where to invest $1,000 right now
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,070%* — a market-crushing outperformance compared to 184% for the S&P 500.
They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.
*Stock Advisor returns as of August 13, 2025
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends L3Harris Technologies. The Motley Fool recommends Lockheed Martin, RTX, and Textron. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Defense Stocks Just Got Even More Expensive

Key Points
The U.S. Air Force placed a seven-year supply order for $4.3 billion worth of JASSM and LRASM missiles with Lockheed Martin.
The Air Force also ordered six years' worth of AMRAAM missiles from RTX for $3.5 billion.
RTX will probably earn a lot more profit on its missiles than Lockheed will.
"A billion here, a billion there, and pretty soon you're talking real money."
-- Senator Everett Dirksen
The honorable senator from Illinois went down in the history books with this famous quip about government spending -- which is nowhere truer than in the defense department, where billion-dollar paydays pop up with regularity. Still, when I took a look at the list of Pentagon contracts published on July 31 in particular, I admit my eyes did goggle a little.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
In just two announcements amounting to fewer than 600 words total, the U.S. government awarded Lockheed Martin (NYSE: LMT) and RTX Corporation (NYSE: RTX) just under $7.8 billion.
Big news for LockMart and RTX
Both contracts concern the ordering of missiles for the United States Air Force.
Lockheed Martin's Missiles and Fire Control division got the larger order: $4.3 billion to upsize a previous contract instructing Lockheed to build and deliver Joint Air-To-Surface Standoff Missiles (JASSM) and Long-Range, Anti-Ship Missiles (LRASM) for use by the USAF and foreign allies Finland, Japan, the Netherlands, and Poland by Jan. 31, 2033.
RTX's Raytheon military products division was awarded $3.5 billion to supply Advanced Medium Range Air-to-Air Missiles (AMRAAM) by fiscal third-quarter 2031. In addition to the U.S. Air Force, these missiles are destined for the air forces of a huge host of U.S. allies, covering almost the entire alphabet: Australia, Belgium, Canada, Denmark, Finland, Germany, Hungary, Israel, Japan, Kuwait, Lithuania, the Netherlands, Poland, Spain, Sweden, Switzerland, Taiwan, Ukraine, and the United Kingdom.
How to put big numbers in context
Are you impressed yet? Well, before getting too excited about the large numbers being bandied about, make sure to note the completion dates for both contracts. Lockheed Martin's LRASM/JASSM sales, for example, run through early 2033. That means you need to spread out the $4.3 billion contract value over more than seven years to get a sense of how much annual revenue this contract will contribute, and whether it's enough to "move the needle" on Lockheed stock.
Here's the answer: It bumps up Lockheed Martin's $71 billion-a-year revenue stream to perhaps $71.7 million -- an increase of less than 1%.
Similarly, RTX's $3.5 billion win spreads across six years. That works out to less than $600 million a year in extra orders. On RTX's $84 billion revenue stream, it's an increase of at most 0.7%.
Plus, bear in mind that the Pentagon was already buying missiles from both these companies. The new orders -- in large part -- will simply replenish backlog and continue revenues that LockMart and RTX were already collecting. Viewed in that context, it's entirely possible that the ongoing increase in annual revenue for each company will be less than 1%... or even less than 0.7%.
What this means for investors
All this said, and the caveats notwithstanding, we're still "talking real money" here -- even if it's not necessarily "move the needle" amounts of money. What's surprising to me is how much better RTX has been lately at turning revenue money into GAAP profits.
According to data from S&P Global Market Intelligence, Lockheed Martin's operating profit margin in its Missiles and Fire Control division is currently an anemic 4.2%, making it by far the least profitable of Lockheed's four main business divisions.
RTX's Raytheon division, in contrast, earns 9.7% operating margins on its sales -- twice Lockheed MFC's margin. This makes Raytheon RTX's second most profitable business division after airplane parts division Collins Aerospace, despite Raytheon being the company's smallest division by revenue.
Strange as it may sound, while RTX won the smaller of the two (still very large) missile contracts last week, measured both by absolute value and by value as a percentage of total sales, RTX is almost certain to earn the most profit from its Pentagon contract.
There's a reason why RTX stock sells for 2.5 times annual sales, while Lockheed stock is valued relatively less, at just 1.4x sales.
And RTX's superior profit margin is that reason.
Should you invest $1,000 in RTX right now?
Before you buy stock in RTX, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and RTX wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $663,630!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,115,695!*
Now, it’s worth noting Stock Advisor’s total average return is 1,071% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of August 13, 2025
Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin and RTX. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The U.S. Air Force Just Ordered $7.8 Billion in New Missiles, and These 2 Defense Contractors Will Profit

Lockheed Martin Corporation (LMT) recently secured a modification contract valued at $720.1 million to produce Joint Air-to-Ground Missiles (JAGM) and Hellfire missiles. The work related to this deal will be carried out in Ocala, FL, and is projected to be completed by Sept. 30, 2028.
The award has been provided by the U.S. Army Contracting Command, Redstone Arsenal, AL.
What’s Favoring LMT Stock?
With countries worldwide enhancing their defense capabilities, spending on advanced military arms and ammunition has been rapidly increasing. This also includes growing investments in missiles and missile systems, which are crucial for warfare missions. Lockheed, as a prominent manufacturer of missiles and missile defense systems, has thus been witnessing a steady flow of orders from the Pentagon and other U.S. allies. The latest contract win is an example of that.
Notably, LMT Hellfire is a multipurpose missile capable of defeating a broad target set. On the other hand, JAGM is a next-generation missile that combines the capabilities of LMT’s Hellfire and LONGBOW missiles into one system, providing multi-domain combat solutions.
The aforementioned missiles’ viability in the defense industry ushers in solid order flow for Lockheed, like the latest one, further reflecting the solid demand that they boast in the missile market.
LMT Stock’s Growth Prospects
Rising military conflicts, terrorism and border disputes have led nations to increase their focus on national security, particularly on missile defense systems, backed by the rapid development of advanced missile technologies over the last decade.
This is likely to have prompted Mordor Intelligence to forecast a compound annual growth rate of 5% for the missiles and missile defense systems market during the 2025-2030 time period.
This should benefit Lockheed, with its Missile and Fire Control unit being a recognized developer of high-performance missiles. The unit pursues business in more than 50 countries worldwide. Some of its major programs are the Patriot Advanced Capability-3 and Terminal High Altitude Area Defense air and missile defense programs as well. Its prominent missiles include the Precision Strike Missile and the Long Range AntiShip Missile.
Prospects of LMT’s Peers
Other defense companies that are likely to enjoy the perks of the expanding missiles and missile system market have been discussed below.
Northrop Grumman Corporation (NOC): Northrop Grumman provides high-speed, long-range strike weapons like the AARGM-ER, which is a supersonic, air-launched tactical missile system. It also develops and builds advanced missile defense technology, ranging from command systems to directed energy weapons, advanced munitions and powerful sensors.
RTX Corporation (RTX): It is known for its missile defense systems like the Patriot and SM-6, which are in high demand globally. RTX also provides advanced sensors and interceptors to identify, track and defeat threats as part of a layered missile defense.
The Boeing Company (BA): It manufactures various missile defense systems, including the Ground-based Midcourse Defense, Aegis Ballistic Missile Defense and Avenger. Boeing-built and supported air and missile defense systems have been protecting its customers for nearly 25 years against threats ranging from intercontinental ballistic missiles to hostile aircraft.
See our %%CTA_TEXT%% report – free today!
7 Best Stocks for the Next 30 Days
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Lockheed Martin Corporation

Sign up and unlock all the capabilities of the AI-screener