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what it is
This company builds U.S. warships and submarines, then gets paid for years to maintain and upgrade them.
how it gets paid
Last year Huntington Ingalls made $12.5B in revenue. Aircraft carriers was the main engine at $3.6B, or 29% of sales.
why it's growing
Revenue grew 8.2% last year. Q4 sales rose 15.7% vs. prior year, driven by Newport News Shipbuilding and Ingalls Shipbuilding.
what just happened
Huntington Ingalls closed 2025 with record quarterly revenue of $3.48B and another earnings beat.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
75/100 earnings predictability — reasonably predictable
27.2x trailing p/e — priced about right
1.4% dividend yield — cash in your pocket every quarter
14.0% return on capital — nothing to write home about
xvary composite: 68/100 — average
What they do
This company builds U.S. warships and submarines, then gets paid for years to maintain and upgrade them.
Newport News is the only U.S. builder of nuclear aircraft carriers, and that is the moat. Monopoly → one domestic source for a mission-critical product → you do not shop around for another carrier yard. The backlog hit $53.1 billion at 12/31/25, or about 4.2 times 2025 revenue of $12.5 billion.
How they make money
$12.5B
annual revenue · their business grew +8.2% last year
Aircraft carriers
$3.6B
+6.0%
Submarines
$2.8B
+6.0%
Amphibious assault ships
$2.1B
+6.0%
Destroyers and cutters
$1.5B
+6.0%
Mission Technologies services
$2.5B
+8.2%
The products that matter
builds and maintains naval ships
Naval shipbuilding
$12.5B revenue · +8.2% growth
it is effectively the whole business. when your entire $12.5B revenue base sits in one operating lane, execution and federal demand matter more than portfolio mix.
100% of revenue
Key numbers
$53.1B
backlog
That is more than 4 times annual revenue, which means you are buying years of contracted work, not hope.
27.2x
trailing p/e
You are paying a premium multiple for a defense builder growing sales 6.0%, so execution has to stay clean.
10.5%
operating margin
Margin → profit left after running the business → so what: one bad contract can eat into a not-huge buffer.
14.0%
return on capital
Return on capital → profit from each dollar invested → so what: this is a solid business, but not a license to overpay.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 65 / 100
- long-term debt $2.7B (14% of capital)
- net profit margin 7.5% — keeps 8 cents of every dollar in revenue
- return on equity 15% — $0.15 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in HII 3 years ago → it's now worth $20,460.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Huntington Ingalls closed 2025 with record quarterly revenue of $3.48B and another earnings beat.
Q4 sales rose 15.7% vs. prior year, driven by Newport News Shipbuilding and Ingalls Shipbuilding. EPS came in at $4.04 versus a $3.82 consensus estimate, a 5.76% beat. Full-year commentary in wires often cites EBITDA % (~7.9% in one item below)—that is not the same line as the 10.5% operating margin in the KPI strip; do not merge them.
$3.48B
revenue
$4.04
eps
10.5%
gross margin
the number that mattered
The $377 million revenue beat matters most because it shows the yards are finally pushing more work through the system.
-
huntington ingalls industries closed out 2025 on a solid note.america's largest military shipbuilder reported december-period earnings of $4.04 per share, comparing favorably to the $3.15 posted in the fourth quarter of 2024, while surpassing the wall street consensus estimate by $0.15.
-
this marked the fourth consecutive period in which the bottom line exceeded the consensus expectation.
-
sales of $3.48 billion were up 15.7%, vs. prior year, driven by growth at newport news shipbuilding, ingalls shipbuilding, and mission technologies.
-
the top line set a new quarterly record and bettered the median of street expectations by $377 million.
-
for the full year, sales climbed 8.2% to 12.48 billion, with the operating margin (ebitda as a percentage of the top line) widening by about 40 basis points from improved economies of scale, to 7.9% from the 7.5% registered in 2024.hii's share price, as well as the stocks of most leading defense contractors, have been on a tear of late after president trump suggested that his administration was contemplating a sharply higher defense budget for 2027. we expect solid business momentum to keep earnings rising at a double-digit pace this year and next.
source: company earnings report, 2026
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What could go wrong
the biggest risk is U.S. Navy customer concentration. the wage lawsuit matters, but the entire revenue base still runs through federal shipbuilding demand.
med
U.S. Navy budget and program concentration
HII generated $12.5B in annual revenue from a business centered on Navy shipbuilding and support. If procurement timelines slip or priorities change, there is no consumer segment riding to the rescue.
Exposure: effectively 100% of the current revenue base depends on one end market and one customer set.
med
employee wage class action lawsuit
A judge refused to dismiss allegations that HII and other shipbuilders colluded to suppress wages. The case does not yet give you a clean dollar outcome, which is exactly why the overhang remains hard to price.
What matters: unresolved legal exposure plus management distraction in a business already built on fixed customer relationships.
med
valuation ahead of operating quality
The stock trades at 27.2x trailing earnings while net margin is 5.8% and return on capital is 10.5%. You are paying a premium for stability and scarcity, not for elite economics.
If FY2026 EPS does not reach $17.80, the multiple has room to compress even if the business stays healthy.
between customer concentration, legal overhang, and a premium multiple, HII gives you strategic relevance without much room for operational sloppiness.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
next earnings call
listen for whether management still sounds confident in the path from $15.39 FY2025 EPS to the $17.80 FY2026 estimate.
risk
wage lawsuit developments
the key question is not drama. it is whether the case moves toward a settlement range that investors can finally price.
metric
fy2026 eps estimate
currently $17.80. if that starts getting cut while the stock stays near $418.78, valuation becomes the story.
trend
revenue growth on a $12.5B base
last year was +8.2%. sustained growth would support the premium multiple. a slowdown would remind you this is still a contractor.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak, they still like the stock.
risk profile
average
stability score 3 — this is not a bunker stock, but it is not a rollercoaster either.
chart momentum
average
technical score 3 — the chart is constructive without screaming anything dramatic.
earnings predictability
75 / 100
management usually lands close to expectations. That matters more when the customer list is this concentrated.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 376 buyers vs. 268 sellers in 3q2025. total institutional holdings: 37.2M shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$298
$645
$419
current price
$472
target midpoint · +13% from current · 3-5yr high: $735 (+75% · 16% ann'l return)
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