Northrop Grumman Corporation (NOC)
Quantitative Summary
DeterministicAt 17.7x earnings — a 61% discount to the sector average of 44.7x — NOC is in the lower valuation range. Financial health is average: Piotroski 6/9, Altman Z 3.3. DCF fair value of $1262 implies 85% upside from current prices based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedNorthrop Grumman demonstrates robust fundamental quality, generating capital at a rate significantly exceeding its cost of equity with an ROIC-WACC spread of +7.2%. The 25.1% return on equity is primarily driven by financial leverage and asset turnover rather than margin expansion, as evidenced by the DuPont decomposition where net margins sit at 10.0% while the equity multiplier reaches 3.08x. Financial stability indicators remain strong, supported by a Piotroski F-Score of 6/9, an Altman Z-Score of 3.5 indicating low bankruptcy risk, and a Beneish M-Score of -2.43 suggesting minimal earnings manipulation concerns. However, the profitability factor (RMW) registers at -0.333, highlighting that despite high leverage, the core operational efficiency relative to peers may be underperforming in terms of pure margin generation power.
Valuation metrics present a complex picture where current multiples diverge sharply from intrinsic value models versus sector norms. The stock trades at 24.2x earnings, which is notably discounted compared to the industrials sector average of 32.1x. In contrast to this relative cheapness, the DCF model implies substantial upside potential with a fair value estimate of $3,151 and an implied growth rate that appears inconsistent with current fundamentals given a negative ten-year FCF growth projection of -2.6%. This divergence suggests the market may be pricing in different risk premiums or long-term trajectory assumptions than those reflected in the discounted cash flow analysis, creating a significant gap between traditional relative valuation and absolute intrinsic value models.
Risk-reward dynamics are further complicated by conflicting factor exposures and insider behavior. While the stock exhibits strong momentum characteristics with an annual Fama-French alpha of 38.20% and a positive value tilt (HML: 0.216), the recent net insider selling flow of $26,219,193 over ninety days introduces a counterbalancing signal often interpreted as caution from management regarding near-term prospects. The combination of weak profitability factor performance against strong alpha generation and significant executive offloading creates an environment where the attractive valuation spread must be weighed carefully against potential headwinds in operational execution or insider confidence levels.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 2% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 6% | 7.4% | 9.4% |
|---|---|---|---|
| 2% | $1475 | $1041 | $721 |
| 3% | $1944 | $1262 | $824 |
| 4% | $2882 | $1610 | $965 |
Center = base case. Green = >10% upside, Red = >10% downside vs $536.59.
Pre-computed DCF: WACC=7.4%, terminal growth 3%. Fair value $1262 (+85.2%). Not investment advice.
Valuation Context
Currently trading 15% above its 5-year average P/E of 20.1x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedNorthrop Grumman's stock is trading above both its 50-day and 200-day moving averages, indicating a strong upward trend in the short to medium term. The RSI reading of 58.8 suggests that the stock has moderate positive momentum but isn't yet considered overbought, implying there could be room for continued growth if current trends persist.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-06-01 | $2.4700 | +6.9% |
| 2026-02-23 | $2.3100 | 0.0% |
| 2025-12-01 | $2.3100 | 0.0% |
| 2025-09-02 | $2.3100 | 0.0% |
| 2025-06-02 | $2.3100 | +12.1% |
| 2025-03-03 | $2.0600 | 0.0% |
| 2024-12-02 | $2.0600 | 0.0% |
| 2024-09-03 | $2.0600 | 0.0% |
| 2024-05-24 | $2.0600 | +10.2% |
| 2024-02-23 | $1.8700 | 0.0% |
| 2023-11-24 | $1.8700 | 0.0% |
| 2023-08-25 | $1.8700 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like HACK or ITA, the fund manager is mechanically forced to buy or sell NOC shares regardless of Northrop Grumman Corporation's individual fundamentals. We estimate $10.3B of passive capital is structurally linked to NOC through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Northrop Grumman Corporation to visualize passive redemption contagion across ETFs and collateral stocks.
If Northrop Grumman Corporation (NOC) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies GE Aerospace (GE) as the most exposed collateral stock, sharing 1 ETFs with NOC. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 34 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
NOC Ownership Dynamics
Passive funds hold 1 in every 8 NOC shares, reducing daily market volatility.
Northrop Grumman Corporation (NOC) exerts measurable gravity on the passive index market, currently representing 5.2% of the Amplify Cybersecurity ETF (HACK) and 3.9% of the ITA (ITA). Across 33 tracked ETFs, approximately 18M shares (12.4% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest NOC Exposure
Float lock-up computed from 33 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
NOC Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Northrop Grumman Corporation over the past year sits near $566.63 (16% of 252-day volume). The current price of $536.59 sits 5.3% below the POC — suggesting potential mean-reversion upside if institutional demand reasserts at this level. The highly concentrated volume profile (16% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
NOC Capital Efficiency
How efficiently does Northrop Grumman Corporation convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Northrop Grumman Corporation converts 46% of its EBITDA into free cash flow, a healthy conversion rate indicating efficient capital management — the business generates substantial cash after reinvestment. The 54% reinvestment rate signals aggressive capacity expansion. The positive ROIC-WACC spread of 4.6% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-13 | 43 | $558.30 | $24,006.9 |
| 2026-05-07 | 2,098 | $559.60 | $1.2M |
| 2026-04-29 | 13 | $577.82 | $7,511.66 |
| 2026-04-17 | 37 | $672.77 | $24,892.49 |
| 2026-03-26 | 4,841 | $691.21 | $3.3M |
| 2026-03-25 | 13 | $682.16 | $8,868.08 |
| 2026-03-12 | 11 | $733.18 | $8,064.98 |
| 2026-02-12 | 791 | $678.83 | $536,954.53 |
| 2026-01-22 | 1,306 | $664.16 | $867,392.96 |
| 2026-01-15 | 10 | $653.14 | $6,531.4 |
| 2026-01-13 | 18,740 | $629.32 | $11.8M |
| 2026-01-12 | 30,742 | $618.82 | $19.0M |
| 2026-01-08 | 6,237 | $577.01 | $3.6M |
| 2025-12-22 | 1,238 | $568.46 | $703,753.48 |
| 2025-12-11 | 70 | $555.36 | $38,875.2 |
| 2025-11-28 | 391 | $567.11 | $221,740.01 |
| 2025-11-03 | 2 | $583.45 | $1,166.9 |
| 2025-10-27 | 55 | $605.58 | $33,306.9 |
| 2025-10-24 | 3,410 | $605.74 | $2.1M |
| 2025-10-22 | 1 | $599.35 | $599.35 |
| 2025-10-15 | 56 | $626.93 | $35,108.08 |
| 2025-10-10 | 1,867 | $635.01 | $1.2M |
| 2025-10-08 | 36 | $621.63 | $22,378.68 |
| 2025-10-07 | 1 | $618.52 | $618.52 |
| 2025-10-02 | 1,905 | $605.42 | $1.2M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| RTX | 0.563 | 0.577 | Moderate |
| LHX | 0.518 | 0.635 | Moderate |
| GD | 0.425 | 0.594 | Moderate |
| HII | 0.423 | 0.511 | Moderate |
| LMT | 0.380 | 0.732 | Moderate |
| HXL | 0.282 | 0.272 | Low correlation |
| KTOS | 0.262 | 0.401 | Low correlation |
| WM | 0.252 | 0.323 | Low correlation |
| LDOS | 0.245 | 0.386 | Low correlation |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare NOC to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.