LOCKHEED MARTIN CORP (LMT) Stock Analysis
LOCKHEED MARTIN CORP (LMT) Stock Analysis
Analysis from 10-Q filed 2025-10-21. Data as of Q4 2025.
Overall Grade: F (Concerning)
LOCKHEED MARTIN CORP faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 23.6% | Above industry average |
| FCF Margin | 9.2% | Healthy cash flow |
| Debt/Equity | 3.2x | Elevated debt |
Investment Thesis: Strong return on invested capital of 23.6% suggests durable competitive advantages and efficient capital allocation.
Explore LOCKHEED MARTIN CORP: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: LOCKHEED MARTIN CORP earns 23.6% ROIC, Top 10% in Industrials
LOCKHEED MARTIN CORP's trailing-twelve-month ROIC of 23.6% ranks Top 10% in Industrials companies (sector median: 7.3%), driven by NOPAT margin of 8.7% combined with asset turnover of 1.3x. Source: 10-Q filed 2025-10-21. Gross margin of 10.2% with operating margin at 10.3% reflects a competitive pricing environment.
| Metric | LMT | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 23.6% | Excellent | Above sector median of 7.3% |
| Return on Equity (ROE) | 81.2% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 10.2% | Warning | Competitive pricing environment |
| Operating Margin | 10.3% | Good | Moderate operational efficiency |
Cash Flow: LOCKHEED MARTIN CORP generates $6.9B FCF at 9.2% margin, positive NaN/8 quarters
LOCKHEED MARTIN CORP generated $6.9B in free cash flow (TTM), a 9.2% FCF margin, a margin that ranks Top 50% in Industrials. Operating cash flow exceeds net income by 1.7x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-21.
| Metric | LMT | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 9.2% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $6.9B | Good | Positive cash generation |
| OCF/Net Income | 1.7x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: LOCKHEED MARTIN CORP at 3.2x leverage
LOCKHEED MARTIN CORP's debt-to-equity ratio of 3.2x reflects high leverage. Total debt of $21.7B offset by $4.1B in cash. Source: 10-Q filed 2025-10-21.
| Metric | LMT | Rating | Context |
|---|---|---|---|
| Debt to Equity | 3.2x | Red flag | Elevated leverage |
| Net Cash Position | $-17.6B | Warning | Net debt position |
Valuation: LOCKHEED MARTIN CORP trades at 22.4x earnings
LOCKHEED MARTIN CORP trades at a P/E of 22.4x. Free cash flow yield of 6.1% offers attractive cash returns relative to price.
| Metric | LMT | Rating | Context |
|---|---|---|---|
| P/E Ratio | 22.4x | Adequate | Premium valuation |
| EV/Sales | 1.8x | Excellent | Attractive revenue multiple |
| FCF Yield | 6.1% | Good | Attractive cash return |
| Dividend Yield | 2.8% | Adequate | Growth focus over income |
Capital Allocation: LOCKHEED MARTIN CORP returns 5.4% shareholder yield
LOCKHEED MARTIN CORP's total shareholder yield is 5.4% (dividends 2.8% + buybacks 2.7%). Source: 10-Q filed 2025-10-21.
| Metric | LMT | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 5.4% | Good | Dividend + buyback yield combined |
| Buyback Yield | 2.7% | Adequate | Active share repurchases |
| Total Capital Returned (TTM) | $6.1B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 23.6% | Top 10% | 3.2x above |
| Free Cash Flow Margin | 9.2% | Top 50% | 1.9x above |
| Gross Margin | 10.2% | Bottom 25% | 0.3x below |
| Operating Margin | 10.3% | Top 50% | 1.4x above |
| Return on Equity (ROE) | 81.2% | Top 5% | 9.5x above |
| P/E Ratio | 22.4x | N/A | - |
Financial Scorecard
| Metric | LMT | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 23.6% | Excellent | Top 10% of sector (median: 7.3%) |
| Free Cash Flow Margin | 9.2% | Adequate | Top 50% of sector (median: 4.7%) |
| Gross Margin | 10.2% | Warning | Bottom 25% of sector (median: 33.1%) |
| Debt to Equity Ratio | 322.9% | Red flag | High financial leverage |
| P/E Ratio (Price-to-Earnings) | 22.4x | Adequate | Fair value |
| Free Cash Flow Yield | 6.1% | Good | Solid cash yield |
Frequently Asked Questions
Q: What is LOCKHEED MARTIN CORP's Return on Invested Capital (ROIC)?
LOCKHEED MARTIN CORP (LMT) has a trailing twelve-month Return on Invested Capital (ROIC) of 23.6%. This compares above the sector median of 7.3%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is LOCKHEED MARTIN CORP's Free Cash Flow Margin?
LOCKHEED MARTIN CORP (LMT) has a free cash flow margin of 9.2%, generating $6.9 billion in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is LOCKHEED MARTIN CORP stock overvalued or undervalued?
LOCKHEED MARTIN CORP (LMT) trades at a P/E ratio of 22.4x, which is above the sector median of N/A. The EV/Sales multiple is 1.8x. Free cash flow yield is 6.1%, which represents an attractive cash return to investors.
Q: Does LOCKHEED MARTIN CORP pay a dividend?
LOCKHEED MARTIN CORP (LMT) currently pays a dividend yield of 2.8%. Including share buybacks, the total shareholder yield is 5.4%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: How much debt does LOCKHEED MARTIN CORP have?
LOCKHEED MARTIN CORP (LMT) has a debt-to-equity ratio of 3.2x with total debt of $21.7 billion. Net debt position is $17.6 billion.
Q: What is LOCKHEED MARTIN CORP's revenue and earnings growth?
LOCKHEED MARTIN CORP (LMT) grew revenue by 5.6% year-over-year. Earnings per share decreased by 3.6% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is LOCKHEED MARTIN CORP buying back stock?
LOCKHEED MARTIN CORP (LMT) repurchased $3.0 billion of stock over the trailing twelve months. This represents a buyback yield of 2.7%.
Q: How does LOCKHEED MARTIN CORP compare to competitors in Industrials?
Compared to other companies in Industrials, LOCKHEED MARTIN CORP (LMT) shows: ROIC of 23.6% is above the sector median of 7.3% (Top 7%). FCF margin of 9.2% exceeds the sector median of 4.7% (Top 31% of sector). Gross margin at 10.2% is 22.9 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Industrials companies with available SEC filings.
Q: What warning signs should I watch for with LOCKHEED MARTIN CORP?
Investors in LOCKHEED MARTIN CORP (LMT) should monitor these potential warning signs: 1) Debt-to-equity of 3.2x is elevated. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-21. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.