AI Stock Analysis: Is LHX a Smart Buy right now?

July 15, 7:22 am

L3Harris Technologies, Inc. is an American technology company, defense contractor, and information technology services provider that produces C6ISR systems and products. It was formed through the merger of L3 Technologies and Harris Corporation in 2019. L3Harris operates in four business segments: Integrated Mission Systems, Space and Airborne Systems, Communication Systems, and Aviation Systems. The company serves a wide range of customers including the U.S. Department of Defense, foreign military, and commercial clients.

Price & AI Score for LHX.

Fundamental Analysis

The latest revenue for L3Harris Technologies stands at $5.04 billion for the last quarter. This represents a decrease of 2.59% compared to the previous quarter, which might be a reason for concern. However, the revenue has increased by 15.24% year-over-year, indicating solid growth on an annual basis.

The net income for the last quarter was $283 million, marking a significant increase of 79.11% compared to the previous quarter, signalling strong growth. Nevertheless, the net income has decreased by 16.02% when observed year-over-year, which could be troubling. EBITDA for the last quarter was $595 million, a striking decrease of 84.83% from the previous quarter, but an impressive increase of 191.96% compared to the same quarter last year.

The Price-Earnings (P/E) ratio is currently high at 37.45, which can potentially indicate that the stock is overvalued. The high P/E ratio might suggest a bearish outlook from a valuation perspective. Furthermore, the fact that there have been a couple of company insiders selling their stock recently can also be considered a bearish signal.

Technical Analysis

Today's stock price of L3Harris Technologies is $233.11. This marks an increase of 7.19% compared to a month ago, indicating a positive short-term trend. Over the span of a year, the stock has surged by 21.90%, displaying a positive long-term trend. The trend appears to be bullish at the moment.

The Simple Moving Average (SMA) for the last 10 days (SMA10) is 228.39, which is higher than the previous SMA10 of 227.49. This trend indicates a potential upward movement in the price. The Relative Strength Index (RSI) is neutral at 43.3, suggesting that the stock is neither overbought nor oversold.

Alternative Data Analysis

From an alternative data perspective, job postings and employee sentiment at L3Harris Technologies provide a mixed view. The company currently has 1,050 open positions, a 32% increase over the last couple of months, indicating potential growth and expansion, which is a healthy sign. The business outlook among employees, however, remains neutral.

On the customer acquisition front, L3Harris Technologies has an estimated 460,000 webpage visitors, a decrease of 21% in recent months, suggesting a worrisome trend and potentially a loss of customers. For customer engagement, the social media presence of L3Harris shows 35,000 followers on Instagram and 23,000 followers on Twitter, with no significant increase or decrease over the last couple of months.

According to AltIndex's AI score, L3Harris Technologies has a score of 62. This score, which encapsulates fundamental, technical, and alternative data analysis, provides a "buy" signal, indicating a positive sentiment regarding the company's stock price trajectory.

Conclusion and Recommendation

Overall, L3Harris Technologies presents a complex picture for potential investors. While there are some positive indicators such as the year-over-year revenue and EBITDA growth, and the positive stock price trends, there are also notable concerns including the quarterly decrease in revenue, the high P/E ratio, insider stock selling, and the decrease in website visitors.

Given the mixed signals, but leaning towards growth potential, the stock appears to be cautiously optimistic. With the AI score of 62 suggesting a buy, my recommendation would lean towards a "buy" for the long-term investor, while advising to keep a close watch on the indicators for any negative shifts. Short-term investors may want to tread carefully given the potential overvaluation and recent insider sales.

Disclaimer: This article, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current. Visit LHX AI Stock Analysis for a more up-to-date analysis.

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