Important note

This AI stock analysis for Northrop Grumman is not up to date. Creating and accessing our AI stock Analysis (powered by our data and Chat GPT) is only available for our premium users. Sign up to get access today!

Northrop Grumman - AI Stock Analysis

Analysis generated October 27, 2024

Northrop Grumman Corporation is a prominent American global aerospace and defense technology company. With a legacy of innovation and reliability, Northrop Grumman is involved in various segments such as aerospace systems, mission systems, and technology services, providing critical solutions in both defense and commercial sectors. The company's products and services are crucial in areas like missile defense, cyber security, and unmanned systems, making them a vital player in national and international defense landscapes.

Fundamental Analysis

In the most recent quarter, Northrop Grumman reported a revenue of $10 billion. This revenue showcases a decrease of 2.17% from the previous quarter, signaling a slight downturn that could be a cause for concern. However, the revenue indicates a year-over-year growth of 2.26%, demonstrating steady long-term growth.

The net income for the last quarter was $1.03 billion, which marks a significant increase of 9.15% compared to the previous quarter and a 9.50% year-over-year growth. This rise in net income is a strong indicator of the company’s profitability and effective cost management.

On the contrary, the EBITDA was reported to be $0 for the last quarter, representing a complete wipeout compared to both the previous quarter and the same quarter last year. This is a major red flag and could point towards concerns in operational efficiencies or extraordinary expenses.

The current price-to-earnings (P/E) ratio is 32.26, which can be considered high, indicating potential overvaluation. With such a high P/E ratio, investors might view the stock with a bearish outlook.

Additionally, recent insider selling activity could be sending a negative signal about the confidence of those closest to the company's operations in its future performance.

Technical Analysis

Northrop Grumman's current stock price stands at $519.35. This represents a decrease of 1.41% compared to a month ago, which could be seen as unfavorable in the short run. Conversely, compared to a year ago, the stock price has increased by 11.59%, suggesting a favorable long-term trend.

Despite this long-term gain, the trend presently appears bearish. The current Simple Moving Average (SMA10) is 524.04, slightly down from the previous SMA10 of 524.90. Such movement in the SMA indicates a potential downward trend in stock price.

The Relative Strength Index (RSI) stands at 36.7, which is a neutral condition. Typically, an RSI below 30 would indicate an oversold condition, and above 70 would indicate an overbought condition.

Alternative Data Analysis

In recent weeks, Northrop Grumman has shown promising signs in several alternative data metrics. The company currently has 1,716 open positions, reflecting a 23% increase over the last couple of months. This growth in job postings could imply expansion and positive future business operations.

Employee sentiment about the company remains neutral, indicating no extreme views which is neither particularly bullish nor bearish.

Customer acquisition appears to be on an upward trend with approximately 880,000 visitors to Northrop Grumman’s webpage, an increase of 14% recently. This web traffic growth could signify increasing interest and potentially higher future revenue from new contracts or partnerships.

Customer engagement on social media is also noteworthy. The company has 320,000 Instagram followers, up by 4% in the last few months. On Twitter, they maintain 310,000 followers with no significant change recently. The overall engagement suggests a steady or growing interest in the company's activities.

Additionally, AltIndex’s AI score for Northrop Grumman is 61, which indicates a buy signal based on a comprehensive analysis of fundamental, technical, and alternative data.

Conclusion and Recommendation

Considering the fundamental, technical, and alternative data analysis, Northrop Grumman presents a mixed outlook. The positive aspects include steady year-over-year revenue growth, a significant increase in net income, and rising customer engagement. Moreover, the expansion in job postings suggests future growth prospects.

However, the current high P/E ratio indicates potential overvaluation, and the technical indicators suggest a short-term bearish trend. The EBITDA figure also raises some concerns about operational efficiency.

Given the AI score of 61 which suggests a buy signal and considering the upward year-over-year trends in revenue and net income, a cautious buy recommendation may be justified. Investors should stay alert to short-term volatility and monitor the insiders' activities closely. Long-term prospects appear solid, but the stock's current valuation and short-term trend warrant attention.

Disclaimer: This AI stock analysis, 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.