CluenexNorthrop Grumman NOC
Northrop Grumman scores weak on business quality (4.5 of 10). Here is why, in plain words, and what our sealed record shows.
Why it matters
- What Northrop Grumman does
Northrop Grumman builds defense technology, aerospace systems, and mission payloads for government agencies, primarily the US Department of Defense. It makes money through long-term defense procurement contracts for military aircraft, space systems, and weapons.
- What it does best
Northrop excels at building classified, high-end aerospace and defense hardware that few rivals can replicate. Its gross margin of 20.1% trails peer HWM at 36.0%, but its deep integration into critical national security programs creates massive switching costs for the Pentagon.
- The main risk
The primary threat is program execution and fixed-price contract overruns in complex defense development. If technical hurdles stall major aerospace programs, margins face immediate compression from absorbed cost overruns.
Quality, check by check
Scored against its own industry, from company filings.
Operating margin stands at 10.7% with a return on equity of 26.6%, reflecting efficient use of shareholder capital. Profitability is stable, though it does not dramatically expand as revenue scales due to heavy development costs.
The moat rests on regulatory barriers and government switching costs protecting its defense contracts. Its gross margin sits in the 13th sector percentile, showing that competitive pressures in defense procurement limit pricing power.
Revenue grew 2.2% to $42.9 billion, maintaining a steady multi-year expansion from $36.6 billion in 2022. Growth is moving at a modest pace compared to broader industrials, sitting in the 34th percentile for sector revenue growth.
Total debt sits at $15.7 billion against $4.4 billion in cash, supported by an interest coverage ratio of 7.0x where earnings comfortably cover debt servicing. Free cash flow reached $3.6B, getting stronger.
Insiders
Executives and directors, from SEC Form 4 filings we read ourselves. Open market trades only; grants, option exercises and pre-planned sales left out.
No open market buys or unplanned sales by executives or directors.
Our sealed record on NOC
Verdicts appear here 30 days after we publish them; members see today's. Each one is in the nightly ledger, fingerprinted the night it was made.
The first sealed verdicts appear here on Oct 11, 2026.
Questions
Northrop Grumman scores weak on the Cluenex quality check (4.5 of 10), measured against its own industry. Profitability is weak, moat fair, growth slow and financial health fair.
In the last 90 days of SEC Form 4 filings: No open market buys or unplanned sales by executives or directors.
Oct 20, 2026, before the open.
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Cite this page: Cluenex, “Northrop Grumman (NOC)”, https://cluenex.com/stocks/noc/, data as of Oct 10, 2026.