Lockheed Martin Corporation ranks near the peer group median, with strong profitability and valuation offset by weak growth. Trend conditions have deteriorated, without yet reaching an extreme downside state. Price behavior is partially reflecting the structural picture, with a moderate gap remaining.
Peer-relative scores, weakest to strongest
Lockheed Martin is a leading U.S. defense contractor specializing in advanced aerospace, missile systems, and security technologies. The company serves government and commercial clients worldwide.
Lockheed Martin screens cheap on a sector-relative basis, with a ROIC of 23.47% and revenue growth of 9.1% YoY, but the valuation sits near the sector median—indicating a discount not fully explained by business fundamentals. Capital efficiency and profitability are among the highest in the industry, yet the market has not assigned a premium multiple. Internally, the company’s operating margin of 9.0% is solid versus peers, and net income remains stable at €5.0bn, supporting the quality assessment. The stability score of 59/100 places Lockheed Martin in the mid-pack for risk, without indicating a confidence break. The record $194bn backlog and Q4 2025 sales of $20.3bn provide evidence of multi-year revenue visibility and operational momentum. This backlog appears solid but has not led to a rerating as market focus remains on converting orders into sustained margin expansion. Externally, the record backlog and ongoing investments in AI and missile production support the execution story. Analyst support and sector tailwinds from rising defense budgets partly offset valuation inertia, but the market is waiting for backlog conversion and margin durability before rerating the stock. Recent data supports the quality assessment but does not yet prompt a valuation shift. Compared to peers, Lockheed Martin’s profitability and growth are above sector averages, but its valuation is not at a premium—making it a quality leader whose strengths are only moderately recognized by the market. This pattern is partly driven by factors specific to Lockheed Martin, such as its scale and innovation pipeline, but the discount is not among the sharpest in the sector. A more constructive assessment would require sustained backlog conversion into higher margins and continued ROIC above 20%. Supporting improvement would include greater margin stability. Until then, Lockheed Martin appears as a discount case where quality is not yet fully rewarded.
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This analysis is rule-based and descriptive. Peer-relative scores are derived from functional peer group comparisons using publicly available financial data. Scores reflect structural positioning only and do not constitute investment advice, a buy or sell recommendation, or a forecast of future performance. AssetNext peer scores are recalculated periodically as new data becomes available.
AssetNext scores reflect each company's structural position within its functional peer group — not a ranking against all stocks simultaneously. Peers are identified by similarity across eight financial dimensions, including revenue growth trajectory, margin structure, capital intensity, and earnings stability. A score of 75 means the company ranks in the top quartile within its own peer group, not the entire market.
Four dimension scores drive the overall peer score: Growth (revenue trajectory and expansion dynamics), Quality (margin structure and capital efficiency), Valuation (peer-relative pricing on standard multiples), and Stability (earnings consistency and financial predictability). Each dimension is scored 0–100 relative to the peer group, then combined into an overall peer score using equal weighting.
Because scores are peer-relative, the same company can have slightly different scores in different index universes. On comparison pages, both companies are shown within their shared peer universe wherever possible — so the scores are directly comparable. The peer basis is stated on each score card.
Scores are recalculated periodically as underlying financial data is updated. All analysis is descriptive and rule-based — AssetNext describes structural realities and never issues buy, sell or hold recommendations.