L3Harris Technologies, Inc.
L3Harris Technologies, Inc. Fundamental Analysis
L3Harris Technologies, Inc. (LHX) shows weak financial fundamentals with a PE ratio of 41.37, profit margin of 7.35%, and ROE of 8.28%. The company generates $21.9B in annual revenue with moderate year-over-year growth of 9.82%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 59.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze LHX's fundamental strength across five key dimensions:
Efficiency Score
WeakLHX struggles to generate sufficient returns from assets.
Valuation Score
ModerateLHX shows balanced valuation metrics.
Growth Score
ExcellentLHX delivers strong and consistent growth momentum.
Financial Health Score
ExcellentLHX maintains a strong and stable balance sheet.
Profitability Score
WeakLHX struggles to sustain strong margins.
Key Financial Metrics
Is LHX Expensive or Cheap?
P/E Ratio
LHX trades at 41.37 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, LHX's PEG of -4.96 indicates potential undervaluation.
Price to Book
The market values L3Harris Technologies, Inc. at 3.38 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 15.97 times EBITDA. This signals the market has high growth expectations.
How Well Does LHX Make Money?
Net Profit Margin
For every $100 in sales, L3Harris Technologies, Inc. keeps $7.35 as profit after all expenses.
Operating Margin
Core operations generate 9.87 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $8.28 in profit for every $100 of shareholder equity.
ROA
L3Harris Technologies, Inc. generates $3.90 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
L3Harris Technologies, Inc. produces operating cash flow of $3.11B, showing steady but balanced cash generation.
Free Cash Flow
L3Harris Technologies, Inc. generates strong free cash flow of $2.68B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $14.34 in free cash annually.
FCF Yield
LHX converts 4.02% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
41.37
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.96
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.38
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.04
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.53
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.19
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.08
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How LHX Stacks Against Its Sector Peers
| Metric | LHX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 41.37 | 26.49 | Worse (Expensive) |
| ROE | 8.28% | 1307.00% | Weak |
| Net Margin | 7.35% | -5131.00% (disorted) | Weak |
| Debt/Equity | 0.53 | 0.81 | Strong (Low Leverage) |
| Current Ratio | 1.19 | 10.48 | Neutral |
| ROA | 3.90% | -1549793.00% (disorted) | Weak |
LHX outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews L3Harris Technologies, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
34.15%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
6.48%
Industry Style: Cyclical, Value, Infrastructure
GrowingFCF CAGR
217.61%
Industry Style: Cyclical, Value, Infrastructure
High Growth