Huntington Ingalls Industries (HII) has wrapped up FY 2025 with fourth quarter revenue of US$3.5b, basic EPS of US$4.05, and net income of US$159m, putting a clear set of numbers on the table for investors to weigh. The company has seen quarterly revenue move from US$3.0b and EPS of US$3.15 in Q4 2024 to US$3.5b and EPS of US$4.05 in Q4 2025. Trailing twelve month EPS stands at US$15.39 on revenue of US$12.5b, setting up a results season where the story is firmly about how stable margins and earnings power shape expectations from here.

With the headline figures established, the next step is to see how these earnings and margin trends line up with the most widely followed narratives around HII's growth, risks, and long term profitability profile.

Trailing EPS Power Around US$15.39

• On a trailing twelve month basis, HII earned US$15.39 per share from US$12.5b in revenue and US$605m in net income, giving you a sense of the earnings power that sits behind the single quarter headline.
• What stands out for a more bullish read is that the one year earnings growth figure of around 10% sits against a five year pattern where earnings declined by about 2.1% per year, which
  • supports the idea that recent execution looks stronger than the longer term trend suggests, with quarterly EPS in FY 2025 staying in a tight band between roughly US$3.69 and US$4.05, and
  • raises a clear question for bulls about whether the forecast 10.8% annual earnings growth will hold up against that softer five year backdrop.

4.8% Net Margin and US$605m TTM Profit

• Across the last twelve months, HII reported a 4.8% net profit margin on US$12.5b of revenue, converting that into US$605m of net income, which matches the 4.8% margin indicated for the prior trailing period.
• Critics who take a more cautious stance often point to the five year average earnings decline of about 2.1% per year, and that concern is still present here because
  • the current 4.8% margin and US$605m of trailing net income sit close to the prior year trailing figures of US$11.5b revenue and US$550m net income, so profitability has not broken decisively away from its past range, and
  • forecast revenue growth of around 4.4% per year and expected earnings growth of 10.8% per year both sit below the US market forecasts provided, which gives bears a concrete data point when they argue that growth expectations are more muted.

P/E of 25.8x and DCF Fair Value Gap

• HII is shown trading on a trailing P/E of 25.8x versus peer and Aerospace & Defense industry averages around 40x, and the supplied DCF fair value of about US$486.63 sits above the current share price of US$397.77, implying the shares are roughly 18.3% below that DCF fair value marker.
• For investors weighing a more optimistic angle, this combination of a lower P/E than peers and a 1.39% dividend yield heavily supports the bullish case that valuation is not stretched, yet
  • the same data also reminds you that revenue growth is forecast at 4.4% per year and expected earnings growth at 10.8% per year, both below the US market forecasts in the inputs, which keeps a cap on how aggressive that bullish view can reasonably be, and
  • the current price of US$397.77 sits above the single analyst price target of US$385.20 mentioned in the instructions, so anyone focusing mainly on that target rather than the DCF fair value will read the valuation picture differently.

Bulls argue these margins and valuation gaps could be the early chapter of a longer rerating story, so it may be worth seeing how that thesis is laid out in detail in the 📊 Read the full Huntington Ingalls Industries Consensus Narrative.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Huntington Ingalls Industries's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

HII's forecast revenue and earnings growth sitting below the US market forecasts, alongside margins that remain within a familiar range, may leave growth focused investors wanting more.

If slower growth expectations are your main concern, you might want to quickly scan 53 high quality undervalued stocks right now to find companies where current pricing looks more appealing relative to their potential.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.