• If you are wondering whether Huntington Ingalls Industries at around US$314 per share offers good value today, it helps to separate the headline moves from what the fundamentals may be saying.
• The stock has pulled back with a 13.6% decline over the last 7 days and a 21.8% decline over the last 30 days, even though the 1 year return sits at 37.6% and the 3 year and 5 year returns are 70.6% and 63.2% respectively.
• Recent attention on defense and shipbuilding contractors, together with ongoing discussion around government spending priorities and contract pipelines, has kept Huntington Ingalls Industries on many investors' watchlists. These themes often influence how investors assess long term revenue visibility and risk for large defense contractors.
• On a simple checklist of six valuation tests, Huntington Ingalls Industries scores a full 6 out of 6. This sets up a closer look at how different valuation methods line up on the stock and hints at an even richer way to think about valuation that will be covered at the end of this article.

Approach 1: Huntington Ingalls Industries Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes projected future cash flows and discounts them back to today to estimate what the stock might be worth now.

For Huntington Ingalls Industries, the latest twelve month Free Cash Flow is about $810.1 million. Analysts and model estimates project Free Cash Flow out over the next decade, with a forecast of $867.5 million by 2030. Estimates for 2026 to 2035, based on analyst inputs and extrapolations, are discounted back to today using a 2 Stage Free Cash Flow to Equity approach.

Putting those projections together gives an estimated intrinsic value of about $428.62 per share. Compared with a current share price of around $314, this DCF suggests the stock is trading at a 26.6% discount. On this model, Huntington Ingalls Industries appears undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Huntington Ingalls Industries is undervalued by 26.6%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Approach 2: Huntington Ingalls Industries Price vs Earnings

For a profitable company, the P/E ratio is a useful way to think about what you are paying for each dollar of current earnings. It ties the share price directly to the bottom line and is widely used for established, earnings generating businesses.

What counts as a “normal” P/E depends a lot on how fast earnings are expected to grow and how risky those earnings are perceived to be. Higher growth and lower perceived risk usually support a higher P/E, while lower growth and higher perceived risk tend to justify a lower P/E.

Huntington Ingalls Industries trades on a P/E of 20.50x. This compares with an Aerospace & Defense industry average P/E of 37.26x and a peer group average of 38.37x. Simply Wall St’s Fair Ratio framework estimates a P/E of 28.21x as more in line with the company’s characteristics, including its earnings profile, industry, profit margins, market value and key risks.

This Fair Ratio can be more informative than a simple peer or industry comparison because it adjusts for company specific factors rather than assuming all stocks in the sector deserve similar multiples. With the actual P/E of 20.50x below the Fair Ratio of 28.21x, the stock screens as trading below that implied level.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Huntington Ingalls Industries Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced here as a simple way for you to attach a clear story about Huntington Ingalls Industries to the numbers you see. This links your view of its future revenue, earnings and margins to a Fair Value that you can compare with the current price on Simply Wall St's Community page. On that page, Narratives are updated automatically when fresh news or earnings arrive, and different investors can hold very different stories. For example, one Narrative might line up with a higher Fair Value near US$465 tied to expectations around defense demand, throughput and margins, while another might sit closer to a lower Fair Value near US$329 that leans on concerns about labor costs, contract risk and budget pressure.

Do you think there's more to the story for Huntington Ingalls Industries? Head over to our Community to see what others are saying!

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.