Price to Sales (P/S)
since 2005
Calculation
Northrop Grumman Corp., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Sales1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Jan 26, 2023 | 1.85 | = | 443.47 | ÷ | 239.15 | 239.15 | = | 36,602 | ÷ | 153,053,371 | |
| Jan 27, 2022 | 1.64 | = | 373.99 | ÷ | 228.49 | 228.49 | = | 35,667 | ÷ | 156,101,934 | |
| Jan 28, 2021 | 1.33 | = | 293.03 | ÷ | 220.73 | 220.73 | = | 36,799 | ÷ | 166,718,384 | |
| Jan 30, 2020 | 1.91 | = | 384.87 | ÷ | 201.87 | 201.87 | = | 33,841 | ÷ | 167,637,130 | |
| Jan 31, 2019 | 1.55 | = | 275.55 | ÷ | 177.30 | 177.30 | = | 30,095 | ÷ | 169,737,507 | |
| Jan 29, 2018 | 2.28 | = | 338.34 | ÷ | 148.22 | 148.22 | = | 25,803 | ÷ | 174,087,585 | |
| Jan 30, 2017 | 1.63 | = | 229.48 | ÷ | 140.37 | 140.37 | = | 24,508 | ÷ | 174,599,406 | |
| Feb 1, 2016 | 1.45 | = | 188.64 | ÷ | 130.02 | 130.02 | = | 23,526 | ÷ | 180,943,220 | |
| Feb 2, 2015 | 1.32 | = | 159.19 | ÷ | 120.86 | 120.86 | = | 23,979 | ÷ | 198,405,799 | |
| Feb 3, 2014 | 1.00 | = | 113.25 | ÷ | 113.78 | 113.78 | = | 24,661 | ÷ | 216,737,248 | |
| Feb 5, 2013 | 0.61 | = | 64.88 | ÷ | 106.35 | 106.35 | = | 25,218 | ÷ | 237,126,501 | |
| Feb 8, 2012 | 0.58 | = | 60.50 | ÷ | 104.55 | 104.55 | = | 26,412 | ÷ | 252,631,776 | |
| Feb 9, 2011 | 0.60 | = | 71.87 | ÷ | 119.31 | 119.31 | = | 34,757 | ÷ | 291,312,990 | |
| Feb 9, 2010 | 0.53 | = | 59.55 | ÷ | 111.49 | 111.49 | = | 33,755 | ÷ | 302,771,417 | |
| Feb 10, 2009 | 0.43 | = | 44.54 | ÷ | 103.57 | 103.57 | = | 33,887 | ÷ | 327,180,490 | |
| Feb 20, 2008 | 0.85 | = | 81.00 | ÷ | 94.75 | 94.75 | = | 32,018 | ÷ | 337,919,384 | |
| Feb 21, 2007 | 0.87 | = | 75.29 | ÷ | 86.07 | 86.07 | = | 30,148 | ÷ | 350,262,436 | |
| Feb 17, 2006 | 0.75 | = | 65.71 | ÷ | 87.60 | 87.60 | = | 30,721 | ÷ | 350,705,853 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Northrop Grumman Corp. Annual Report.
The financial data reveals a significant expansion in valuation multiples over the analyzed period, characterized by a transition from a low P/S environment in the late 2000s to a higher valuation regime starting in 2014.
- Price to Sales (P/S) Ratio Analysis
- The P/S ratio exhibited substantial volatility, reaching a minimum of 0.43 in 2009. Following this trough, a gradual recovery occurred between 2010 and 2013, with the ratio stabilizing between 0.53 and 0.61.
- A distinct shift in valuation occurred in 2014, as the P/S ratio rose to 1.00 and continued a steep upward trajectory to peak at 2.28 in 2018. This represents a significant increase in the market's valuation of each dollar of revenue generated.
- From 2019 to 2023, the ratio remained elevated relative to historical norms, fluctuating between 1.33 and 1.91, ending the period at 1.85.
- Revenue and Share Price Dynamics
- Sales per share demonstrated a consistent and steady upward trend, growing from 87.60 in 2006 to 239.15 by 2023, indicating sustained growth in top-line efficiency per share.
- The share price showed more aggressive growth patterns, particularly after 2014. The acceleration of the share price from 113.25 in 2014 to 443.47 in 2023 outpaced the growth in sales per share, which serves as the primary driver for the expansion of the P/S ratio.
Overall, the data indicates that while revenue growth has been linear and stable, the market's valuation of that revenue has expanded considerably, suggesting an increase in investor confidence or a shift in the company's perceived risk and growth profile over the last two decades.
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Comparison to Competitors
Northrop Grumman Corp., P/S, long-term trends, comparison to competitors
| Northrop Grumman Corp. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Jan 26, 2023 | 1.85 | 1.90 | 2.27 | 3.31 | 1.20 | 3.78 | 1.78 | 2.14 |
| Jan 27, 2022 | 1.64 | 1.87 | 2.26 | 3.03 | 1.50 | 3.73 | 1.57 | 2.21 |
| Jan 28, 2021 | 1.33 | 1.96 | 2.83 | 2.96 | 1.41 | 4.34 | 1.40 | 1.95 |
| Jan 30, 2020 | 1.91 | 2.34 | 1.48 | 1.87 | 1.18 | 3.51 | 2.07 | 1.75 |
| Jan 31, 2019 | 1.55 | 2.26 | 1.47 | 1.58 | 0.82 | 2.59 | 1.58 | 1.56 |
| Jan 29, 2018 | 2.28 | 2.17 | 2.24 | 1.74 | 1.11 | 2.74 | 1.91 | 1.67 |
| Jan 30, 2017 | 1.63 | 1.06 | 1.62 | 1.65 | 2.39 | 2.36 | 1.59 | 1.55 |
| Feb 1, 2016 | 1.45 | 0.80 | 0.86 | 1.25 | 2.59 | 2.06 | 1.43 | 1.26 |
| Feb 2, 2015 | 1.32 | 1.15 | 0.99 | 1.49 | 2.45 | 2.03 | 1.34 | 1.67 |
| Feb 3, 2014 | 1.00 | 1.12 | 1.17 | 1.63 | 2.54 | 1.90 | 1.15 | 1.60 |
| Feb 5, 2013 | 0.61 | 0.70 | 0.99 | 1.79 | 2.39 | 1.46 | 0.60 | 1.43 |
| Feb 8, 2012 | 0.58 | 0.82 | 1.30 | 1.08 | 2.15 | 1.28 | 0.62 | 1.31 |
| Feb 9, 2011 | 0.60 | 0.83 | 1.63 | 1.33 | 2.20 | 1.36 | 0.61 | 1.44 |
| Feb 9, 2010 | 0.53 | 0.64 | 1.23 | 0.95 | 1.66 | 0.94 | 0.64 | 1.19 |
| Feb 10, 2009 | 0.43 | 0.51 | 0.33 | 0.39 | 1.02 | 0.66 | 0.64 | 0.77 |
| Feb 20, 2008 | 0.85 | 0.98 | 1.06 | 0.91 | 3.45 | 1.21 | 1.03 | 1.30 |
| Feb 21, 2007 | 0.87 | 1.17 | 1.12 | 0.96 | 3.54 | 1.22 | 1.08 | 1.44 |
| Feb 17, 2006 | 0.75 | 1.06 | 1.44 | 0.93 | 3.72 | 1.24 | 0.86 | 1.36 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Northrop Grumman Corp., P/S, long-term trends, comparison to sector (capital goods)
| Northrop Grumman Corp. | Capital Goods | |
|---|---|---|
| Jan 26, 2023 | 1.85 | 2.09 |
| Jan 27, 2022 | 1.64 | 2.09 |
| Jan 28, 2021 | 1.33 | 2.11 |
| Jan 30, 2020 | 1.91 | 1.92 |
| Jan 31, 2019 | 1.55 | 1.62 |
| Jan 29, 2018 | 2.28 | 1.82 |
| Jan 30, 2017 | 1.63 | 1.76 |
| Feb 1, 2016 | 1.45 | 1.55 |
| Feb 2, 2015 | 1.32 | 1.66 |
| Feb 3, 2014 | 1.00 | 1.66 |
| Feb 5, 2013 | 0.61 | 1.37 |
| Feb 8, 2012 | 0.58 | 1.33 |
| Feb 9, 2011 | 0.60 | 1.45 |
| Feb 9, 2010 | 0.53 | 1.12 |
| Feb 10, 2009 | 0.43 | 0.71 |
| Feb 20, 2008 | 0.85 | 1.76 |
| Feb 21, 2007 | 0.87 | 1.91 |
| Feb 17, 2006 | 0.75 | 1.95 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Northrop Grumman Corp., P/S, long-term trends, comparison to industry (industrials)
| Northrop Grumman Corp. | Industrials | |
|---|---|---|
| Jan 26, 2023 | 1.85 | 1.80 |
| Jan 27, 2022 | 1.64 | 2.07 |
| Jan 28, 2021 | 1.33 | 2.14 |
| Jan 30, 2020 | 1.91 | 1.77 |
| Jan 31, 2019 | 1.55 | 1.58 |
| Jan 29, 2018 | 2.28 | 1.71 |
| Jan 30, 2017 | 1.63 | 1.68 |
| Feb 1, 2016 | 1.45 | 1.48 |
| Feb 2, 2015 | 1.32 | 1.65 |
| Feb 3, 2014 | 1.00 | 1.57 |
| Feb 5, 2013 | 0.61 | 1.31 |
| Feb 8, 2012 | 0.58 | 1.27 |
| Feb 9, 2011 | 0.60 | 1.39 |
| Feb 9, 2010 | 0.53 | 1.09 |
| Feb 10, 2009 | 0.43 | 0.71 |
| Feb 20, 2008 | 0.85 | 1.62 |
| Feb 21, 2007 | 0.87 | 1.73 |
| Feb 17, 2006 | 0.75 | 1.80 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).