Common Stock Valuation Ratios (Price Multiples)
Quarterly Data
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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- Income Statement
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Income Statement
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Analysis of Revenues
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Historical Valuation Ratios (Summary)
Northrop Grumman Corp., historical price multiples (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The analysis of the quarterly financial ratios reveals several notable trends over the period from March 2019 through March 2023.
- Price to Earnings (P/E) Ratio
- The P/E ratio exhibited considerable fluctuation. From March 2019 to December 2019, it showed a rising trend, peaking at 28.7 in the last quarter of 2019. Subsequently, it declined steadily through 2020 and early 2021, reaching a low point of 8.33 in December 2021. Following this, the P/E ratio rebounded somewhat, stabilizing in the 12 to 15 range up to March 2023. This pattern suggests a period of high market valuation relative to earnings in late 2019, followed by a correction and stabilization thereafter.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio was more stable from 2019 into early 2021, fluctuating moderately between 9.38 and 16.26. However, starting in early 2022, there was a marked increase, with the ratio rising sharply to a peak of 23.98 in the third quarter of 2022 before decreasing slightly toward early 2023. This increase may indicate a rise in the company's market valuation relative to its operating income during 2022, potentially reflecting changing investor expectations or shifts in operational profitability.
- Price to Sales (P/S) Ratio
- The P/S ratio showed a generally upward trend over the entire period. Starting at 1.51 in March 2019, it increased gradually, reaching over 2.3 by the third quarter of 2022. A slight decline was observed afterward, with the ratio stabilizing around 1.85 to 1.87 by early 2023. This trend suggests that the market was willing to pay higher multiples of sales over time, potentially indicating revenue growth or improved market sentiment about sales prospects.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio displayed volatility but limited directional movement. It rose from 5.44 in early 2019 to a high of 7.32 at the end of that year, then gradually declined throughout 2020 and 2021 to around 4.43 by December 2022. There was a modest increase again toward the first quarter of 2023, reaching 4.59. This pattern points to fluctuations in market valuation relative to the company's book value, with some compression during the pandemic period followed by partial recovery.
Overall, the financial ratios depict a period of significant market valuation variability, with peaks around late 2019 and mid-2022. The P/E and P/OP ratios highlight changes in earnings and operating profit valuation multiples, while the P/S ratio indicates increasing willingness to pay for sales, possibly reflecting market optimism. The P/BV ratio’s fluctuations suggest adjustments in investor perceptions of the company's net asset value over time.
Price to Earnings (P/E)
Northrop Grumman Corp., historical P/E calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||
| Net earnings (in millions) | |||||||||||||||||||||||
| Earnings per share (EPS)2 | |||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||
| P/E ratio4 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| P/E Ratio, Competitors5 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Data adjusted for splits and stock dividends.
2 Q1 2023 Calculation
EPS
= (Net earningsQ1 2023
+ Net earningsQ4 2022
+ Net earningsQ3 2022
+ Net earningsQ2 2022)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of Northrop Grumman Corp. Quarterly or Annual Report.
4 Q1 2023 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals distinct trends in share price, earnings per share (EPS), and the price-to-earnings (P/E) ratio over the observed periods.
- Share Price
- The share price exhibited an overall upward trajectory from March 2019 to March 2023, despite some short-term fluctuations. Starting at $280 in March 2019, the price rose sharply to a peak of $384.87 by December 2019. A decline followed in 2020, reaching a low near $293 by December 2020, possibly reflecting market uncertainties. Thereafter, the price recovered strongly, reaching a notable peak of $535.51 in September 2022. This was followed by a decrease towards the end of 2022 and early 2023, stabilizing around $457 by March 2023.
- Earnings Per Share (EPS)
- The EPS displayed significant variability throughout the periods. From an initial value of $19.15 in March 2019, EPS remained relatively stable until late 2019, with minor dips and rises. The first quarter of 2020 saw a low near $13.41, but a steady recovery ensued, reaching a peak of $44.87 in December 2021. Post this peak, EPS gradually declined to approximately $31.5 by March 2023, indicating fluctuations in profitability that may have been influenced by external economic or operational factors.
- P/E Ratio
- The P/E ratio showed an inverse trend compared to EPS over most periods. Beginning at 14.62 in March 2019, it increased sharply to 28.7 by December 2019, possibly due to a rising share price outpacing earnings growth or declining EPS. During 2020, the ratio moderated, reaching a low of 8.33 in December 2021, coinciding with the EPS peak, which suggests the company's earnings had increased disproportionally to the share price. Following this low point, the P/E ratio rose again modestly to around 14.53 by March 2023, reflecting adjustments in market valuation relative to earnings.
Overall, the data indicate a company with fluctuating earnings but an appreciating share price over the medium term. The P/E ratio movements suggest periods of market revaluation possibly connected to changes in earnings performance and investor sentiment. The peak in EPS during late 2021 followed by a decline, together with the share price behavior, may warrant further scrutiny to understand underlying operational developments and market conditions driving these trends.
Price to Operating Profit (P/OP)
Northrop Grumman Corp., historical P/OP calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||
| Operating income (in millions) | |||||||||||||||||||||||
| Operating profit per share2 | |||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||
| P/OP ratio4 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| P/OP Ratio, Competitors5 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Data adjusted for splits and stock dividends.
2 Q1 2023 Calculation
Operating profit per share
= (Operating incomeQ1 2023
+ Operating incomeQ4 2022
+ Operating incomeQ3 2022
+ Operating incomeQ2 2022)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of Northrop Grumman Corp. Quarterly or Annual Report.
4 Q1 2023 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The analyzed quarterly data reveals several notable trends in the company's share price, operating profit per share, and price-to-operating profit (P/OP) ratio from the first quarter of 2019 through the first quarter of 2023.
- Share Price
- The share price demonstrated an overall upward trend with periodic fluctuations. Starting at $280 in March 2019, it rose steadily through 2019, reaching about $384.87 by the end of that year. In 2020, the share price experienced some volatility, declining from $331.83 in the first quarter to a low near $293.03 by the end of 2020. A significant recovery and growth phase occurred in 2021 and 2022, peaking sharply at $535.51 in September 2022. Thereafter, a decline ensued, with the share price decreasing to $443.47 by December 2022 and slightly rebounding to $457.68 in March 2023.
- Operating Profit per Share (OP per Share)
- The operating profit per share remained relatively stable over the period, showing modest increases and decreases. From $22.78 in March 2019, it stayed in the range of $22 to $24 through 2019 and 2020. A marked increase occurred in 2021, with values rising into the mid- to high-30s ($36.20 to $38.23), indicating improved profitability during this period. However, in 2022, the OP per share reverted to levels similar to the earlier years, fluctuating around $22 to $24. By the first quarter of 2023, the OP per share was at $24.04, indicating a slight recovery from the lowest points in late 2022.
- Price-to-Operating Profit (P/OP) Ratio
- The P/OP ratio showed significant variability inversely correlated with the operating profit trends. Initially, it increased from 12.29 in early 2019 to a high of 16.26 by the end of 2019. During 2020, this ratio generally declined to approximately 12 by December, reflecting a period where operating profit per share was stable or slightly increasing while share prices were subdued. In 2021, the P/OP ratio decreased to its lowest values in the entire period (around 9.38 to 10.33), coinciding with the peak in operating profit per share, suggesting shares were potentially undervalued relative to earnings. However, in 2022, the P/OP ratio surged significantly, exceeding 23 at one point, driven by a sharp rise in share prices combined with a decline in operating profit per share. This high valuation multiple suggests market expectations were elevated despite diminished profitability. In the first quarter of 2023, the P/OP ratio remained elevated at around 19, implying sustained market optimism or potential overvaluation compared to operating profits.
In summary, the company experienced a period of stable operating profitability that peaked during 2021, accompanied by a share price recovery and attractive valuation multiples at that time. The subsequent months showed a disconnect where rising share prices outpaced operating profit growth, leading to increased valuation multiples. This pattern highlights market optimism but also potential risks if earnings do not improve correspondingly. The reversion to more normalized operating profit levels alongside fluctuating share prices signals the need for continuous monitoring of profitability relative to valuation.
Price to Sales (P/S)
Northrop Grumman Corp., historical P/S calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||
| Sales (in millions) | |||||||||||||||||||||||
| Sales per share2 | |||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||
| P/S ratio4 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| P/S Ratio, Competitors5 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Data adjusted for splits and stock dividends.
2 Q1 2023 Calculation
Sales per share
= (SalesQ1 2023
+ SalesQ4 2022
+ SalesQ3 2022
+ SalesQ2 2022)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of Northrop Grumman Corp. Quarterly or Annual Report.
4 Q1 2023 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the quarterly financial data highlights several notable trends related to the share price, sales per share, and price-to-sales (P/S) ratio over the examined periods.
- Share Price
- The share price experienced general growth with some fluctuations. Initially, there was a steady increase from March 2019 ($280) through December 2019 ($384.87). However, the price declined during 2020, reaching a low of $293.03 by December 2020, likely reflecting market uncertainty. Subsequently, the share price rebounded with a strong upward trend in 2021 and early 2022, reaching a peak of $535.51 in September 2022. This peak was followed by a decline towards the end of 2022 and a modest recovery in the first quarter of 2023, ending at $457.68.
- Sales Per Share
- Sales per share displayed a consistent upward trajectory throughout the entire period, increasing from $185.80 in March 2019 to $244.34 by March 2023. The progression was steady with minor fluctuations, indicating ongoing growth in sales performance on a per-share basis. The growth rate appeared relatively stable without sharp increases or declines, reflecting sustained operational performance during the timeframe.
- Price-to-Sales (P/S) Ratio
- The P/S ratio exhibited variability that partly corresponded to changes in the share price relative to sales per share. From March 2019 to December 2019, the ratio rose from 1.51 to 1.91, denoting increasing investor valuation relative to sales. During 2020, the P/S ratio decreased from 1.61 in March to 1.33 in December, consistent with the share price decline while sales per share maintained their growth. In 2021 and early 2022, the P/S ratio climbed again, reaching a high of 2.34 in September 2022, driven by the peak in share price. Afterwards, the ratio decreased to 1.85 by March 2023, indicating a moderation in valuation relative to sales.
Overall, the data suggests a robust growth in sales per share accompanied by more volatile share prices and valuation multiples. The fluctuations in the share price and P/S ratio reflect changing market sentiment and valuation dynamics, while the steady increase in sales per share underscores consistent operational effectiveness.
Price to Book Value (P/BV)
Northrop Grumman Corp., historical P/BV calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||
| Shareholders’ equity (in millions) | |||||||||||||||||||||||
| Book value per share (BVPS)2 | |||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||
| P/BV ratio4 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| P/BV Ratio, Competitors5 | |||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Data adjusted for splits and stock dividends.
2 Q1 2023 Calculation
BVPS = Shareholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Northrop Grumman Corp. Quarterly or Annual Report.
4 Q1 2023 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals distinct trends in the share price, book value per share (BVPS), and price-to-book value (P/BV) ratio over the examined periods.
- Share Price
- The share price started at $280 in March 2019 and experienced a general upward trend with some fluctuations. It reached a peak of $384.87 in December 2019 before declining during the first half of 2020, likely reflecting market uncertainties during that period. Following this decline, the share price gradually recovered, reaching a significant peak of $535.51 in September 2022. After this peak, the price decreased sharply by the end of 2022, then showed a mild rebound in the first quarter of 2023, ending at $457.68.
- Book Value Per Share (BVPS)
- The book value per share exhibited steady growth throughout the entire period, indicating consistent accumulation of the company's net assets. Starting at $51.47 in March 2019, BVPS increased incrementally each quarter, reaching approximately $100 by March 2023. This continuous increase points to ongoing improvements in the company’s equity base, unaffected by the fluctuations in the share price.
- Price-to-Book Value (P/BV) Ratio
- The P/BV ratio showed more variability. Initially high at 5.44 in March 2019, it peaked at 7.32 in December 2019 before declining substantially through 2020 to reach a low of 4.43 by December 2022. This decline reflects the reduction in market valuation relative to the company's book value, especially evident during the volatility period of 2020 and again in late 2022. The ratio showed a slight recovery to 4.59 by March 2023, suggesting a relative stabilization in market perception compared to book value.
In summary, the data indicates the company’s solid growth in net asset value per share alongside a fluctuating market valuation represented by share price and P/BV ratio. The divergence between steadily increasing BVPS and more volatile share price implies that external market factors and investor sentiment significantly influenced market capitalization. The P/BV ratio's decline from high levels in 2019 to more moderate levels by 2022 could indicate a transitional phase in market valuation standards or investor expectations. The mild rebound in early 2023 might suggest a cautiously optimistic outlook from the market moving forward.