Lockheed Martin Corporation (LMT) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Lockheed Martin Corporation

Updated on October 23, 2026 · accounts published on October 22, 2026

Reading of October 22, 2026: A highly profitable industrial business with strong cash conversion and slimmer margins

Lockheed Martin trades at a P/E of 21.0×, 20 % below its sector median of 26.2×, with ROIC of 19.8 % over the last 12 months.

• Is Lockheed Martin expensive or cheap? Lockheed Martin's P/E is 20 % below its sector median, but the stock has traded lower 75 % of the time over the last decade.
• How is the business doing? Revenue grew 5.7 % over the last 12 months while EPS fell 3.7 %, and the 11.8 % operating margin trails its 12.6 % long-run average.
• How strong is the balance sheet? Net debt is 2.3× EBITDA in fiscal 2025, under the 3× healthy ceiling for industrials, and the dividend has risen 11 years in a row.
• What to expect from the next earnings? Analysts expect EPS of $8.55 for the quarter reported on February 4, 2027, with fiscal 2026 estimates flat over the last 30 days.
• Does Lockheed Martin turn its margin into cash, and at what multiple of the cycle does it trade? Free cash flow equalled 138 % of net income in fiscal 2025, well above the 85 % that industrials treat as healthy.

Is Lockheed Martin expensive or cheap?

Over the last 12 months Lockheed Martin trades at a P/E of 21.0×, 10 % above its ten-year median of 19.0× and 20 % below the 26.2× median of its sector. Its own history is the harsher yardstick: the stock has traded at a lower P/E 75 % of the time over the past decade, in a range from 13.2× to 30.0×. EV/EBITDA of 14.4× sits close to its seven-year average of 13.7×, inside the band industrials treat as fair. After a 23 % gain over the last 12 months, the shares stand 12 % below their 52-week high of $676.70. Cheaper than its peers, but not cheap against itself.

How is the business doing?

Revenue rose 5.7 % over the last 12 months while EPS slipped 3.7 %, so growth is not reaching the bottom line. The operating margin of 11.8 % over the last 12 months sits below the 12.6 % average of fiscal 2014-2025, although it has recovered from 10.3 % in fiscal 2025. Returns on capital are the strong point: ROIC of 19.8 % over the last 12 months is 11.0 points above the 8.9 % sector median, and it has stayed above 10 % in 9 of the last 10 fiscal years, with 7.1 % in 2017 the only miss. The 78.8 % ROE mostly reflects a thin equity base, as a P/B of 13.5× shows.

How strong is the balance sheet?

Net debt of $80.97 per share in fiscal 2025 equals 14 % of the current share price and 2.3× EBITDA, below the 3× that industrials treat as the healthy limit. Debt to equity of 2.04 looks heavy, but it says more about the small equity base than about the debt load. The Altman Z of 3.3 over the last 12 months sits in the safe zone above 2.99, and a Piotroski score of 7 out of 9 signals high quality. The dividend yields 2.3 % over the last 12 months, has grown for 11 consecutive fiscal years and absorbed 62 % of fiscal 2025 earnings, which leaves room but limited slack.

What to expect from the next earnings?

On October 22, 2026, Lockheed Martin reported EPS of $7.97, 6 % above the $7.52 analysts expected. Beats are less routine than that result suggests: the company has topped EPS estimates in only 4 of the last 8 quarters. The fiscal 2026 EPS consensus barely moved over the last 30 days, from $30.44 to $30.43 across 15 analysts, and revenue estimates are just as stable. For the next report, due February 4, 2027, analysts expect EPS of $8.55. Of the 37 analysts covering the company, 22 recommend buying, 14 holding and 1 selling.

Does Lockheed Martin turn its margin into cash, and at what multiple of the cycle does it trade?

Industrials such as aerospace and defence are semi-cyclical, so a single year's profit can mislead; operating margin, cash conversion and cycle-adjusted multiples say more. Lockheed Martin converts well: free cash flow reached 138 % of net income in fiscal 2025 against a healthy threshold of 85 %, and the free cash flow yield is 6.4 % over the last 12 months. Two checks fall short. The fiscal 2025 operating margin of 10.3 % misses the 12 % bar, and capex at 2.2 % of revenue sits below the healthy 4-8 % range, a light level of investment that flatters cash flow. Revenue per share grew 6.8 % a year over fiscal 2020-2025, above the 6 % mark.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.