Is Northrop Grumman Corporation (NOC) overvalued?
On Equity Rank's model estimate, NOC trades 15% below its fair value. Northrop Grumman Corporation (NOC) last closed at $525.01; the multi-method model fair value is $615.41.
| Price | Model fair value | Price vs model |
|---|---|---|
| $525.01 | $615.41 | 15% below |
What the answer rests on
- 5 of 11 valuation methods put NOC's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, NOC's free cash flow would need to grow about 7.8% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 31.1% a year.
- Over the past year the price sat below the model fair value on 83% of trading days. The gap ranged from 25% below to 15% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind NOC's fair value · What prices assume · Other companies