Huntington Ingalls Industries, Inc. (HII) Intrinsic Value & DCF Valuation
Aerospace & Defense · NYSE
Current Price
$298.20
Intrinsic Value
$284.85
-4.7% margin of safety
What Is Huntington Ingalls Industries, Inc.'s Intrinsic Value?
As of 2026-08-21, the base-case DCF model estimates the intrinsic value of Huntington Ingalls Industries, Inc. (HII) at $284.85 per share, compared with a market price of $298.2, a margin of safety of -4.7%. The base case assumes 6.3% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $238.66 to $337.42. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Huntington Ingalls Industries, Inc. (HII) Undervalued?
At $298.2, HII trades about 4.7% above the base-case intrinsic value estimate, a modest premium. By this model the price sits within a normal band, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Naval Shipbuilding Expertise
HII possesses unique, highly specialized expertise in constructing complex naval vessels like aircraft carriers and submarines. This requires decades of experience and a highly skilled workforce, creating significant barriers to entry.
↑Long-Term Government Contracts
The company benefits from long-term, multi-year contracts with the U.S. Navy and other government agencies. These contracts provide predictable revenue streams and lock in customer relationships for extended periods.
↑Critical Defense Infrastructure
HII operates vital shipbuilding facilities that are essential for national security. The strategic importance of these assets and the associated regulatory hurdles make it difficult for competitors to replicate.
INVESTMENT RISKS
↓Government Budgetary Constraints
HII's revenue is heavily reliant on U.S. defense spending. Any significant cuts or shifts in government procurement priorities could negatively impact future contract awards and revenue.
↓Program Delays and Cost Overruns
Large, complex shipbuilding projects are prone to delays and cost overruns. These issues can strain profitability and damage relationships with key government customers.
↓Supply Chain Vulnerabilities
The intricate nature of defense manufacturing means HII is susceptible to disruptions in its global supply chain. Shortages or price increases of critical components can impact production schedules and costs.
Base case
HII base case valuation
Intrinsic Value
$284.85
Margin of safety
-4.7%
Expected annual return
-0.9%
Base case assumptions: 6.3% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the HII valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Huntington Ingalls Industries, Inc. respond.
Open DCF Calculator for HIICompany Overview
Huntington Ingalls Industries, Inc. (HII) stands as a prominent American enterprise specializing in the comprehensive lifecycle management of military vessels, encompassing their design, construction, modernization, and maintenance. The company's diverse operations are segmented into three core divisions: Ingalls Shipbuilding, Newport News Shipbuilding, and Technical Solutions. HII is a primary builder of non-nuclear ships, delivering amphibious assault ships, expeditionary warfare vessels, surface combatants, and national security cutters to both the U.S. Navy and U.S. Coast Guard. Furthermore, it plays a critical role in providing nuclear-powered ships, including aircraft carriers and submarines, along with essential associated services such as refueling, extensive overhauls, and inactivation procedures. Beyond direct shipbuilding, Huntington Ingalls Industries offers specialized naval nuclear support services, covering the full spectrum from design and construction to maintenance and disposal for active U.S. Navy nuclear fleets, in addition to maintaining nuclear reactor prototypes. Its broader technical and support portfolio includes life-cycle sustainment services for the U.S. Navy fleet and other maritime clients; sophisticated information technology and mission-specific solutions for defense, intelligence, and federal civilian agencies; nuclear facility management, operational support, and environmental remediation services for various government bodies and private sector entities; comprehensive defense and federal solutions; and the development of cutting-edge unmanned systems. Established in 1886, Huntington Ingalls Industries, Inc. is headquartered in Newport News, Virginia.
Financial Metrics — HII Stock Valuation Data
Revenue/Share (TTM)
$333.80
FCF/Share (TTM)
$9.52
ROIC (TTM)
5.3%
ROE (TTM)
12.9%
P/FCF
31.3x
EV/EBITDA
13.2x
FCF Yield
3.20%
Debt/Equity
0.55x
Based on trailing twelve-month data, HII shows a free cash flow per share of $9.52 and a ROIC of 5.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 31.3x and FCF yield of 3.20% are important context metrics when evaluating HII's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of HII?
Huntington Ingalls Industries, Inc. currently generates $9.52 in free cash flow per share. At the current price of $298.20, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is HII undervalued?
HII trades at a P/FCF ratio of 31.3x with a free cash flow yield of 3.20%. This P/FCF is in a moderate range. However, whether HII is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value HII stock using DCF?
To perform a DCF valuation on Huntington Ingalls Industries, Inc.: (1) Start with the trailing free cash flow per share ($9.52) as the base, (2) project future FCF growth over 5-10 years based on Aerospace & Defense industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting HII's risk profile — with a debt-to-equity of 0.55x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to HII?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Huntington Ingalls Industries, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Aerospace & Defense trends, then discounting those amounts to today's dollars. HII's ROIC of 5.3% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect HII stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For HII, with a debt-to-equity ratio of 0.55x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 13.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See HII PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value HII with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.