We came across a bullish thesis on Lockheed Martin Corporation (LMT) on Substack by Steve Wagner. In this article, we will summarize the bulls’ thesis on LMT. Lockheed Martin Corporation (LMT)’s share was trading at $466.81 as of April 24th. LMT’s trailing and forward P/E were 20.12 and 17.15 respectively according to Yahoo Finance.
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Lockheed Martin (LMT) delivered an impressive first-quarter 2025 performance, reinforcing its reputation as a reliable and well-managed defense compounder. Revenues grew 4% year-over-year to $18 billion, while net earnings climbed to $1.7 billion, translating to an EPS of $7.28 compared to $6.39 in Q1 2024. All four of the company’s business segments saw improved operating margins, with Missiles & Fire Control notably increasing its margin from 10.4% to 13.8%, helping drive a 19% boost in segment operating profit. Free cash flow stood at a strong $955 million, and Lockheed’s order backlog remained at a formidable ~$173 billion—equivalent to more than two years of revenue—underscoring the resilience of its long-term demand pipeline.
Alongside earnings, Lockheed reaffirmed its full-year 2025 guidance, expecting ~$74 billion in sales and $27 in EPS, demonstrating management’s confidence in navigating what it described as a “highly dynamic geopolitical and technical environment.” Recent contract wins provide concrete support for that optimism, with the company securing major new awards across its missile systems portfolio—including Precision Strike, THAAD, and JASSM/LRASM programs—as well as a significant Trident II award. These contracts, totaling up to $10 billion in potential future revenue, add further strength to the already robust backlog and enhance visibility into long-term growth.
In a move that underscores its commitment to maintaining technological leadership, Lockheed also announced the acquisition of Amentum’s Rapid Solutions business. This bolt-on acquisition expands Lockheed’s capabilities in intelligence, surveillance, and reconnaissance (ISR), advanced communications, and tactical systems—particularly through assets like electronically steered array technologies. Though not transformational in size, the acquisition is strategically sound, providing Lockheed with niche technical capabilities that align well with its broader defense technology portfolio. The integration of Rapid Solutions into the Space segment will deepen Lockheed’s ISR expertise and further support its mission to deliver next-generation solutions for high-priority defense applications.
Taken together, Lockheed’s first quarter results and its strategic acquisition strengthen the company’s investment case. Execution remains tight, the balance sheet is healthy, and guidance is solid. Management’s focus on backlog conversion, operational discipline, and incremental innovation suggest a durable growth trajectory. While not flashy, the Amentum acquisition adds depth to Lockheed’s ISR suite and marginally widens its long-term runway in advanced defense technology. For investors, this is a clear reaffirmation of Lockheed’s strength as a steady compounder with a growing technological edge.
Lockheed Martin Corporation (LMT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held LMT at the end of the fourth quarter which was 58 in the previous quarter. While we acknowledge the risk and potential of LMT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.