Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 24 Aug 2026
LMT· Industrials
Lockheed Martin
Lockheed Martin's high ROIC of 24% is strong, but valuation and debt levels raise concerns.
Buffett fit
Partial fit
Owner
42
Durability
63
Management
55
Price
35
Score updated 22 Oct 2026 · analysis from 24 Aug 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned 100% of Lockheed Martin, we'd focus on maintaining high , which is 24%, and managing debt, with a net debt/EBITDA of 2.01.
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Lockheed Martin's durability hinges on continued government defense spending and geopolitical stability.
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Lockheed Martin has reduced its share count by 4.08% annually over the past five years, indicating shareholder-friendly .
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With a of 26.8 and yield of 5.14%, Lockheed Martin appears overvalued given its EPS CAGR of -0.27%.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 24% is top-quintile in the Industrials sector.
- 2Net income of $5.02B demonstrates consistent profitability.
- 3Share count reduction of 4.08% annually indicates strong program.
- 4Interest coverage ratio of 6.3 suggests manageable debt levels.
Concerns
5- 1 of 26.8 suggests high valuation relative to earnings growth.
- 2Debt/Equity ratio of 3.23 indicates significant .
- 3 of 10.3% is below sector top-quintile.
- 4EPS CAGR of -0.27% over five years indicates stagnant earnings.
Price history
$590+77.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Lockheed Martin operates in aerospace and defense, with segments like Aeronautics and Missiles and Fire Control. The company generated $75.05B in revenue, with a net margin of 6.7%. The business is capital-intensive, but it benefits from government contracts providing stable cash flows. Unit economics are driven by large, long-term contracts, typically with government entities.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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