L3Harris Technologies (LHX) Stock Analysis & Winston Score

L3Harris Technologies makes advanced equipment for the military and government agencies. Its main products include radios and communication systems, sensors, electronic warfare tools, night-vision devices, and space technology. The U.S. Department of Defense is its largest customer, making L3Harris one of the top six defense contractors in the United States.

The company earns most of its revenue through long-term government contracts, where it builds and maintains specialized hardware and systems. L3Harris operates primarily in the United States but also sells to allied governments around the world, generating roughly $20 billion in annual revenue. Its moat comes from deep government relationships, security clearances, and highly specialized technology that takes years to develop — but its main risk is heavy dependence on U.S. defense budget decisions, meaning any cuts to military spending could directly hurt its business.

Winston Score History

Politician Trades

6 trades / 12mo

2 Congressional buys and 4 sells on LHX in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+2.3% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-32.8% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$536M/ year

→ Flat (+4% vs prior year)

2.5% of revenue

Below sector average (4%)

Steady R&D investment year-over-year

Insider Activity

0.4%ownership

Relatively low insider ownership

Cash Position

Cash flow positive

$1.1B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

L3Harris Technologies is growing revenue at 2% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count falling — buybacks

−7.3% over 5y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 203.2M (2021) → 188.4M (2026)

Score breakdown

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Quality

Gross Margin

25.6%

Modest — 25.6% gross margin

Operating Margin

7.0%

Modest — 7.0% operating margin

ROCE

1.3%

Weak — 1.3% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+6.7%

Slow sales growth (6.7% YoY)

EPS YoY

+7.6%

Modest earnings growth (7.6% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

205%

Turns 205% of profit into real cash

FCF Margin

13.5%

Converts sales into free cash efficiently (13.5%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.53

Conservative — low debt load (0.53)

Interest Cover

3.84x

Tight — interest eats into profit (3.8x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

31.3x

Pricey — P/E 31.3

P/E above the market average. People are paying up for expected growth.

P/E vs Forward

+11.6

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (31.3 → 19.6)

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Dividends

Dividend Yield

1.57%

Small dividend — 1.57% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

+3.8%

Dividend growing modestly (3.8% YoY)

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