What Happened?

Shares of aerospace and defense company Huntington Ingalls (NYSE:HII) fell 17% in the morning session after the company reported a disappointing fourth quarter, with EPS missing significantly and revenue falling short of Wall Street's estimates. The weak top line was driven by lower volume in all segments. Overall, this was a challenging quarter.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Huntington Ingalls? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Huntington Ingalls’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Huntington Ingalls and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 23.8% on the news that the company reported weak third-quarter earnings as its revenue and EPS missed Wall Street's estimates. The weak top line was a result of lower volume at Ingalls and Newport News Shipbuilding. Other challenges highlighted during the quarter include delays in the timing of a key submarine contract agreement with the Navy, which affected profitability and cash flow. Overall, this was a weaker quarter.

Huntington Ingalls is down 13.5% since the beginning of the year, and at $162.41 per share, it is trading 45.2% below its 52-week high of $296.43 from March 2024. Investors who bought $1,000 worth of Huntington Ingalls’s shares 5 years ago would now be looking at an investment worth $604.86.

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