Core Insights - Lockheed Martin Corp. has launched a scalable, layered defense system to address small Unmanned Aerial System threats, successfully demonstrated in a recent field test [1][2][3] Company Performance - Lockheed's stock has increased by 2.6% over the past year, outperforming the aerospace-defense industry which declined by 5% and the broader aerospace sector which grew by 2.2%, but lagging behind the S&P 500's 18.3% return [4] - The company's backlog as of December 31, 2024, reached $176 billion, up from $165.69 billion in the previous quarter, with expectations to recognize approximately 35% of this backlog in the next 12 months [7] - Lockheed's cash and cash equivalents totaled $2.48 billion at the end of 2024, with current debt at $0.64 billion, indicating a strong solvency position [8] Growth Drivers - Strong order flow from the Pentagon and U.S. allies for various products, including fighter aircraft and space products, has been a key growth catalyst, contributing to a robust backlog [6] - The increasing complexity of global security threats is driving nations to expand their defense budgets, which supports consistent demand for Lockheed's solutions [9][11] Earnings Estimates - The Zacks Consensus Estimate for 2025 and 2026 sales suggests improvements of 4.6% and 4.4% year-over-year, respectively, while 2025 earnings estimates indicate a decline [12] - The first-quarter and full-year 2025 earnings per share estimates have been revised down by 3.3% and 2.1%, reflecting declining analyst confidence [12] Industry Challenges - Lockheed faces challenges such as a shortage of skilled labor, which could impact aerospace operations as production ramps up [14] - The Canadian Maritime Helicopter Program has experienced performance setbacks, including delays and cumulative losses of approximately $100 million, which may affect future profitability [15] Investment Considerations - Investors are advised to wait for a better entry point due to Lockheed's high debt-to-capital ratio and downward revisions in near-term earnings estimates [17] - Existing shareholders may consider staying invested due to the company's financial stability, positive share price performance, and solid backlog count [17]