Defense & aerospace technology. $22B revenue, $38.7B backlog. Aerojet Rocketdyne acquisition. AGI-enabled defense modernization. | Analysis date: 2026-03-13
L3Harris is a global defense technology company formed from the 2019 merger of L3 Technologies and Harris Corporation. In 2023, it acquired Aerojet Rocketdyne (missile/space propulsion) for $4.7B. Revenue: $21.9B with a $38.7B backlog providing years of revenue visibility. The company operates across space, air, land, sea, and cyber domains. Key products: tactical radios, night vision, ISR sensors, space systems, and rocket propulsion. Strategic partnerships with Palantir and Anduril position LHX at the intersection of AI and defense hardware. Shares have rallied from $196 (52-week low) to $359 — up 83%.
L3Harris provides end-to-end defense technology solutions across all military domains. ~47,000 employees. Serves US DoD (75% of revenue), NASA, and 100+ allied countries.
| Segment | FY2025 Revenue | Key Products |
|---|---|---|
| Communication Systems (CS) | ~$5.8B | Tactical radios, satellite terminals, night vision |
| Integrated Mission Systems (IMS) | ~$6.2B | ISR platforms, maritime sensors, power systems |
| Space & Airborne Systems (SAS) | ~$6.4B | Space systems, intel/cyber, airborne combat sensors |
| Aerojet Rocketdyne (AR) | ~$3.4B | Missile propulsion, space launch engines, hypersonics |
The moat: Defense systems require physical testing, government certification, and geopolitical trust. Chinese or Russian companies cannot bid on US defense contracts. The cleared workforce + existing program access creates massive barriers.
At 42x trailing P/E and 3.4x book, LHX is expensive relative to defense peers (average P/E ~20-25x). Goodwill: $20B. Intangibles: $6.5B. Together = $26.5B out of $41.2B total assets. Tangible book value is negative: -$6.9B.
The 42x P/E is partially due to one-time charges. Operating margins (~13%) are below peers like Lockheed Martin (~13%) and Northrop Grumman (~12%), suggesting room for margin expansion as Aerojet Rocketdyne integration matures.
Stockholders' Equity (latest): $19.64B
Less Goodwill: $-20.01B
Less Intangible Assets: $-6.51B
Tangible Book Value: $-6.88B
P/TB: N/A (negative tangible book)
P/B (including intangibles): 3.42x
Share count change (earliest to latest available): -12.4%. Shares are declining via buybacks — value-accretive for shareholders.
| Demand Boost | 7/10 |
| Margin Expansion | 5/10 |
| Strategic Assets | 8/10 |
| Disruption Risk | 2/10 |
| Innovation Risk | 3/10 |
| Category | ai_enabler |
| Confidence | high |
Strong AGI beneficiary through defense modernization and autonomous systems demand. AGI accelerates military procurement of advanced ISR, autonomous platforms, secure communications, and precision weapons—all L3Harris core competencies. The DoD's shift to software-defined, AI-enabled systems directly benefits L3Harris's product portfolio (tactical networks, EO/IR sensors, space-based ISR). Strategic partnerships with Palantir and Anduril position the company at the intersection of AI and defense hardware. Physical production of complex defense systems (space sensors, propulsion, night vision) creates multi-year deployment lag for any AGI-designed alternatives. The massive backlog ($38.7B) and long-term contracts (10-20 years) provide revenue visibility. Margin expansion from AI-optimized R&D and manufacturing, but defense pricing is cost-plus with limited ability to retain savings. Innovation risk is low—defense systems require physical testing, certification, and geopolitical trust that can't be software-replicated.
| Metric | Value | Context |
|---|---|---|
| Market Cap | $67.1B | |
| P/E (trailing) | 42.1x | Expensive |
| P/Tangible Book | N/A | Negative tangible book |
| EV/EBITDA | 19.2x | |
| Dividend Yield | 140.0% | |
| 52-Week Range | $195.72 - $379.23 | Current: $358.96 (near high) |
| Beta | 0.61 | Low volatility |
| ROE | 8.2% |
The largest defense company (RTX) is worth ~$190B. $671B for L3Harris would make it larger than all defense companies combined. Not happening.
Defense industry math: US defense budget is ~$850B. Total global defense spending is ~$2.4T. Even if LHX captured 10% of all US defense spending (impossible — it would need to be larger than Lockheed), revenue would be $85B. At 15% margins and 25x P/E = $319B. Per share = $1,710 — still only 4.8x.
10x Entry Price: ~$36/share. LHX traded at $164 during COVID lows. A $36 price requires an 83% drawdown — essentially a defense spending collapse.
Verdict: LHX is a quality defense compounder but NOT a 10x candidate at $359. Already up 83% from 52-week lows. At 42x P/E, the stock is priced for near-perfect execution. Wait for a pullback to 20-25x P/E ($160-200 range). The $38.7B backlog provides revenue visibility, but defense margins cap the upside.
LHX (L3Harris Technologies) — AGI Score 8/10. Trading at $358.96 (negative tangible book, 42.1x P/E).
Key strengths: Strong AGI beneficiary through defense modernization and autonomous systems demand. AGI accelerates military procurement of advanced ISR, autonomous platforms, secure communications, and precision wea...
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Data sources: SEC EDGAR XBRL (CIK 202058), yfinance, 10-K filing, AGI scoring framework. Analysis date: 2026-03-13.