Value
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.2 |
| P/S | 7.5 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.1 |
| PEG | 4.9 |
| Analyst target | 7.5 |
- ▸Forward P/E: 21.0x
- ▸PEG: 1.65
LHX · Why this verdict
Why L3Harris Technologies (LHX) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
L3Harris has posted four consecutive earnings beats with an average 8.3% surprise and the setup offers an approximately 2.9-to-1 reward-to-risk ratio with 13% upside to the take-profit level, but the stock currently trades below its rising long-term moving average in a technical distribution pattern, and 75% revenue exposure to a single customer creates sensitivity to defense budget developments.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With 75% of revenue tied to a single customer, the business is highly sensitive to appropriations cycles, continuing resolutions, and defense budget negotiations — any of which could compress near-term order intake without warning. Bear case | The government share of revenue declines below 70% over the next two fiscal years as commercial or allied-nation sales grow, diversifying the revenue base. | →Stable |
| CounterLong-term defense contracts are often embedded in multi-year programs with legally committed funding; the revenue base may be more predictable and durable than the concentration percentage alone implies. | ||
The company has beaten consensus EPS estimates in all four of the most recent quarters with surprises ranging from 3.6% to 13.0% and an average of 8.3%, demonstrating consistent ability to set achievable guidance and deliver above it. Earnings | The beat streak extends to six consecutive quarters with average quarterly surprise remaining above 6%. | →Stable |
| CounterAll four beats occurred during a period of elevated defense-spending growth; if appropriations slow or continuing resolutions compress near-term orders, the guidance discipline may not be sufficient to maintain the streak. | ||
With 13% of headroom to the take-profit target and a reward-to-risk ratio of approximately 2.9-to-1, the asymmetry bar is cleared with a comfortable cushion — making this a setup where the geometry supports entry. Engine gate (passed) | Price advances toward the take-profit target over the next twelve months without testing the stop-loss floor, realizing the favorable asymmetry built into the setup. | →Stable |
| CounterThe stock currently trades below its long-term moving average with falling on-balance volume; if the technical weakness persists, the stop-loss level may be tested before any advance materializes, negating the favorable upside math. | ||
The stock trades below its 200-day moving average, but that average itself is still rising at 1.9% per thirty days — a configuration described as a pullback within a longer uptrend where the breakdown is not yet confirmed, even as on-balance volume moves into distribution. Momentum breakdown | The stock reclaims the 200-day moving average and on-balance volume turns accumulating within two quarters, resolving the current technical ambiguity in favor of the underlying trend. | →Stable |
| CounterDistribution in on-balance volume while trading below a long-term average can be an early warning of more significant deterioration; waiting for confirmation may cost meaningful ground if the trend does in fact roll over. | ||
With 75% of revenue tied to a single customer, the business is highly sensitive to appropriations cycles, continuing resolutions, and defense budget negotiations — any of which could compress near-term order intake without warning.
→StableBear case
- Expectation
- The government share of revenue declines below 70% over the next two fiscal years as commercial or allied-nation sales grow, diversifying the revenue base.
CounterLong-term defense contracts are often embedded in multi-year programs with legally committed funding; the revenue base may be more predictable and durable than the concentration percentage alone implies.
The company has beaten consensus EPS estimates in all four of the most recent quarters with surprises ranging from 3.6% to 13.0% and an average of 8.3%, demonstrating consistent ability to set achievable guidance and deliver above it.
→StableEarnings
- Expectation
- The beat streak extends to six consecutive quarters with average quarterly surprise remaining above 6%.
CounterAll four beats occurred during a period of elevated defense-spending growth; if appropriations slow or continuing resolutions compress near-term orders, the guidance discipline may not be sufficient to maintain the streak.
With 13% of headroom to the take-profit target and a reward-to-risk ratio of approximately 2.9-to-1, the asymmetry bar is cleared with a comfortable cushion — making this a setup where the geometry supports entry.
→StableEngine gate (passed)
- Expectation
- Price advances toward the take-profit target over the next twelve months without testing the stop-loss floor, realizing the favorable asymmetry built into the setup.
CounterThe stock currently trades below its long-term moving average with falling on-balance volume; if the technical weakness persists, the stop-loss level may be tested before any advance materializes, negating the favorable upside math.
The stock trades below its 200-day moving average, but that average itself is still rising at 1.9% per thirty days — a configuration described as a pullback within a longer uptrend where the breakdown is not yet confirmed, even as on-balance volume moves into distribution.
→StableMomentum breakdown
- Expectation
- The stock reclaims the 200-day moving average and on-balance volume turns accumulating within two quarters, resolving the current technical ambiguity in favor of the underlying trend.
CounterDistribution in on-balance volume while trading below a long-term average can be an early warning of more significant deterioration; waiting for confirmation may cost meaningful ground if the trend does in fact roll over.
Per-dimension breakdown
Quality
5.2/10data confidence 71%| Component | Sub-score |
|---|---|
| Gross margin | 2.1 |
| Op margin | 3.9 |
| Net margin | 5.2 |
| Moat | 5.8 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
5.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 0.8 |
- ▸Strong growth: 190% YoY
Momentum
1.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+1.7%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 7.5 |
| Price target | 8.7 |
- ▸Analyst upside: 32%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $676,781 (0.001% of mkt cap)
Peer rank
5.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.6 |
| quality rank | 7.4 |
| growth rank | 9.6 |
- ▸Industry growth leader
Technical
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.9 |
| support resistance | 8.0 |
| 52w position | 5.4 |
Risk (lower is worse)
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.3 |
| days to cover | 9.2 |
| volatility | 4.3 |
| put call | 10.0 |
| implied vol | 6.7 |
| max pain risk | 3.0 |
| beta | 8.5 |
| debt equity | 8.6 |
- ▸Above max pain $205
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.6 |
| dividend safety | 4.8 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (5)
- ASYMMETRY:2.8>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:1.3<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.84
Upside
+18.6%
Downside
6.6%
Sizing output
AVOID
SetupFALLING_KNIFE — Death cross, below all MAs, RSI 39, MACD bearish
EdgeCATALYST — Earnings in 28d with 4/4 beat streak
SuitabilityMODERATE — Balanced profile
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: ASYMMETRY:2.8>=1.5. Top dim: Sentiment at 7.5; weakest: Momentum at 1.3. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Sentiment at 7.5, Risk (lower is worse) at 7.5, and Technical at 7.4; the weakest are Momentum at 1.3, Insider at 5.0, and Quality at 5.2. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 2.84 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The company has beaten consensus EPS estimates in all four of the most recent quarters with surprises ranging from 3.6% to 13.0% and an average of 8.3%, demonstrating consistent ability to set achievable guidance and deliver above it.
Trip ifEPS surprise falls below 0% in any of the next 2 reported quarters.
- P2With 13% of headroom to the take-profit target and a reward-to-risk ratio of approximately 2.9-to-1, the asymmetry bar is cleared with a comfortable cushion — making this a setup where the geometry supports entry.
Trip ifStock price declines more than 8% from current levels ($304.17), testing the stop-loss floor and invalidating the favorable reward-to-risk geometry.
- P3With 75% of revenue tied to a single customer, the business is highly sensitive to appropriations cycles, continuing resolutions, and defense budget negotiations — any of which could compress near-term order intake without warning.
Trip ifU.S. Government revenue share falls below 65% of total revenue for 2 consecutive fiscal periods, indicating meaningful customer diversification.
- P4The stock trades below its 200-day moving average, but that average itself is still rising at 1.9% per thirty days — a configuration described as a pullback within a longer uptrend where the breakdown is not yet confirmed, even as on-balance volume moves into distribution.
Trip ifStock price sustains above the 200-day moving average for 15 consecutive trading sessions while on-balance volume rises, confirming the uptrend is intact.