Value
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.0 |
| P/S | 7.3 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.8 |
| PEG | 4.8 |
| Analyst target | 6.0 |
- ▸Forward P/E: 22.1x
- ▸PEG: 1.73
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 score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
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.
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.
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
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 5.2 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+1.5%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.3 |
| Analyst rating | 7.5 |
| Price target | 8.3 |
- ▸LLM news sentiment: +0.47 (n=3)
- ▸Analyst upside: 26%
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 | 7.7 |
| growth rank | 9.5 |
- ▸Industry growth leader
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.3 |
| support resistance | 4.6 |
| 52w position | 6.0 |
Risk (lower is worse)
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.1 |
| days to cover | 8.1 |
| volatility | 4.9 |
| put call | 10.0 |
| implied vol | 6.5 |
| beta | 8.5 |
| debt equity | 8.6 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data 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 | 7.0 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:5.9>=5.5
- ASYMMETRY:2.1>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:18d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.09
Upside
+13.5%
Downside
6.5%
Sizing output
AVOID
SetupRange Bound — RSI 46 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 18d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.9>=5.5. Top dim: Risk (lower is worse) at 8.0; weakest: Value at 4.8. No conviction either direction.
The strongest dimensions are Risk (lower is worse) at 8.0, Sentiment at 7.7, and Catalyst at 6.4; the weakest are Value at 4.8, Technical at 5.0, and Insider at 5.0. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 2.09 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Four Quarter Earnings Execution
Trip ifEPS surprise falls below 0% in any of the next 2 reported quarters.
- P2Favorable Risk Reward Meaningful Upside
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.
- P3Us Government Customer Concentration
Trip ifU.S. Government revenue share falls below 65% of total revenue for 2 consecutive fiscal periods, indicating meaningful customer diversification.
- P4Pullback In Uptrend Not Confirmed
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.