A book-to-bill ratio of 4.0 in the third quarter of 2026 signals that Lockheed Martin (NYSE: LMT) is pulling in new orders at a pace that far outstrips its current revenue base.
That demand surge pushed the company’s backlog to a record $292 billion as of September 27, 2026, up sharply from $230 billion just one quarter earlier.
Despite that extraordinary momentum, LMT shares trade at a forward 12-month price-to-sales ratio of just 1.56X, a meaningful discount to the aerospace-defense industry average of 2.16X.
That valuation gap has emerged even as the stock has climbed 12% over the past six months, a period during which the broader Zacks Aerospace-Defense industry fell 8.8%.
The outperformance reflects a wave of major contract awards, including a seven-year PAC-3 missile defense agreement valued at up to $58.6 billion and a separate seven-year THAAD deal worth $35 billion.
Allied demand for advanced air and missile defense systems also drove a $439 million ATACMS production contract tied to Taiwan’s HIMARS launchers and an $800 million award for Australia’s AIR6500 battle management program.
On October 26, 2026, Lockheed completed its $3.45 billion acquisition of Ultra Maritime, a specialist in undersea and anti-submarine warfare technologies serving allied naval forces globally.
The deal is expected to expand Lockheed’s sonar portfolio and deepen its relationships with allied navies, broadening the revenue base of its Rotary and Mission Systems segment.
On November 5, 2026, the company announced it is accelerating Orion spacecraft production for NASA’s Artemis III, IV, and V missions, a move aimed at cutting manufacturing costs and shortening delivery timelines.
As Orion’s prime contractor, Lockheed is positioning itself to benefit from NASA’s longer-term lunar exploration ambitions and eventual human missions to Mars.
The Zacks Consensus Estimate projects Lockheed’s 2026 earnings per share will grow 32.61% year-over-year, well ahead of peer RTX Corporation (NYSE: RTX) at 22.1% and outpacing RTX’s long-term growth rate of 11.69%.
Lockheed’s own long-term earnings growth rate stands at 15.37%, while its current ratio of 1.26 exceeds the industry average of 1.10, pointing to solid near-term financial flexibility.
The company has beaten earnings estimates in three of its last four quarters, delivering an average positive surprise of 8%, though it did miss in one quarter during that stretch.
Not all signals are uniformly positive: Lockheed’s Aeronautics segment recorded $40 million in unfavorable adjustments each on its F-16 and C-130 programs during the third quarter, highlighting the cost risks that persist under fixed-price contract structures.
General Dynamics (NYSE: GD) rose 2.6% over the same six-month period and carries a 2026 EPS growth estimate of 91.5%, though its long-term growth rate of 10.27% trails Lockheed’s by a notable margin.
For investors weighing defense exposure, Lockheed’s combination of a record order book, below-industry valuation, accelerating space business, and expanding undersea warfare capabilities presents a differentiated profile at a time of sustained global demand.
