Lockheed Martin [NYSE: LMT] has closed its acquisition of the Rapid Solutions business of Amentum, an engineering and technology solutions company.

“We’re excited to officially welcome Rapid Solutions to the Lockheed Martin team,” said Robert Lightfoot, president of Lockheed Martin Space. “Its highly skilled workforce and key radar and payload technology will play an integral part in Lockheed Martin’s ability to anticipate customer needs and maintain national security infrastructure.”

As a multi-domain provider of space and airborne mission capabilities that include intelligence, surveillance and reconnaissance technologies, the Rapid Solutions portfolio solidifies Lockheed Martin’s ability to help customers better address the threat potential. Lockheed Martin’s space-based systems, in combination with space and air radar capabilities from Rapid Solutions, address a significant mission demand within the Golden Dome for America architecture to provide customers with critical awareness and decision-making advantage.

Amid escalating global tensions and renewed geopolitical flashpoints — ranging from Eastern Europe to the Indo-Pacific — defense spending is currently under a bright spotlight. For investors, this presents a compelling opportunity in the defense sector, where industry giants like Lockheed MartinLMT and General Dynamics GD stand to benefit.

Lockheed, known for its fighter jets and missile systems, is the largest U.S. defense contractor with a broad portfolio. General Dynamics, with exposure to both commercial and defense markets, spans aerospace, marine systems and defense IT. As global defense spending rises, both firms are positioned for growth. But which stock presents a better investment opportunity today? Let’s dive deeper to find out.

Key Takeaways for LMT

Recent Achievements: The company ended the first quarter of 2025 with decent year-over-year sales growth of 4% and a solid 16.9% improvement in operating profit, which translated into a 15% enhancement in its quarterly bottom line.

Among its recent milestones, worth mentioning is Lockheed’s Sikorsky division signing a long-term agreement in April 2025 with Bristow Group Inc. to support the world’s largest S-92 helicopter fleet. The same month, LMT announced plans to acquire Amentum’s Rapid Solutions business, a proven multi-domain provider of technologies, such as airborne and space ISR, advanced communications and tactical systems. These contract wins and acquisitions are likely to strengthen LMT’s position in the defense industry and help maintain its strong quarterly performance (like its latest results).

Financial Stability: Lockheed generated cash and cash equivalent of $1.80 billion as of March 30, 2025. Its current debt was $1.64 billion, while its long-term debt totaled $18.66 billion. So, we may safely conclude that the company holds a moderate solvency position, at least in the near term. This should allow it to continue investing in new defense technologies, a critical growth catalyst for defense primes like LMT (to help maintain their competitive position in the industry).

Challenges to Note: In April 2025, the U.S. Government implemented sweeping new tariffs, including a baseline 10% on all imports, a 25% duty on steel and aluminum from all countries, and significantly higher rates on imports from select nations like Canada and Mexico. Additionally, U.S. actions concerning rare earth minerals (critical to LMT’s products), such as import restrictions and China’s export controls, may limit material availability over time.

These trade measures, along with potential retaliatory tariffs by other nations, could lead to shortages of essential raw materials and adversely impact LMT’s manufacturing capabilities and operating performance. Furthermore, U.S. sanctions on specific Turkish entities expose LMT to the risk of incurring substantial reach-forward losses tied to its involvement in the Turkish Utility Helicopter Program.

Key Takeaways for GD

Recent Achievements: The company ended the first quarter of 2025 with a decent year-over-year sales growth rate of 13.9% and a solid 22.4% improvement in operating profit. This translated into a 27.1% enhancement in its quarterly bottom line.

Among its recent milestones, worth mentioning is General Dynamics’ all-new Gulfstream G800, the world’s longest-range business aircraft, which earned type certification from the Federal Aviation Administration (FAA) and certification from the European Union Aviation Safety Agency (EASA) in April 2025. In March, the company won a contract modification worth $1 billion, allowing its Electric Boat unit to purchase long-lead-time materials for Virginia Class Block VI submarines. While such contract wins bolster GD’s backlog count, the certifications awarded for its jet should allow it to market its products commercially, both of which boost the company’s revenue prospects.

Financial Stability: General Dynamics generated a cash and cash equivalent of $1.24 billion as of March 31, 2025. Its current debt was $2.35 billion, while its long-term debt totaled $7.26 billion. So, we may safely conclude that the company holds a weak solvency position, which might restrict this defense prime’s ability to invest in technological advancement of its products, thereby limiting its long-term growth value.

Challenges to Note: A shortage in the supply of aircraft parts, ranging from small hardware like nuts and bolts to specialized items like cockpit windows and engine components, has been adversely impacting the aerospace sector. The majority of industry analysts currently expect the shortage of aircraft parts to persist throughout 2025. Such lingering supply-chain constraints may lead to a delay in the delivery of products from General Dynamics, thereby adversely impacting its future results of operations.

How Do Zacks Estimates Compare for LMT & GD?

The Zacks Consensus Estimate for Lockheed’s 2025 sales suggests a rise of 5.2% from the year-ago quarter’s reported figure, while that for its earnings per share (EPS) implies a decline of 4.1%. The stock’s bottom-line estimates have been trending downward over the past 60 days, except for 2026.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for General Dynamics’ 2025 sales implies a year-over-year improvement of 5.8%, while that for its EPS suggests a 9.4% rise. The stock’s near-term bottom-line estimates, however, have been trending southward over the past 60 days, except for the second quarter of 2025.

Image Source: Zacks Investment Research

Stock Price Performance: LMT Vs GD

LMT (up 2.8%) has underperformed GD (up 5.9%) over the past three months but has outpaced the same in the past year. Shares of LMT have surged 3%, while those of GD have lost 5.1% over the past year.

Image Source: Zacks Investment Research

Valuation of LMT More Attractive Than That of GD

LMT is trading at a forward earnings multiple of 16.91X, below GD’s 17.49X.

Image Source: Zacks Investment Research

LMT’s ROE Better Than GD

A comparative analysis of both these stocks’ Return on Equity (ROE) suggests that GD is less efficient at generating profits from its equity base than LMT.

Image Source: Zacks Investment Research

Final Call

In today’s volatile geopolitical climate, both Lockheed and General Dynamics are well-positioned to benefit from increased global defense spending.

Lockheed offers a more diversified defense portfolio, stronger return on equity and better valuation metrics, while recent acquisitions and contract wins enhance its growth prospects. General Dynamics, despite strong recent earnings and achievements in both aerospace and defense segments, faces greater solvency concerns and persistent supply-chain disruptions.

While both stocks currently carry a Zacks Rank #3 (Hold), Lockheed’s financial stability, strategic positioning and track record of operational efficiency make it the more compelling investment choice. That said, investors should monitor evolving risks and market conditions closely before making a final decision.

You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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ISR, tactical systems business acquired by Lockheed Martin

News

Dan Taylor Technology Editor Military Embedded Systems

Image via Amentum

BETHESDA, Maryland. Lockheed Martin will acquire the Rapid Solutions business of Amentum in a move aimed at expanding the company’s capabilities in airborne and space-based intelligence, surveillance, and reconnaissance (ISR), tactical systems, and advanced communications, the company announced in a statement.

Rapid Solutions specializes in multi-domain defense technologies, including electronically steered arrays and mission systems for ISR applications. The acquisition is expected to complement Lockheed Martin’s existing production and integration capabilities, the statement reads.

Once the transaction is finalized, the Rapid Solutions team will be integrated into Lockheed Martin’s Space business area, where it will contribute to ongoing national security initiatives. The company did not disclose the financial terms of the deal, which remains subject to customary closing conditions.

Lockheed Martin states that the acquisition supports its broader strategy of delivering integrated defense technologies across multiple domains and reinforces its role within the defense industrial base.

23rd April 2025. Lockheed Martin announced the signing of a definitive agreement to acquire the Rapid Solutions business of Amentum, an engineering and technology solutions company, for $360 million in cash. Rapid Solutions has proven experience as a multi-domain provider of key technologies, including airborne and space Intelligence, Surveillance and Reconnaissance (ISR), advanced communications, and tactical systems to meet the nation’s most critical security challenges. Its portfolio complements Lockheed Martin’s reputation for rapidly advancing capabilities and investment in strengthening the defense industrial base.

Image: Amentum

This acquisition of the Rapid Solutions business within Amentum, a respected organization for both its technology and talent, will enhance how we deliver essential capabilities to our customers’ critical missions, said Tahllee Baynard, vice president of Ignite at Lockheed Martin. Together, Rapid Solutions’ Electronically Steered Array and Lockheed Martin’s demonstrated production capability and discipline as a prime integrator will provide the industry with a strong cost and value proposition to foster competition and help us support national security missions.

With the addition of Amentum’s Rapid Solutions team, Lockheed Martin is staying true to its commitment to deliver customers seamless, integrated solutions with an increased sense of urgency. Its focus on driving continuous innovation across the defense industrial base is a priority, as the business looks to support and lead national security initiatives including Golden Dome for America.

Upon closing, the team will become part of the corporation’s Space business area. The transaction, which is subject to customary regulatory approvals and closing conditions, will advance Amentum’s strategy as a pure-play provider of technology-enabled solutions and accelerates its debt reduction objectives.

The divestiture of Rapid Solutions sharpens Amentum’s focus on mission critical services and reinforces our position as a global pure-play provider of advanced engineering and technology-enabled solutions, said Adam Harrison, Senior Vice President of Strategy and Corporate Development.

Rapid Solutions is a manufacturer of products aligned to national security missions. The business, which accounts for approximately 1% of Amentum’s annual Revenues and Adjusted EBITDA, manufactures ISR, advanced communications, and tactical systems to meet the nation’s most critical security challenges. Approximately 230 employees will transition to Lockheed Martin upon close of the sale.

The transaction is expected to close in the second half of 2025 and to generate approximately $325 million in after-tax proceeds. Further information will be provided during Amentum’s Second Quarter Fiscal Year 2025 earnings conference call on May 7, 2025.

About Amentum

Amentum is a global leader in advanced engineering and innovative technology solutions, trusted by the United States and its allies to address their most significant and complex challenges in science, security and sustainability. Our people apply undaunted curiosity, relentless ambition and boundless imagination to challenge convention and drive progress. Our commitments are underpinned by the belief that safety, collaboration and well-being are integral to success. Headquartered in Chantilly, Virginia, we have more than 53,000 employees in approximately 80 countries across all 7 continents.

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