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The Hypersonic Race: How Lockheed Is Driving the Future of War

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Key Takeaways

  • Lockheed has led hypersonic innovation for 60 years with programs like ARRW, CPS, and LRHW.
  • The company is refining its Mako missile for speed and affordability to win future contracts.
  • LMT's LRHW was deployed overseas for the first time in Talisman Sabre 25 with U.S. allies.

As nations across our planet are striving to strengthen their defense capabilities, hypersonic weapons are considered to be a potential game-changer in future warfare. This is due to their extreme speed and maneuverability, which threaten to outpace current defense systems. Since hypersonic weapons are primarily developed for use in missiles, Lockheed Martin Corp. ((LMT - Free Report) ), a prominent missile manufacturer, has been at the forefront of integrating this technology in the modern era battlefield.

The company has been developing highly advanced hypersonic technology for the past 60 years, with its portfolio including several next-generation hypersonic programs, such as the Air-launched Rapid Response Weapon (“ARRW”), Conventional Prompt Strike (“CPS”), and Long Range Hypersonic Weapon (“LRHW”).

Lockheed’s Mako multi-mission hypersonic missile is another game-changing weapon, offered for the U.S. Air Force’s Stand-in Attack Weapon (“SiAW”) program and representing the first generation of missiles designed entirely within a digital engineering ecosystem. Currently, LMT is exploring ways to make the Mako missile quicker and more cost-effective to attract potential customers for making this their next best choice for a hypersonic missile.

The company’s proven dominance in the expanding hypersonic market can be gauged from the fact that the U.S. Army’s third Multi-Domain Task Force successfully deployed LMT’s LHRW system last month, outside the continental U.S. for the first time, as part of Talisman Sabre 25 — a bilateral military exercise between America and Australia. This successful deployment not only highlights soaring demand for LMT’s hypersonic weapons among U.S. allies but also leads the way to future contract wins, as the company keeps working with DARPA, the U.S. Air Force, the U.S. Army, and the U.S. Navy to transition hypersonic concepts into operational reality.

Other Stocks Involved in Hypersonic

With China and Russia currently leading the hypersonic race, their western counterparts, especially the United States, is investing heftily in hypersonic technology to keep their prowess in the global defense map. This should fuel growth for U.S. defense contractors like RTX Corp. ((RTX - Free Report) ) and Northrop Grumman ((NOC - Free Report) ) (apart from LMT), which are heavily involved in the development of cutting-edge hypersonic technologies.

RTX’s dominance in hypersonic technology, particularly in the United States, is evident from its active involvement in the Hypersonic Air-breathing Weapon Concept program. This program is a joint effort by the Defense Advanced Research Projects Agency and the U.S. Air Force to demonstrate the feasibility of hypersonic air-breathing weapons. The company is also currently transitioning the Lower Tier Air and Missile Defense Sensor (LTAMDS) from prototype to production, a radar designed to detect and defeat advanced and next-generation threats, including hypersonic weapons.

On the other hand, Northrop Grumman plays a dual role in hypersonic by developing both hypersonic weapons and counter-hypersonic defense systems. Its scramjet propulsion technology is used in the U.S. military's Hypersonic Air-breathing Missile, while its Glide Phase Interceptor possesses the ability to detect, track, and intercept hypersonic threats.

The Zacks Rundown for LMT

Shares of Lockheed have risen 7.4% in the past month compared with the industry’s growth of 1.4%.

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From a valuation standpoint, LMT is currently trading at a forward 12-month earnings multiple of 16.77, a discount when stacked up with the industry average of 28.04.

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The Zacks Consensus Estimate for LMT’s near-term earnings has moved south over the past 60 days.

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The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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