Here's How Much You'd Have If You Invested $1000 in L3Harris a Decade Ago

How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in L3Harris (LHX) ten years ago? It may not have been easy to hold on to LHX for all that time, but if you did, how much would your investment be worth today?

L3Harris' Business In-Depth

With that in mind, let's take a look at L3Harris' main business drivers.

L3Harris Technologies, Inc. was formed following the merger of L3 Technologies and Harris Corporation on Jun 29, 2019. The company is a technology-oriented aerospace and defense player that delivers advanced defense and commercial technologies across air, land, sea, space and cyber domains. From the third quarter of 2023, L3Harris added another segment to its existing three business segments, following the acquisition of Aerojet Rocketdyne in July 2023. Currently, the company reports its revenues under the following four major business segments.

Integrated Mission Systems provides complex ISR systems for large military platforms; advanced electro-optical and infrared, laser imaging and targeting sensor systems; and electrical and electronic systems and integration for maritime power and navigation solutions. In 2023, this segment’s revenues accounted for 34.1% of the company’s total revenues.

Space and Airborne Systems provides space payloads, sensors and full-mission solutions for classified, civil and commercial customers; situational awareness, optical networks and advanced wireless solutions; avionic sensors and multi-spectral situational awareness, threat warning and countermeasures capabilities for electronic warfare solutions. In 2023, this segment’s revenues accounted for 35.3% of the company’s total revenues.

Communication Systems provides tactical radio communications, SATCOM terminals and battlefield management networks; broadband secured mobile networked communication equipment and integration; weapon-mounted integrated night vision systems; and radios, applications and equipment. In 2023, this segment’s revenues accounted for 26.1% of the company’s total revenues.

Aerojet Rocketdyne (AR) segment was established following the completion of Aerojet Rocketdyne’s acquisition in July 2023. The AR segment consists of missile solutions with technologies for strategic defense, missile defense, and hypersonic and tactical systems, as well as space propulsion and power systems for national security space and exploration missions. In 2023, this segment’s revenues accounted for 5.4% of the company’s total revenues.

Corporate eliminations during 2023 amounted to $0.19 billion.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in L3Harris ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in May 2014 would be worth $2,879.77, or a 187.98% gain, as of May 9, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.

The S&P 500 rose 176.58% and the price of gold increased 72.10% over the same time frame in comparison.

Going forward, analysts are expecting more upside for LHX.

L3Harris ended the first quarter of 2024 on a bright note, with both its earnings and revenues surpassing their respective Zacks Consensus Estimate. The company continues to witness strong demand for its defensive solutions. The increased U.S. defense budget has boosted its performance. L3Harris also enjoys a strong international presence. Positive synergies from its Aerojet Rocketdyne acquisition should boost its future growth. The company’s shares have outperformed the industry in the past six months. However, the shortage of skilled labor poses a threat to L3Harris. A comparative analysis of the stock’s trailing 12-month EV/SALES ratio reflects a relatively gloomy picture. The company holds a weak solvency position. Its deteriorating financial ratio makes one skeptical about L3Harris’ ability to meet its short-term obligation.

Shares have gained 5.02% over the past four weeks and there have been 5 higher earnings estimate revisions for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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