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BAE SystemsBAESY +1.94%89 Debt-to-EBITDA is 2.05 as of Dec. 2025, which is 6% below its 10-year median of 2.18. GuruFocus rates BAESY with a GF Score™ of 89/100 and a GF Value™ of $92.32 (Fairly Valued). The stock has 2 warning signs investors should review. Among 254 Aerospace & Defense companies, BAE Systems ranks worse than 56.3% on this metric.
Debt-to-EBITDA measures a company's ability to pay off its debt.
A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt. According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.
The historical rank and industry rank for BAE Systems's Debt-to-EBITDA or its related term are showing as below:
BAESY'
s Debt-to-EBITDA Range Over the Past 10 Years
Min: 1.8 Med: 2.18 Max: 2.59
Current: 2.14
During the past 13 years, the highest Debt-to-EBITDA Ratio of BAE Systems was 2.59. The lowest was 1.80. And the median was 2.18.
BAESY's Debt-to-EBITDA is ranked worse than 56.3% of 254
companies
in the Aerospace & Defense industry
Industry Median: 1.82
vs BAESY: 2.14
BAE Systems (OTCPK:BAESY) Debt-to-EBITDA Explanation
A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt.
According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.
BAE Systems Debt-to-EBITDA Related Terms
BAE Systems Debt-to-EBITDA Historical Data
* Premium members only.
The historical data trend for BAE Systems's Debt-to-EBITDA can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Aerospace & Defense subindustry, BAE Systems's Debt-to-EBITDA, along with its competitors' market caps and Debt-to-EBITDA data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
BAE Systems Debt-to-EBITDA vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, BAE Systems's Debt-to-EBITDA distribution charts can be found below:
* The bar in red indicates where BAE Systems's Debt-to-EBITDA falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Debt-to-EBITDA, the EBITDA of the last fiscal year is used. In calculating the annualized quarterly data,
the EBITDA data used here is two times the quarterly (Dec. 2025) EBITDA data.
BAE Systems (BAESY) has a Debt-to-EBITDA of 2.05 as of Dec. 2025. Debt-to-EBITDA ratio represents the ratio of total debt to total earnings before interest, taxes, depreciation and amortization. View historical data on BAE Systems. This is near median its historical median of 2.18. Over the past decade, BAE Systems' Debt-to-EBITDA has ranged from 1.80 to 2.59. According to the industry distribution chart, BAE Systems ranks #143 out of 254 companies in the Aerospace & Defense industry, placing it in the top 56.3%.
Is BAE Systems' Debt-to-EBITDA too high?
BAE Systems' current Debt-to-EBITDA of 2.05 is near median its 10-year median of 2.18. Over the past 10 years, this metric has ranged from a low of 1.80 to a high of 2.59. The Aerospace & Defense industry median Debt-to-EBITDA is 1.82. BAE Systems' value of 2.05 is 12.6% above this industry median. Based on the distribution chart, BAE Systems ranks #143 out of 254 companies in the Aerospace & Defense industry, which is below the industry midpoint. Overall, BAE Systems has a GF Score™ of 89/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does BAE Systems' Debt-to-EBITDA compare to SPCX and GE?
According to the Aerospace & Defense industry distribution chart, BAE Systems ranks #143 out of 254 companies for Debt-to-EBITDA. This places BAE Systems in the lower half of its industry. The industry median Debt-to-EBITDA is 1.82. BAE Systems' value of 2.05 is 12.6% above this benchmark. Historically, BAE Systems' own Debt-to-EBITDA has ranged from 1.80 to 2.59 over the past decade. While the company's 10-year median is 2.18 vs. the industry median of 1.82, BAE Systems has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Debt-to-EBITDA for an Aerospace & Defense company?
The median Debt-to-EBITDA among Aerospace & Defense companies is 1.82, based on 254 companies in the industry. Companies in the top quartile (top 25%) have a Debt-to-EBITDA significantly above this median, while those in the bottom quartile fall well below. However, Debt-to-EBITDA should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. BAE Systems's current Debt-to-EBITDA of 2.05 is 12.6% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Debt-to-EBITDA mean?
A high Debt-to-EBITDA can signal that a stock is expensive relative to its fundamentals. Debt-to-EBITDA ratio represents the ratio of total debt to total earnings before interest, taxes, depreciation and amortization. View historical data on BAE Systems. For the Aerospace & Defense industry, the median Debt-to-EBITDA is 1.82 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. BAE Systems's current Debt-to-EBITDA is 2.05, which is near median its own 10-year median of 2.18. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is BAE Systems stock overvalued right now?
Based on GuruFocus' analysis, BAE Systems (BAESY) is currently considered Fairly Valued. The stock's GF Value™ is $92.32, compared to a current price of $100.99 — trading 9.4% above its estimated fair value. The current Debt-to-EBITDA is 2.05, which is near median its 10-year median of 2.18 and 12.6% above the Aerospace & Defense industry median of 1.82. BAE Systems' overall GF Score™ is 89/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Debt-to-EBITDA calculated?
Debt-to-EBITDA is calculated from a company's financial statements. For BAE Systems (BAESY), the current Debt-to-EBITDA is 2.05 as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is BAE Systems (BAESY) Overvalued in 2026?
Based on GuruFocus' analysis, BAE Systems stock appears to be overvalued.
The current stock price of $100.99 is trading 9.4% above its estimated GF Value™ of $92.32.
GuruFocus considers BAE Systems to be Fairly Valued.
Key valuation signals for BAESY:
Debt-to-EBITDA: 2.05 (near median its 10-year median of 2.18)
GF Value™: $92.32 vs. price of $100.99 (9.4% above fair value)
Industry Position: 12.6% above the Aerospace & Defense median (#143 of 254)
No single metric tells the full story. See the BAESY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
BAE Systems is a British global defense, security, and aerospace company and the largest defense contractor in Europe; it is one of six prime contractors to the US Department of Defense. For reporting purposes, the company has five operating segments: electronics systems is the group's US- and UK-based electronic warfare systems; the cyber, security, and intelligence segment supplies intelligence and security solutions to the US government; platforms and services manufactures combat vehicles and munitions and performs ship repair services to the US Defense Department; the air segment includes BAE's share of US and European air programs as well as its businesses in Saudi Arabia and Australia, and the maritime segment comprises UK land- and marine-based activities.
89GF Score
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