Raytheon's stock rockets to new highs. Image source: Getty Images. In a week of strong earnings reports, Raytheon (NYSE: RTN) stood out for its exceptional strength. Last week, Raytheon released its fiscal Q2 2016 numbers, and there was very little for investors to complain about. And in fact, they didn't complain at all. Raytheon stock closed the week up 3.5%. For Q2, Raytheon reported: Quarterly sales of $6 billion, up 3% year over year. 480 basis points' worth of improvement in operating margin, which came in at 15.9%. Profit per share of $2.38, 44% better than in last year's Q2 and well ahead of analyst estimates . $834 million in cumulative free cash flow for the first six months of the year, up from $289 million in H1 2015. CEO Thomas A. Kennedy characterized the quarter as "strong ... with bookings, sales, operating margin, earnings per share, and cash flow all ahead of our expectations." Based largely on these results, Kennedy decided to raise guidance for the rest of this year as well. As of this date, Raytheon now expects to earn somewhere between $7.13 and $7.33 per share in profit, and to produce positive cash from operations of anywhere from $2.8 billion to $3.1 billion -- about $100 million more than previously anticipated. Valuing Raytheon Assuming capital spending continues to track where it's been heading in recent quarters -- roughly $500 million per annum -- that implies that by year end, Raytheon's operations could have churned out as much as $2.6 billion in real cash profit -- as much as a third better than what it produced last year. Weighed against the stock's $41.6 billion market capitalization, that works out to only a price-to-free cash flow ratio of 16, which doesn't seem unreasonable at the rate the stock is growing earnings right now. At the same time, however, it's worth pointing out that few analysts expect Raytheon to be able to maintain this pace. According to data from S&P Global Market Intelligence, the consensus on Wall Street is that Raytheon's earnings growth is due for an abrupt slowdown and will average less than 6% annually over the next five years. Even factoring in the stock's respectable 2.1% dividend yield, that adds up to less than 8% total return on investment -- and suggests that at 16 times free cash flow, the stock remains very richly valued indeed. So what are the chances Raytheon can grow faster than 6%? All systems go for growth Well, judging from what management told us last week, those chances don't look too bad. In addition to raising guidance for this year, Raytheon noted that it scored a book-to-bill ratio of 1.18 in Q2, taking in 18% more orders for new goods and services, than it billed as revenues collected in the quarter. The influx of new business added $816 million worth of future revenue (relative to Q2 2015's tally) to Raytheon's backlog of work to be done. And the vast majority of that work is already fully funded by Congress. The company's funded backlog number grew by $803 million. On the other hand, Raytheon's backlog was pretty big already -- $34.5 billion at this time last year. All the new business added in Q2 still adds up to only 2% growth in total backlog. And whether that will be enough to push Raytheon's growth rate past 6% remains an open question. At the very worst, though, even if analysts' growth fears do prove to be well-founded, Raytheon's got plenty of work piled up already to keep itself busy for the next 18 months or so. This company may not grow as fast as we'd like, but Raytheon's business is not going away anytime soon. A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. You can find him on Motley Fool CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 309 out of more than 75,000 rated members. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.