BAE Systems‘ (LSE: BA.) shares should be making hay right now. Profits are rising, orders are booming and the world seems to get more warlike by the day. Everything seems tailor-made for the FTSE 100’s biggest weapons maker. If only we could see the same enthusiasm towards world peace.

Yet instead of powering on, the BAE Systems’ share price has plunged 15% in the last month. Over the last year, it’s down around 3%. What’s going on?

My first thought is that investors have chased BAE as high as they dare. Over five years, the shares have soared around 250%. With a market-cap now approaching £57bn, it may have hit a ceiling for now.

So what did those results say?

Half-year results (30 July) would have lit a rocket under many other stocks. Sales rose 9% to £15.8bn while underlying operating profit climbed 11% to £1.7bn. BAE also upgraded full-year guidance, forecasting underlying operating profit growth of 10%-12%.

Best of all, its order backlog hit a record £84bn. That gives BAE considerable earnings visibility as governments ramp up defence spending.

The balance sheet looks healthy too. Net debt fell from £3.8bn to £3.2bn, although I wouldn’t get too excited about the huge improvement in free cash flow. The £1.8bn inflow, against last year’s £400m outflow, was boosted by £1.6bn of customer advances, which won’t necessarily repeat.

BAE’s also returning cash to shareholders. Its latest £500m share buyback is part of a £1.5bn three-year programme. So why’s the stock falling?

Is this FTSE 100 stock simply too expensive?

Some investors will be banking their profits. Others may be looking at the price-to-earnings (P/E) ratio of 26.6, and decide the stock is simply too expensive today.

BAE’s a quality business with excellent long-term prospects, but the market knows it. There may be plenty of growth in the pipeline, but it’s been priced in. BAE Systems has to outperform, for the shares to climb from here.

Markets are bumpy generally today. The wider aerospace and defence sector has also lost momentum, as investors rotate into lagging sectors like mining and retail.

There are risks, including supply-chain problems and production delays. And while Western governments are promising to spend more on defence, the UK’s already shown how difficult that can be in practice.

Yet brokers remain optimistic, with a consensus 12-month share price target of 2,333p. If that came through, it would see the shares rise roughly 20% from today’s 1,938p.

I expect BAE to keep growing for many years and I’m tempted to take advantage of that 15% pullback. But I wouldn’t call it a screaming Buy.

While the shares offer a better entry point than a month ago, they still aren’t cheap. I’d be tempted to wait and see if we get more weakness this month to erode that P/E further before considering them. While I wait for that, I can see plenty of cheaper growth stocks on the FTSE 100 today.

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Harvey Jones owns shares in BAE Systems.