Leonardo Drs (DRS) AI Stock Analysis

• Market Cap: $9.62B
• Dividend Yield: 0.7%
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): 36.7
• Beta (1Y): 1.07
• Revenue Growth: 12.27%
• EPS Growth: 33.16%
• Country: US
• Employees: 7,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.29
• Shares Outstanding: 266,026,730
• 10 Day Avg. Volume: 1,326,496
• 30 Day Avg. Volume: 1,092,424
• PEG Ratio: 1.51
• Price to Book (P/B): 3.34
• Price to Sales (P/S): 2.64
• P/FCF Ratio: 45.86
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 3.46
• Enterprise Value/Gross Profit: 14.79
• Enterprise Value/Ebitda: 28.98
• 1Y Price Target: $48.40
• Price Target Upside: 37.07% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 1.1
• Revenue Forecast (FY): $3.58B

• Rating: 68 Neutral
• Price Target: $42.00 ▲(18.95% Upside)

Leonardo DRS's strong financial performance and positive earnings call outlook are offset by bearish technical indicators and high valuation. The company's robust revenue growth and strategic leadership transitions are significant strengths, but margin pressures and supply chain challenges present risks.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for Leonardo DRS's products and services, enhancing its market position and financial stability.

Strong Backlog

An increasing backlog provides revenue visibility and stability, supporting long-term growth and operational planning.

Leadership Transition

The appointment of a new CEO can bring fresh strategic direction and innovation, potentially enhancing company performance and adaptability.

Negative Factors

Margin Pressure

Margin contraction due to increased R&D and less efficient execution could impact profitability, requiring careful cost management.

Supply Chain Challenges

Supply chain issues, particularly with critical materials, can disrupt production and delivery schedules, affecting revenue and customer satisfaction.

Government Shutdown Concerns

Prolonged government shutdowns can delay contract awards and payments, affecting cash flow and financial planning.

Leonardo Drs Business Overview & Revenue Model

Company Description

Leonardo DRS, Inc., together with its subsidiaries, provides defense products and technologies in the land, air, sea, space, cyber and security, and commercial domains for military applications. It operates in two segments, Advanced Sensing and Computing, and Integrated Mission Systems. The company offers advanced sensor technologies, including infrared systems and sensors for threat detection and situational awareness; uncooled infrared systems and brownout solutions; airborne, ground vehicle mounted, and dismounted soldier electronic warfare (EW) systems; and EW software and training systems, and intelligence solutions. It also provides computing systems for ground vehicles, ships, and submarines; network and data distribution applications; sensor systems; and networked computing infrastructure on military platform. In addition, the company offers force protection systems, such as solutions for counter-unmanned aerial systems, short-range air defense systems, and active protection systems; and power control, distribution, conversion, and propulsion systems, as well as hybrid electric drive propulsion systems, energy storage, gas turbine packages, nuclear instrumentation and controls, and thermal management and refrigeration equipment. It serves the U.S. military, aerospace and defense prime contractors, government intelligence agencies, and international military customers. The company was founded in 1969 and is based in Arlington, Virginia.

How the Company Makes Money

Leonardo DRS generates revenue primarily through government contracts and defense procurement, providing systems and solutions to the U.S. Department of Defense and allied nations. Key revenue streams include the sale of defense electronics, logistics support, and integrated systems that enhance military capabilities. Additionally, the company engages in partnerships with other defense contractors and technology firms to develop joint solutions, which can expand its market reach and enhance the value of its offerings. Contracts often include multi-year agreements, allowing for a stable revenue flow, while ongoing maintenance and support services contribute to recurring income.

Leonardo Drs Financial Statement Overview

Summary

Leonardo DRS demonstrates strong financial health with consistent revenue and profit growth, low leverage, and robust cash flow generation. However, slight pressure on operational margins warrants attention.

Income Statement

Leonardo DRS shows strong revenue growth with a TTM increase of 4.33% and consistent improvement in gross profit margin, now at 23.40%. The net profit margin has also improved to 7.43%, indicating enhanced profitability. However, the EBIT and EBITDA margins have slightly decreased compared to previous years, suggesting some operational cost pressures.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.13, indicating low leverage. Return on equity is solid at 10.22%, reflecting efficient use of equity. The equity ratio stands at 62.37%, showcasing a strong equity base relative to total assets.

Cash Flow

Leonardo DRS has demonstrated robust free cash flow growth of 12.77% in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.45, suggesting efficient conversion of income into cash. The free cash flow to net income ratio is 0.69, reflecting a healthy cash flow position relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.57B	3.23B	2.83B	2.69B	2.88B	2.78B
Gross Profit	835.00M	736.00M	648.00M	575.00M	547.00M	494.00M
EBITDA	426.00M	376.00M	313.00M	624.00M	293.00M	229.00M
Net Income	265.00M	213.00M	168.00M	405.00M	154.00M	85.00M
Balance Sheet
Total Assets	4.25B	4.18B	3.92B	3.68B	3.07B	2.96B
Cash, Cash Equivalents and Short-Term Investments	309.00M	598.00M	467.00M	306.00M	240.00M	61.00M
Total Debt	471.00M	458.00M	497.00M	487.00M	490.00M	530.00M
Total Liabilities	1.60B	1.63B	1.60B	1.55B	1.48B	1.53B
Stockholders Equity	2.65B	2.56B	2.33B	2.13B	1.59B	1.43B
Cash Flow
Free Cash Flow	265.00M	186.00M	145.00M	-32.00M	118.00M	69.00M
Operating Cash Flow	384.00M	271.00M	205.00M	33.00M	178.00M	125.00M
Investing Cash Flow	-134.00M	-84.00M	-59.00M	436.00M	39.00M	-70.00M
Financing Cash Flow	-139.00M	-56.00M	15.00M	-403.00M	-38.00M	-80.00M

Leonardo Drs Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 35.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRS, the sentiment is Negative. The current price of 35.31 is below the 20-day moving average (MA) of 39.37, below the 50-day MA of 41.41, and below the 200-day MA of 39.47, indicating a bearish trend. The MACD of -1.81 indicates Positive momentum. The RSI at 27.79 is Positive, neither overbought nor oversold. The STOCH value of 9.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DRS.

Leonardo Drs Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MOG.A	78 Outperform	$6.34B	30.39	11.32%	0.58%	4.77%	4.50%
HII	74 Outperform	$12.03B	21.19	12.39%	1.88%	2.60%	-18.22%
BWXT	73 Outperform	$18.32B	59.93	26.69%	0.49%	14.01%	10.92%
DRS	68 Neutral	$9.62B	36.67	10.35%	0.70%	12.27%	33.16%
TXT	67 Neutral	$14.06B	17.55	11.46%	0.10%	1.83%	-0.73%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KTOS	61 Neutral	$15.23B	630.37	1.20%	―	14.00%	23.78%

Leonardo Drs Corporate Events

Leonardo DRS Reports Strong Q3 2025 Growth

Leonardo DRS, Inc., headquartered in Arlington, VA, is a prominent provider of advanced defense technologies, specializing in areas such as advanced sensing, network computing, and electric power and propulsion for U.S. national security and allied forces globally.

Leonardo DRS Earnings Call: Strong Growth Amid Challenges

The recent earnings call of Leonardo DRS, Inc. conveyed a predominantly positive sentiment, highlighting strong bookings, revenue, and profit growth. The company is also undergoing strategic leadership transitions. Despite these positive developments, challenges such as margin pressure, potential impacts from a government shutdown, and supply chain issues were acknowledged as areas of concern.

Leonardo DRS Reports Strong Q3 2025 Financial Results

Leonardo DRS reported strong financial results for the third quarter of 2025, with revenue increasing by 18% year-over-year to $960 million. The company also saw a 26% rise in net earnings and a 17% increase in adjusted EBITDA. The growth was driven by strong demand across its product lines, particularly in electric power and propulsion programs. The company declared a $0.09 cash dividend per share and made strategic investments, including increasing its stake in Hoverfly Technologies to 25%.

The most recent analyst rating on (DRS) stock is a Hold with a $44.00 price target. To see the full list of analyst forecasts on Leonardo Drs stock, see the DRS Stock Forecast page.

Leonardo DRS Reports Strong Q2 2025 Results

Leonardo DRS, Inc., based in Arlington, VA, is a prominent provider of advanced defense technologies, specializing in areas such as advanced sensing, network computing, force protection, and electric power and propulsion. The company serves U.S. national security customers and allies worldwide.

Leonardo DRS Earnings Call Highlights Growth and Optimism

The recent earnings call for Leonardo DRS, Inc. painted a picture of robust growth and optimism, underscored by strong revenue and bookings performance. Despite facing challenges such as germanium supply constraints and tariff uncertainties, the company expressed confidence in its ability to sustain growth, as evidenced by its raised guidance.

Leonardo DRS Reports Strong Q2 2025 Financial Results

Leonardo DRS reported strong financial results for the second quarter of 2025, with a 10% increase in revenue to $829 million and a 42% rise in net earnings to $54 million compared to the previous year. The company also announced a $0.09 cash dividend per share to be paid on September 3, 2025, and highlighted its continued focus on disciplined execution amidst a dynamic macroeconomic environment. The results reflect healthy bookings, solid organic revenue growth, and improved profitability driven by increased demand for its advanced technologies.

The most recent analyst rating on (DRS) stock is a Hold with a $29.00 price target. To see the full list of analyst forecasts on Leonardo Drs stock, see the DRS Stock Forecast page.