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Leidos Holdings (LDOS)
NYSE:LDOS
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Leidos Holdings
(NYSE:LDOS)
Select Model
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Rating:80Outperform
Price Target:
$222.00
▲(15.00% Upside)
Leidos Holdings scores highly due to its strong financial performance and positive earnings call, which highlight robust growth and strategic initiatives. Technical indicators support a bullish outlook, though valuation metrics suggest the stock is fairly priced. The absence of notable corporate events does not detract from the overall positive assessment.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective strategic execution, supporting long-term business expansion.
AI and Automation Enhancements
AI integration enhances operational efficiency, reducing costs and improving service delivery, which strengthens competitive positioning.
Successful Acquisition
Strategic acquisitions expand market opportunities and capabilities, driving future revenue growth and competitive advantage.
Negative Factors
Government Efficiency Impact
Government efficiency initiatives can reduce contract volumes, impacting revenue growth and necessitating strategic adjustments.
Procurement Delays
Delays in procurement can hinder timely project execution and revenue recognition, affecting financial performance.
Debt Levels
While leverage is balanced, maintaining debt levels is crucial to avoid financial strain and ensure long-term stability.
Leidos Holdings (LDOS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.77B
Dividend Yield0.84%
Average Volume (3M)748.78K
Price to Earnings (P/E)18.3
Beta (1Y)0.83
Revenue Growth6.53%
EPS Growth230.23%
CountryUS
Employees47,000
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)3.05
Shares Outstanding128,297,330
10 Day Avg. Volume709,735
30 Day Avg. Volume748,783
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)4.47
Price to Sales (P/S)1.18
P/FCF Ratio15.86
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue1.53
Enterprise Value/Gross Profit8.72
Enterprise Value/Ebitda11.22
Forecast
1Y Price Target
$204.36Price Target Upside5.86% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
Leidos Holdings Business Overview & Revenue Model
Company DescriptionLeidos Holdings (LDOS) is a leading global science and technology company specializing in defense, aviation, information technology, and biomedical research. With a strong focus on providing innovative solutions to government and commercial customers, Leidos operates across various sectors including defense, civil, and health markets. The company offers a diverse range of services such as systems integration, IT modernization, cybersecurity, and data analytics, aimed at enhancing operational efficiency and mission success for its clients.
How the Company Makes MoneyLeidos generates revenue primarily through contracts with government agencies, including the Department of Defense (DoD), Department of Homeland Security (DHS), and other federal entities. The company's revenue model is largely based on a mix of cost-plus, fixed-price, and time-and-materials contracts. Key revenue streams include defense solutions, which encompass logistics and engineering services, and civil solutions that involve information technology and infrastructure projects. Additionally, Leidos earns income from health-related services, notably through contracts that involve biomedical research and public health initiatives. Significant partnerships with government agencies and collaborations with private sector firms enhance its ability to secure contracts and expand its service offerings, contributing to the company's overall earnings.
Leidos Holdings Key Performance Indicators (KPIs)
Leidos Holdings Earnings Call Summary
Earnings Call Date:Nov 04, 2025
(Q3-2025)
| Next Earnings Date:Feb 17, 2026
Earnings Call Sentiment Positive
Leidos demonstrated strong financial performance and growth across multiple segments, with successful contract renewals and innovative solutions driving future growth. However, the ongoing government shutdown poses challenges, alongside increased legal reserves and pressure in the Security Products business.Q3-2025 Updates
Positive Updates
Strong Financial Performance
Leidos reported a 7% increase in revenue, a 13.8% adjusted EBITDA margin, and $711 million in operating cash flow. Year-to-date, they achieved 5% revenue growth, 13% EBITDA growth, and 18% EPS growth.
Successful Contract Wins and Renewals
Leidos rewon a $0.5 billion counterterrorism contract and delivered an electronic health record system for the Department of War on time and under budget. They reported a 27% sequential increase in funded backlog and a 1.3x book-to-bill ratio.
Energy Infrastructure Growth
The energy infrastructure business grew by double-digit CAGRs and now represents over $600 million in annual revenues. Leidos' proprietary Skywire AI platform reduces project costs by 30%.
Capital Deployment and Shareholder Returns
Leidos repurchased $100 million in shares, accelerated $450 million debt repayment, and increased its quarterly dividend by 7.5%.
Strong Segment Performance
National Security and Digital revenues increased 8%, Health & Civil revenues increased 6%, and Defense Systems grew 11% year-over-year.
Negative Updates
Impact of Government Shutdown
The ongoing government shutdown has caused some delays in customer decisions, potentially affecting revenue and cash flow timing.
Legal Reserves Increase
Leidos increased its legal reserves by $24 million, which impacted their bottom line performance.
Challenges in Commercial & International Segment
The Security Products business faced moderate revenue and fee pressure due to product delivery shifts into Q4 and increased investments in AI deployment.
Company Guidance
During the Leidos Third Quarter 2025 Earnings Conference Call, CEO Tom Bell reported a 7% top-line growth with an adjusted EBITDA margin of 13.8% and operating cash flow of $711 million. Year-to-date, revenue has grown 5%, EBITDA 13%, and EPS 18%. This robust performance has allowed Leidos to raise its 2025 guidance for the second time this year, despite challenges such as the DOGE headwinds and a government shutdown. The company has maintained its revenue guidance between $17 billion and $17.25 billion, increased its adjusted EBITDA margin guidance to the high 13s, and raised its non-GAAP diluted EPS guidance to a range of $11.45 to $11.75. Additionally, Leidos has a $69 billion pipeline of near-term opportunities, with $24 billion in bids awaiting adjudication. The company also repurchased $100 million in shares and paid down $450 million in debt, improving its gross leverage ratio to 2x.Leidos Holdings Financial Statement Overview
Summary
Leidos Holdings demonstrates strong financial performance with significant revenue growth and solid profitability margins. The balance sheet reflects a prudent leverage strategy, while cash flow metrics underscore effective cash management. The company is well-positioned for continued growth, though monitoring leverage and equity ratios will be crucial to maintaining financial stability.Income Statement
Leidos Holdings demonstrates strong revenue growth with a TTM increase of 71.5%, significantly outpacing prior periods. The company maintains healthy profitability metrics, with a gross profit margin of 17.56% and a net profit margin of 8.22% in the TTM. EBIT and EBITDA margins are also robust at 11.94% and 13.65%, respectively. These figures indicate effective cost management and operational efficiency.Balance Sheet
The balance sheet shows a moderate debt-to-equity ratio of 1.22, reflecting a balanced approach to leveraging. Return on equity is impressive at 31.25%, indicating strong profitability relative to shareholder equity. However, the equity ratio is not explicitly provided, which could offer additional insights into asset financing.Cash Flow
Leidos Holdings exhibits a solid cash flow position with a 10.42% growth in free cash flow. The operating cash flow to net income ratio is 0.51, suggesting efficient cash generation relative to earnings. The free cash flow to net income ratio of 0.94 highlights the company's ability to convert earnings into cash, supporting future investments and debt servicing.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2018 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.05B | 16.66B | 15.44B | 14.40B | 13.74B | 10.19B |
| Gross Profit | 2.99B | 2.80B | 2.24B | 2.08B | 2.01B | 1.50B |
| EBITDA | 2.33B | 2.12B | 946.00M | 1.42B | 1.48B | 1.01B |
| Net Income | 1.40B | 1.25B | 199.00M | 685.00M | 753.00M | 581.00M |
Balance Sheet | ||||||
| Total Assets | 13.55B | 13.10B | 12.70B | 13.07B | 13.26B | 8.77B |
| Cash, Cash Equivalents and Short-Term Investments | 930.00M | 943.00M | 777.00M | 516.00M | 727.00M | 327.00M |
| Total Debt | 5.70B | 5.29B | 5.20B | 5.49B | 5.67B | 3.12B |
| Total Liabilities | 8.84B | 8.64B | 8.44B | 8.72B | 8.92B | 5.46B |
| Stockholders Equity | 4.66B | 4.41B | 4.20B | 4.30B | 4.29B | 3.31B |
Cash Flow | ||||||
| Free Cash Flow | 1.40B | 1.24B | 958.00M | 857.00M | 927.00M | 695.00M |
| Operating Cash Flow | 1.50B | 1.39B | 1.17B | 986.00M | 1.03B | 768.00M |
| Investing Cash Flow | -445.00M | -142.00M | -211.00M | -313.00M | -730.00M | -114.00M |
| Financing Cash Flow | -890.00M | -1.08B | -715.00M | -865.00M | -113.00M | -707.00M |
Leidos Holdings Technical Analysis
Positive
193.05
Price Trends
186.64
Positive
175.10
Positive
158.26
Positive
Market Momentum
1.08
Positive
57.93
Neutral
76.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LDOS, the sentiment is Positive. The current price of 193.05 is above the 20-day moving average (MA) of 189.95, above the 50-day MA of 186.64, and above the 200-day MA of 158.26, indicating a bullish trend. The MACD of 1.08 indicates Positive momentum. The RSI at 57.93 is Neutral, neither overbought nor oversold. The STOCH value of 76.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LDOS.
Leidos Holdings Risk Analysis
Leidos Holdings disclosed 2 risk factors in its most recent earnings report. Leidos Holdings reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Leidos Holdings Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $24.77B | 18.26 | 30.76% | 0.84% | 6.53% | 230.23% | |
| ― | $35.10B | 16.86 | 14.50% | 1.72% | 7.44% | -4.57% | |
| ― | $12.46B | 24.91 | 13.14% | ― | 12.61% | 11.85% | |
| ― | $69.53B | 20.79 | 29.15% | 3.17% | 4.62% | 1.06% | |
| ― | $28.37B | 17.39 | 16.39% | 3.17% | -1.97% | 48.61% | |
| ― | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
| ― | $4.21B | 11.05 | 25.40% | 1.62% | 2.23% | 48.38% |
* Technology Sector Average
LDOS
Leidos Holdings
193.05
4.97
2.64%
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2.61
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Leidos Holdings Corporate Events
Leidos Holdings Inc. Reports Strong Q2 2025 Results
Aug 6, 2025
Leidos Holdings Inc., a leader in the technology and defense sector, is renowned for providing innovative solutions to government and commercial clients, focusing on digital transformation and mission-critical services.
Leidos Holdings Inc. Earnings Call Highlights Growth
Aug 6, 2025
Leidos Holdings Inc. recently held its earnings call, which was marked by an overall positive sentiment. The company showcased strong financial performance, increased guidance, and strategic initiatives that align with government funding priorities. Despite facing challenges such as procurement delays and headwinds from the Department of Government Efficiency (DOGE), Leidos remains confident in its growth trajectory due to proactive measures and a robust pipeline.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.