Leonardo Drs (DRS) AI Stock Analysis

• Market Cap: $10.78B
• Dividend Yield: 0.65%
• Average Volume (3M): 997.70K
• Price to Earnings (P/E): 43.5
• Beta (1Y): 1.05
• Revenue Growth: 11.43%
• EPS Growth: 32.31%
• Country: US
• Employees: 7,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.23
• Shares Outstanding: 266,123,630
• 10 Day Avg. Volume: 1,242,712
• 30 Day Avg. Volume: 997,700
• 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: 1.18
• Enterprise Value/Revenue: 3.71
• Enterprise Value/Gross Profit: 16.03
• Enterprise Value/Ebitda: 31.04
• 1Y Price Target: $49.00
• Price Target Upside: 18.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 69 Neutral
• Price Target: $44.00 ▲(6.51% Upside)

Leonardo DRS's strong financial performance and positive earnings call are significant strengths, driving the overall score. However, technical analysis and valuation concerns, such as high P/E ratio and bearish momentum, moderate the overall outlook.

Positive Factors

Revenue Growth

The increased revenue growth expectations indicate strong demand and effective market positioning, supporting long-term business expansion and stability.

Strong Bookings and Backlog

A robust backlog and strong bookings reflect sustained demand and provide revenue visibility, underpinning future financial performance and strategic planning.

Positive Defense Funding Environment

Increased defense funding offers growth opportunities, enhancing Leonardo DRS's ability to secure new contracts and expand its market share in the defense sector.

Negative Factors

Germanium Supply Chain Challenges

Supply chain constraints for germanium could impact production costs and delivery timelines, potentially affecting profitability and operational efficiency.

Tariff and Trade Risks

Trade risks could lead to increased costs and supply disruptions, impacting the company's ability to maintain competitive pricing and stable supply chains.

M&A Market Pressures

Rising acquisition costs may limit strategic growth through M&A, affecting the company's ability to expand its capabilities and market presence efficiently.

Leonardo Drs Business Overview & Revenue Model

Company Description

Leonardo DRS (DRS) is a leading provider of advanced technology solutions for the defense, security, and commercial markets. The company operates primarily in two sectors: Defense Systems and Commercial Products. Its core offerings include a wide range of products such as electronic warfare systems, sensor solutions, and power and thermal management technologies, which are critical for military and aerospace applications. DRS is dedicated to delivering innovative technologies that enhance the operational effectiveness and safety of its customers.

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 performance with robust revenue growth, healthy profit margins, and effective cost management. The balance sheet shows low leverage and strong equity, while cash flows are solid, indicating efficient cash management.

Income Statement

Leonardo DRS shows strong revenue growth with a TTM (Trailing-Twelve-Months) increase of 5.8% compared to previous annual data. Gross profit margin and net profit margin are healthy, indicating effective cost management and profitability. The EBIT margin and EBITDA margin are also robust, further supporting financial health and operational efficiency.

Balance Sheet

The balance sheet reflects solid equity, with a debt-to-equity ratio of 0.14, indicating low financial leverage and a strong equity position. The return on equity is commendable, showcasing effective use of shareholders' funds. The equity ratio suggests a stable asset base, though there is room for improvement in asset efficiency.

Cash Flow

Leonardo DRS demonstrates solid cash flow management with a significant increase in free cash flow over the TTM period. The operating cash flow to net income ratio is favorable, highlighting strong cash generation from operations. Free cash flow to net income ratio is healthy, indicating good cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.42B	3.23B	2.83B	2.69B	2.88B	2.78B
Gross Profit	792.00M	736.00M	648.00M	575.00M	547.00M	494.00M
EBITDA	409.00M	376.00M	313.00M	624.00M	293.00M	229.00M
Net Income	250.00M	213.00M	168.00M	405.00M	154.00M	85.00M
Balance Sheet
Total Assets	4.08B	4.18B	3.92B	3.68B	3.07B	2.96B
Cash, Cash Equivalents and Short-Term Investments	278.00M	598.00M	467.00M	306.00M	240.00M	61.00M
Total Debt	472.00M	458.00M	497.00M	487.00M	490.00M	530.00M
Total Liabilities	1.48B	1.63B	1.60B	1.55B	1.48B	1.53B
Stockholders Equity	2.60B	2.56B	2.33B	2.13B	1.59B	1.43B
Cash Flow
Free Cash Flow	235.00M	186.00M	145.00M	-32.00M	118.00M	69.00M
Operating Cash Flow	336.00M	271.00M	205.00M	33.00M	178.00M	125.00M
Investing Cash Flow	-100.00M	-84.00M	-59.00M	436.00M	39.00M	-70.00M
Financing Cash Flow	-107.00M	-56.00M	15.00M	-403.00M	-38.00M	-80.00M

Leonardo Drs Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 41.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRS, the sentiment is Neutral. The current price of 41.31 is below the 20-day moving average (MA) of 42.55, below the 50-day MA of 42.15, and above the 200-day MA of 39.38, indicating a neutral trend. The MACD of -0.71 indicates Positive momentum. The RSI at 46.54 is Neutral, neither overbought nor oversold. The STOCH value of 34.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DRS.

Leonardo Drs Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HII	―	$11.77B	22.46	11.59%	1.88%	-1.75%	-29.19%
MOG.A	―	$6.73B	32.21	11.32%	0.54%	4.77%	4.50%
BWXT	―	$18.58B	63.42	26.97%	0.49%	10.13%	10.04%
DRS	―	$10.78B	43.54	9.99%	0.65%	11.43%	32.31%
TXT	―	$14.31B	17.87	11.46%	0.10%	1.83%	-0.73%
KTOS	―	$15.39B	972.96	0.88%	―	7.76%	40.33%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Leonardo Drs Corporate Events

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.