Leonardo Drs (DRS) AI Stock Analysis

• Market Cap: $9.02B
• Dividend Yield: 1.06%
• Average Volume (3M): 1.14M
• Price to Earnings (P/E): 34.4
• Beta (1Y): 1.13
• 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: 626,041
• 30 Day Avg. Volume: 1,143,745
• 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: 1.37
• Enterprise Value/Revenue: 3.46
• Enterprise Value/Gross Profit: 14.79
• Enterprise Value/Ebitda: 28.98
• 1Y Price Target: $47.00
• Price Target Upside: 38.56% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 1.09
• Revenue Forecast (FY): $3.58B

• Rating: 69 Neutral
• Price Target: $37.00 ▲(9.08% Upside)

Leonardo DRS shows strong financial performance and a positive outlook from its earnings call, driving the score. However, technical indicators suggest bearish momentum, and the high P/E ratio indicates potential overvaluation, which tempers the overall score.

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. is a leading provider of advanced technology solutions primarily serving the defense and aerospace sectors. The company specializes in designing and manufacturing innovative products and systems in areas such as defense electronics, avionics, and critical communications. With a focus on enhancing military capabilities and ensuring the safety and security of personnel, DRS offers a wide range of core products including thermal imaging systems, electronic warfare solutions, and integrated mission systems, catering to both domestic and international clients.

How the Company Makes Money

Leonardo DRS generates revenue through multiple key streams, primarily from the sale of defense electronics and systems to government and military organizations. The company earns money by securing contracts with the U.S. Department of Defense and various allied nations, often through competitive bidding processes. Additionally, revenue is generated from long-term support and maintenance contracts for their products, which provide ongoing income. Strategic partnerships with other defense contractors and technology firms also contribute to revenue growth, allowing DRS to offer integrated solutions and access new markets. Furthermore, the company invests in research and development to innovate and expand its product offerings, positioning itself favorably within the defense technology landscape.

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: 33.92
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 33.92 is below the 20-day moving average (MA) of 34.06, below the 50-day MA of 38.06, and below the 200-day MA of 39.44, indicating a bearish trend. The MACD of -1.06 indicates Negative momentum. The RSI at 39.52 is Neutral, neither overbought nor oversold. The STOCH value of 59.66 is Neutral, 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
TXT	74 Outperform	$14.71B	18.36	11.46%	0.10%	1.83%	-0.73%
BWXT	73 Outperform	$16.26B	53.20	26.69%	0.56%	14.01%	10.92%
MOG.A	73 Outperform	$7.53B	32.42	12.09%	0.49%	7.11%	13.43%
DRS	69 Neutral	$9.02B	34.38	10.35%	1.06%	12.27%	33.16%
HII	69 Neutral	$11.95B	21.04	12.39%	1.72%	2.60%	-18.22%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KTOS	61 Neutral	$12.92B	622.96	1.20%	―	14.00%	23.78%

Leonardo Drs Corporate Events

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%.