Leonardo Drs (DRS) AI Stock Analysis

• Market Cap: $12.55B
• Dividend Yield: 0.76%
• Average Volume (3M): 1.40M
• Price to Earnings (P/E): 54.1
• Beta (1Y): 1.05
• Revenue Growth: 13.58%
• EPS Growth: 25.96%
• Country: US
• Employees: 7,000
• Sector: Industrials
• Sector Strength: 89
• Industry: Aerospace & Defense
• EPS (TTM): 0.20
• Shares Outstanding: 266,049,200
• 10 Day Avg. Volume: 2,115,895
• 30 Day Avg. Volume: 1,400,262
• PEG Ratio: 0.09
• Price to Book (P/B): 1.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -85.87
• Enterprise Value/Market Cap: 0.23
• Enterprise Value/Revenue: 0.22
• Enterprise Value/Gross Profit: 3.74
• Enterprise Value/Ebitda: 1.92
• 1Y Price Target: $47.40
• Price Target Upside: 2.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 78 Outperform
• Price Target: $53.00 ▲(14.13%Upside)

Leonardo DRS's strong financial performance and positive earnings call insights drive its stock score. The bullish technical indicators further support a positive outlook, although high valuation metrics and potential supply chain challenges pose risks. The overall score reflects a favorable investment profile with caution advised on valuation.

Positive Factors

Defense Modernization

The renewed emphasis on shipbuilding, coupled with continued strong defense tech modernization spending globally, is incrementally positive for DRS.

Market Position

DRS is in a strong position to capitalize on increased focus on expanding shipbuilding capabilities and throughput.

Negative Factors

Market Valuation

At a ~21.5x EV/2026 EBITDA, DRS is currently trading at a ~3-turn premium to peers, presenting a more balanced risk-reward proposition.

Supply Chain Risk

China's ban on germanium export poses a risk to the weapon sights business, although DRS has several years worth of supply on hand.

Leonardo Drs Business Overview & Revenue Model

Company Description

Leonardo DRS (DRS) is a leading provider of defense electronics and technology solutions, primarily serving the United States military and allied nations. The company operates in sectors such as aerospace, defense, and security, offering a wide range of products and services including advanced sensors, network computing, and integrated mission systems. DRS specializes in developing cutting-edge technology solutions that enhance the capabilities and operational readiness of military forces.

How the Company Makes Money

Leonardo DRS generates revenue through the sale of its defense electronics and technology solutions to government and military organizations. The company's key revenue streams include contracts for the development and supply of advanced military equipment, such as infrared systems, electronic warfare technology, and integrated mission systems. DRS also benefits from long-term partnerships and contracts with the U.S. Department of Defense and other allied military forces, which provide a steady flow of income. Additionally, the company may engage in research and development projects funded by government grants, further contributing to its earnings.

Leonardo Drs Financial Statement Overview

Summary

Leonardo DRS presents strong financial performance with significant revenue growth and stable profitability. The company's low debt levels, strong balance sheet, and excellent cash flow generation enhance its financial robustness. Monitoring liquidity and capital allocation can further consolidate its position.

Income Statement

Leonardo DRS has shown strong revenue growth over recent years, with an increase from $2,778 million in 2020 to $3,345 million in TTM (Trailing-Twelve-Months). The gross profit margin has improved to 22.7%, reflecting efficient cost management. The EBIT margin is consistent at 9.3%, and the net profit margin is solid at 7.0%. These metrics indicate robust profitability and operational efficiency, making the income statement a strong point for the company.

Balance Sheet

The company's balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.14, indicating low leverage. The equity ratio stands at 62.8%, highlighting a strong equity base. The return on equity is healthy at 9.1%, showing effective use of shareholder funds. Overall, the balance sheet is solid, though there is room for improvement in liquidity and asset utilization.

Cash Flow

Leonardo DRS demonstrates positive cash flow dynamics with a significant increase in free cash flow to $291 million in TTM. The operating cash flow to net income ratio is 1.70, indicating strong cash generation relative to earnings. The free cash flow growth rate is impressive, highlighting the company's ability to generate surplus cash even after capital expenditures. These factors contribute to a strong cash flow position.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.35B	3.23B	2.83B	2.69B	2.88B	2.78B
Gross Profit	758.00M	736.00M	648.00M	575.00M	547.00M	494.00M
EBITDA	394.00M	376.00M	313.00M	624.00M	293.00M	229.00M
Net Income	234.00M	213.00M	168.00M	405.00M	154.00M	85.00M
Balance Sheet
Total Assets	4.10B	4.18B	3.92B	3.68B	3.07B	2.96B
Cash, Cash Equivalents and Short-Term Investments	380.00M	598.00M	467.00M	306.00M	240.00M	61.00M
Total Debt	452.00M	458.00M	497.00M	394.00M	490.00M	530.00M
Total Liabilities	1.52B	1.63B	1.60B	1.55B	1.48B	1.53B
Stockholders Equity	2.57B	2.56B	2.33B	2.13B	1.59B	1.43B
Cash Flow
Free Cash Flow	291.00M	186.00M	145.00M	-32.00M	118.00M	69.00M
Operating Cash Flow	398.00M	271.00M	205.00M	33.00M	178.00M	125.00M
Investing Cash Flow	-106.00M	-84.00M	-59.00M	436.00M	39.00M	-70.00M
Financing Cash Flow	-72.00M	-56.00M	15.00M	-403.00M	-38.00M	-80.00M

Leonardo Drs Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 46.44
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRS, the sentiment is Positive. The current price of 46.44 is above the 20-day moving average (MA) of 44.96, above the 50-day MA of 42.75, and above the 200-day MA of 35.04, indicating a bullish trend. The MACD of 1.07 indicates Negative momentum. The RSI at 59.35 is Neutral, neither overbought nor oversold. The STOCH value of 87.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DRS.

Leonardo Drs Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRS	78 Outperform	$12.55B	54.09	9.50%	0.76%	13.58%	25.96%
BWXT	75 Outperform	$13.14B	45.72	28.24%	0.69%	9.87%	14.16%
HII	72 Outperform	$9.95B	18.27	12.27%	2.13%	-1.04%	-21.80%
ERJ	68 Neutral	$11.02B	27.62	13.36%	0.33%	22.29%	51.90%
SARO	68 Neutral	$10.29B	144.52		―	16.92%	―
Sector *	65 Neutral	$10.75B	15.65	5.18%	1.92%	3.09%	-27.41%
RKLB	59 Neutral	$18.27B	―	-45.38%	―	64.98%	-10.52%

Leonardo Drs Corporate Events

Leonardo DRS Stockholders Approve Key Proposals at Meeting

On June 4, 2025, Leonardo DRS held its Annual Meeting where stockholders voted on various proposals. The election of directors saw significant support, with most nominees receiving over 250 million votes in favor. Additionally, the advisory resolution on executive compensation and the ratification of Ernst & Young LLP as the independent auditor were approved. An amendment to the company’s certificate of incorporation to remove certain supermajority voting requirements was also passed.

The most recent analyst rating on (DRS) stock is a Hold with a $30.00 price target. To see the full list of analyst forecasts on Leonardo Drs stock, see the DRS Stock Forecast page.

Leonardo DRS Reports Strong Q1 2025 Financial Results

Leonardo DRS reported strong financial results for the first quarter of 2025, ending March 31, with a 16% increase in revenue to $799 million and a 72% rise in net earnings to $50 million compared to the previous year. The company also achieved a book-to-bill ratio of 1.2x with $1 billion in bookings and an $8.6 billion backlog, reflecting robust demand for its products and services. The improved profitability and reduced cash flow usage indicate a solid start to the year, positioning the company well for future growth and shareholder returns.