Leonardo Drs, Inc. (DRS)
NASDAQ:DRS
Want to see DRS full AI Analyst Report?
Top Page
Leonardo Drs
(NASDAQ:DRS)
Select Model
Select Model
Rating:71Outperform
Price Target:
$47.00
▲(5.45% Upside)
Action:Reiterated
Date:05/15/26
The score is driven primarily by improving financial performance (notably strong balance sheet and better recent cash generation) and a constructive earnings call with raised guidance and record backlog. Offsetting factors are a pricey valuation (high P/E, low yield) and mixed/soft technical momentum (negative MACD and only neutral RSI).
Positive Factors
Balance-sheet strength
Very low leverage and improving ROE provide durable financial flexibility. With debt-to-equity near 0.05 and equity growth over time, the company can fund program ramp, invest in R&D/capex, and return capital without needing significant external financing, lowering refinancing and covenant risk.
Negative Factors
Dependence on government budgets
A heavy reliance on U.S. defense appropriations creates structural demand risk: funding timing or cuts can delay awards, defer work or compress program scopes, reducing revenue visibility and increasing the chance of irregular cash receipts over multi-quarter horizons.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet strength
Very low leverage and improving ROE provide durable financial flexibility. With debt-to-equity near 0.05 and equity growth over time, the company can fund program ramp, invest in R&D/capex, and return capital without needing significant external financing, lowering refinancing and covenant risk.
Read all positive factors
Leonardo Drs (DRS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.98B
Dividend Yield1.04%
Average Volume (3M)957.46K
Price to Earnings (P/E)47.6
Beta (1Y)1.01
Revenue Growth10.46%
EPS Growth23.24%
CountryUS
Employees7,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)1.08
Shares Outstanding266,762,100
10 Day Avg. Volume834,273
30 Day Avg. Volume957,459
Financial Highlights & Ratios
PEG Ratio1.10
Price to Book (P/B)3.31
Price to Sales (P/S)2.48
P/FCF Ratio39.84
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue3.23
Enterprise Value/Gross Profit13.34
Enterprise Value/Ebitda26.10
Forecast
1Y Price Target
$52.86Price Target Upside18.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)1.29
Revenue Forecast (FY)$3.93B
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 Co...
How the Company Makes Money
Leonardo DRS makes money primarily by selling defense products and services to government customers—especially the U.S. Department of Defense—through contracts and subcontracts. Revenue is generated from: (1) Product sales and program deliveries: ...
Leonardo Drs Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call presented a strong financial quarter with clear operational momentum: revenue and profitability grew meaningfully (revenue +6%, adjusted EBITDA +28%, margin +210 bps), backlog hit record levels, and management raised full-year guidance across revenue, adjusted EBITDA and adjusted EPS. Positives from program execution, favorable material timing, contract wins (including a $533M DAIRCM IDIQ) and product innovation outweigh the main negatives—seasonal free cash outflow, short-term variability tied to timing of receipts and program execution, and budgetary uncertainty from Congress. Management is investing to capture demand, which pressures near-term cash conversion but supports growth and margin expansion.Positive Updates
Revenue Growth
Q1 revenue of $846 million, up 6% year-over-year, driven by tactical radars, infrared sensing and electric power & propulsion.
Negative Updates
Free Cash Flow Seasonality and Near-Term Outflow
Q1 free cash flow showed a modest outflow due to seasonality, though improved versus prior year. Full-year free cash flow conversion guidance trimmed slightly to ~75% of adjusted net earnings due to increased working capital to fund growth.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth
Q1 revenue of $846 million, up 6% year-over-year, driven by tactical radars, infrared sensing and electric power & propulsion.
Read all positive updates
Company Guidance
The company raised full‑year 2026 guidance to revenue of $3.900–$3.975 billion (implying ~7%–9% organic growth) and adjusted EBITDA of $515–$530 million, with adjusted diluted EPS now guided to $1.26–$1.30 (tax rate assumption 18.5% and diluted share count 269 million); management also targets free cash flow of roughly 75% of adjusted net earnings and expects capex to ramp to about 5% of sales for the year. This follows a strong Q1: revenue $846 million (+6% YoY), adjusted EBITDA $105 million (+28% YoY) with a 12.4% margin (+210 bps), net earnings $62 million (diluted EPS $0.23) and adjusted net earnings $69 million (adjusted diluted EPS $0.26). Segment performance included ASC adjusted EBITDA up 48% (+290 bps margin expansion) and IMS adjusted EBITDA up 8% (IMS margin ~14.6%, +90 bps); funded backlog hit company records and book‑to‑bill remained ≥1x for the 17th consecutive quarter. For Q2 management expects revenue around $900 million, adjusted EBITDA margin in the mid‑12% range and to be modestly free‑cash‑flow positive; the full‑year guide assumes improved margins, lower net interest expense and slightly higher working capital investment to fund growth.Leonardo Drs Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
86
Very Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.69B | 3.65B | 3.23B | 2.83B | 2.69B | 2.88B |
| Gross Profit | 894.00M | 847.00M | 736.00M | 648.00M | 575.00M | 547.00M |
| EBITDA | 457.00M | 441.00M | 376.00M | 313.00M | 624.00M | 293.00M |
| Net Income | 290.00M | 278.00M | 213.00M | 168.00M | 405.00M | 154.00M |
Balance Sheet | ||||||
| Total Assets | 4.21B | 4.62B | 4.18B | 3.92B | 3.68B | 3.07B |
| Cash, Cash Equivalents and Short-Term Investments | 328.00M | 647.00M | 598.00M | 467.00M | 306.00M | 240.00M |
| Total Debt | 271.00M | 470.00M | 458.00M | 497.00M | 487.00M | 490.00M |
| Total Liabilities | 1.44B | 1.89B | 1.63B | 1.60B | 1.55B | 1.48B |
| Stockholders Equity | 2.77B | 2.73B | 2.56B | 2.33B | 2.13B | 1.59B |
Cash Flow | ||||||
| Free Cash Flow | 301.00M | 227.00M | 186.00M | 145.00M | -32.00M | 118.00M |
| Operating Cash Flow | 438.00M | 366.00M | 271.00M | 205.00M | 33.00M | 178.00M |
| Investing Cash Flow | -151.00M | -154.00M | -84.00M | -59.00M | 436.00M | 39.00M |
| Financing Cash Flow | -339.00M | -163.00M | -56.00M | 15.00M | -403.00M | -38.00M |
Leonardo Drs Technical Analysis
Positive
44.57
Price Trends
43.80
Positive
42.40
Positive
40.55
Positive
Market Momentum
0.25
Negative
60.55
Neutral
95.40
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 44.57 is above the 20-day moving average (MA) of 41.81, above the 50-day MA of 43.80, and above the 200-day MA of 40.55, indicating a bullish trend. The MACD of 0.25 indicates Negative momentum. The RSI at 60.55 is Neutral, neither overbought nor oversold. The STOCH value of 95.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DRS.
Leonardo Drs Risk Analysis
Leonardo Drs disclosed 55 risk factors in its most recent earnings report. Leonardo Drs reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Leonardo Drs Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $15.97B | 17.63 | 12.13% | 0.09% | 9.48% | 18.21% | |
72 Outperform | $10.11B | 27.92 | 14.06% | 0.46% | 13.79% | 37.64% | |
71 Outperform | $11.98B | 47.63 | 10.79% | 1.04% | 10.46% | 23.24% | |
68 Neutral | $18.59B | 51.39 | 27.91% | 0.56% | 21.39% | 19.25% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $12.63B | 25.05 | 12.05% | 1.53% | 12.08% | 10.89% | |
55 Neutral | $10.53B | 242.47 | 1.26% | ― | 21.82% | 34.38% |
* Industrials Sector Average
DRS
Leonardo Drs
44.92
4.16
10.19%
HII
Huntington Ingalls
320.63
100.01
45.33%
KTOS
Kratos Defense
56.18
20.17
56.01%
MOG.A
Moog
318.94
139.63
77.87%
TXT
Textron
91.83
18.98
26.05%
BWXT
BWX Technologies
202.91
83.93
70.54%
Leonardo Drs Corporate Events
Executive/Board ChangesShareholder Meetings
Leonardo DRS Shareholders Approve Directors, Pay and Auditor
Positive
May 14, 2026
At its May 14, 2026 annual meeting of stockholders, Leonardo DRS, Inc. reported that shareholders elected all nominated directors, including Frances F. Townsend, Gail S. Baker, John A. Baylouny, Dr. Louis R. Brothers, General George W. Casey Jr., ...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Leonardo DRS Raises 2026 Outlook After Strong Q1 Results
Positive
May 5, 2026
On May 5, 2026, Leonardo DRS reported first-quarter 2026 results showing revenue of $846 million, up 6% year over year, with net earnings rising 24% to $62 million and adjusted EBITDA climbing 28%, driven by strong execution in tactical radars, in...
Executive/Board Changes
Leonardo DRS Adds Reuben Jeffery III to Board
Positive
Mar 10, 2026
On March 5, 2026, US Holding extended the term of Dr. Louis Brothers as a Class C proxy holder director on the Leonardo DRS board, reappointing him from April 1, 2026, through March 31, 2029, unless he departs earlier. His prior term had been set ...
Business Operations and StrategyFinancial Disclosures
Leonardo DRS Posts Strong Q4 and 2025 Revenue Growth
Positive
Feb 24, 2026
On February 24, 2026, Leonardo DRS reported that fourth‑quarter 2025 revenue rose to $1.1 billion and full‑year revenue to $3.6 billion, up 8% and 13% respectively, with net earnings of $102 million for the quarter and $278 million for...
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.