Leidos Holdings (LDOS) AI Stock Analysis

• Market Cap: $22.26B
• Dividend Yield: 0.99%
• Average Volume (3M): 866.96K
• Price to Earnings (P/E): 16.4
• Beta (1Y): 0.77
• Revenue Growth: 7.75%
• EPS Growth: 325.28%
• Country: US
• Employees: 47,000
• Sector: Technology
• Sector Strength: 92
• Industry: Information Technology Services
• EPS (TTM): 3.21
• Shares Outstanding: 128,718,870
• 10 Day Avg. Volume: 919,723
• 30 Day Avg. Volume: 866,958
• PEG Ratio: 0.03
• Price to Book (P/B): 4.47
• Price to Sales (P/S): 1.18
• P/FCF Ratio: 15.86
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 1.53
• Enterprise Value/Gross Profit: 8.72
• Enterprise Value/Ebitda: 11.59
• 1Y Price Target: $182.50
• Price Target Upside: 5.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 77 Outperform
• Price Target: $168.00 ▼(-2.86% Downside)

Leidos Holdings demonstrates strong financial performance and strategic growth initiatives, as highlighted in its earnings call. While technical analysis reflects some overbought conditions, the company's valuation appears reasonable. The reaffirmation of guidance and focus on strategic pillars bolster confidence in continued growth.

Positive Factors

Cyber Business

Significant investments in its cyber business position Leidos well to win over $15 billion in pure-cyber opportunities.

Financial Performance

Shares of Leidos are trading up 6% after reporting second-quarter results above consensus and raising the midpoint of its full-year guidance.

Government Contracts

Leidos has aligned with high-priority programs under the new administration, potentially boosting future growth in areas like VA medical exams and FAA modernization.

Negative Factors

Bookings and Backlog

Soft bookings and a sequential 7% decline in backlog present potential challenges for Leidos.

DoD Insourcing Memo

There may be risk from the DoD insourcing memo, which could delay opportunities for Leidos.

Headline Risk

Analyst downgrades Leidos to Neutral due to headline risk across Government Services and a weaker bookings environment.

Leidos Holdings Business Overview & Revenue Model

Company Description

Leidos Holdings, Inc. is a leading global science and technology solutions provider that focuses on addressing critical challenges in the defense, aviation, information technology, and biomedical research sectors. The company delivers a broad range of services and solutions in systems integration, data analytics, cybersecurity, and enterprise IT modernization to both government and commercial clients worldwide. Leidos is known for its commitment to innovation, leveraging its expertise to drive advancements in technology and improve operational efficiency for its clients.

How the Company Makes Money

Leidos makes money primarily through government contracts and commercial services. Its revenue streams are diversified across three main business segments: Defense Solutions, Civil, and Health. The Defense Solutions segment provides a wide array of services including logistics, operational support, and mission systems integration primarily for the U.S. Department of Defense and allied nations. The Civil segment focuses on IT solutions, cybersecurity, and infrastructure modernization for civil agencies, including the FAA and other federal and state government entities. The Health segment offers technology solutions and services for both government and commercial healthcare sectors, including the Department of Veterans Affairs and other public health agencies. Key factors contributing to its earnings include long-term contracts, strategic partnerships, and a focus on high-demand areas such as cybersecurity and digital modernization.

Leidos Holdings Financial Statement Overview

Summary

Leidos Holdings exhibits robust financial performance with strong revenue growth, profitability, and cash flow management. The company effectively utilizes its equity to generate returns, but moderate leverage poses a potential risk. Overall, the financial metrics are solid, supporting continued growth.

Income Statement

Leidos Holdings has demonstrated strong revenue growth with a consistent upward trend in gross profit and net income, reflecting robust operational efficiency. The TTM gross profit margin stands at 17.23%, with a net profit margin of 7.87%, indicating healthy profitability levels. Additionally, the company shows a positive revenue growth rate of approximately 1.62% from the previous annual report, showcasing its ability to expand its market presence.

Balance Sheet

The balance sheet reflects moderate leverage with a debt-to-equity ratio of 1.35, indicating a balanced approach to using debt for growth. The return on equity (ROE) is solid at 31.3%, demonstrating effective use of equity capital to generate profits. However, the equity ratio of 32.25% suggests a reliance on liabilities, which could pose risks in a downturn.

Cash Flow

Leidos Holdings shows strong cash flow performance with a stable operating cash flow to net income ratio of 1.04, indicating efficient cash generation from operations. The free cash flow has grown by 4.26% year-over-year, underscoring effective capital management. The free cash flow to net income ratio of 0.97 highlights the company's ability to convert earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.05B	16.66B	15.44B	14.40B	13.74B	12.30B
Gross Profit	2.99B	2.80B	2.24B	2.08B	2.01B	1.74B
EBITDA	2.25B	2.12B	931.00M	1.41B	1.50B	1.26B
Net Income	1.40B	1.25B	199.00M	685.00M	753.00M	628.00M
Balance Sheet
Total Assets	13.55B	13.10B	12.70B	13.07B	13.26B	12.51B
Cash, Cash Equivalents and Short-Term Investments	930.00M	943.00M	777.00M	516.00M	727.00M	524.00M
Total Debt	598.00M	5.41B	5.20B	5.49B	5.67B	5.31B
Total Liabilities	8.84B	8.64B	8.44B	8.72B	8.92B	8.64B
Stockholders Equity	4.66B	4.41B	4.20B	4.30B	4.29B	3.86B
Cash Flow
Free Cash Flow	1.43B	1.24B	958.00M	857.00M	927.00M	1.15B
Operating Cash Flow	1.50B	1.39B	1.17B	986.00M	1.03B	1.33B
Investing Cash Flow	-445.00M	-142.00M	-211.00M	-313.00M	-730.00M	-2.81B
Financing Cash Flow	-890.00M	-1.08B	-715.00M	-865.00M	-113.00M	1.45B

Leidos Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 172.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 172.94 is above the 20-day moving average (MA) of 162.28, above the 50-day MA of 155.68, and above the 200-day MA of 151.44, indicating a bullish trend. The MACD of 2.02 indicates Negative momentum. The RSI at 72.72 is Negative, neither overbought nor oversold. The STOCH value of 59.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LDOS.

Leidos Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LDOS	77 Outperform	$22.26B	16.35	30.76%	0.99%	7.75%	325.28%
CACI	76 Outperform	$10.37B	22.43	13.48%	―	14.16%	22.25%
SAIC	74 Outperform	$5.40B	16.13	21.63%	1.28%	3.39%	-16.78%
G	71 Outperform	$7.41B	14.42	22.21%	1.52%	7.31%	-15.86%
DXC	68 Neutral	$2.37B	6.45	12.60%	―	-4.93%	497.03%
EPAM	65 Neutral	$8.46B	21.15	11.57%	―	4.72%	-3.06%
Sector *	57 Neutral	HK$14.02B	9.47	-2.83%	4.86%	9.29%	-48.65%

Leidos Holdings Corporate Events

Leidos Holdings Stockholders Approve Key Amendments

Leidos Holdings, Inc. held its Annual Meeting of Stockholders on May 2, 2025, where stockholders approved amendments to the company’s Certificate of Incorporation. These amendments clarify stockholders’ rights to call special meetings and limit the liability of officers as permitted by law. The meeting also saw the election of board members, approval of executive compensation, and the ratification of Deloitte & Touche LLP as the company’s independent auditor for the fiscal year ending January 2, 2026.

Leidos Holdings Reports Strong Q1 2025 Financial Results

Leidos Holdings reported strong financial results for the first quarter of fiscal year 2025, with revenues of $4.2 billion, a 7% increase year-over-year, and net income of $365 million, up 29% from the previous year. The company also announced a change in its backlog policy, which now includes estimated future revenue on task orders expected under sole source IDIQ contracts, resulting in a backlog of $46.3 billion. Leidos secured several significant contracts, including a $205 million task order with the Defense Threat Reduction Agency and a $150 million task order with the Naval Surface Warfare Center Carderock Division, highlighting its strong position in the defense and IT services market.