Leidos Holdings (LDOS) AI Stock Analysis

• Market Cap: $23.40B
• Dividend Yield: 0.87%
• Average Volume (3M): 825.60K
• Price to Earnings (P/E): 17.2
• Beta (1Y): 0.84
• Revenue Growth: 6.53%
• EPS Growth: 230.23%
• Country: US
• Employees: 47,000
• Sector: Technology
• Sector Strength: 83
• Industry: Information Technology Services
• EPS (TTM): 3.21
• Shares Outstanding: 128,297,330
• 10 Day Avg. Volume: 716,430
• 30 Day Avg. Volume: 825,602
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 1.53
• Enterprise Value/Gross Profit: 8.72
• Enterprise Value/Ebitda: 11.22
• 1Y Price Target: $185.85
• Price Target Upside: 1.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 78 Outperform
• Price Target: $201.00 ▲(9.60% Upside)

Leidos Holdings receives a strong overall score driven by robust financial performance and positive earnings call outcomes. The company's strategic initiatives, including AI integration and successful acquisitions, bolster its growth outlook. While the technical indicators show bullish momentum, the valuation remains fair, supporting the stock's potential for continued appreciation.

Positive Factors

Financial Performance

Shares of Leidos, the largest provider of enterprise IT services for government and defense agencies, are trading up 6% after it reported second-quarter results above consensus and raised the midpoint of its full-year guidance.

Government Contracts

The company is expected to benefit from Department of Defense priorities, which accounts for 50% of its sales exposure.

Healthcare and Civil Sector Performance

The Health & Civil segment reported another quarter of standout performance with revenues up 8% and adjusted operating margins of 23.6%.

Negative Factors

Bookings Environment

The one negative during the quarter was the soft bookings.

Contract Challenges

Contract terminations, weak government outlays, and backlog erosion are expected to create challenges for the company.

Government Services Risk

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

Leidos Holdings Business Overview & Revenue Model

Company Description

Leidos Holdings (LDOS) is a leading global science and technology company specializing in defense, aviation, information technology, and biomedical research. With a strong focus on providing innovative solutions to government and commercial customers, Leidos operates across various sectors including defense, civil, and health markets. The company offers a diverse range of services such as systems integration, IT modernization, cybersecurity, and data analytics, aimed at enhancing operational efficiency and mission success for its clients.

How the Company Makes Money

Leidos generates revenue primarily through contracts with government agencies, including the Department of Defense (DoD), Department of Homeland Security (DHS), and other federal entities. The company's revenue model is largely based on a mix of cost-plus, fixed-price, and time-and-materials contracts. Key revenue streams include defense solutions, which encompass logistics and engineering services, and civil solutions that involve information technology and infrastructure projects. Additionally, Leidos earns income from health-related services, notably through contracts that involve biomedical research and public health initiatives. Significant partnerships with government agencies and collaborations with private sector firms enhance its ability to secure contracts and expand its service offerings, contributing to the company's overall earnings.

Leidos Holdings Financial Statement Overview

Summary

Leidos Holdings demonstrates strong financial performance with significant revenue growth and solid profitability margins. The balance sheet reflects a prudent leverage strategy, while cash flow metrics underscore effective cash management. The company is well-positioned for continued growth, though monitoring leverage and equity ratios will be crucial to maintaining financial stability.

Income Statement

Leidos Holdings demonstrates strong revenue growth with a TTM increase of 71.5%, significantly outpacing prior periods. The company maintains healthy profitability metrics, with a gross profit margin of 17.56% and a net profit margin of 8.22% in the TTM. EBIT and EBITDA margins are also robust at 11.94% and 13.65%, respectively. These figures indicate effective cost management and operational efficiency.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 1.22, reflecting a balanced approach to leveraging. Return on equity is impressive at 31.25%, indicating strong profitability relative to shareholder equity. However, the equity ratio is not explicitly provided, which could offer additional insights into asset financing.

Cash Flow

Leidos Holdings exhibits a solid cash flow position with a 10.42% growth in free cash flow. The operating cash flow to net income ratio is 0.51, suggesting efficient cash generation relative to earnings. The free cash flow to net income ratio of 0.94 highlights the company's ability to convert earnings into cash, supporting future investments and debt servicing.

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	2.33B	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	5.70B	5.29B	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	1.40B	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: 183.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 183.39 is above the 20-day moving average (MA) of 175.94, above the 50-day MA of 165.97, and above the 200-day MA of 151.75, indicating a bullish trend. The MACD of 5.13 indicates Negative momentum. The RSI at 75.68 is Negative, neither overbought nor oversold. The STOCH value of 84.08 is Negative, 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	78 Outperform	$23.40B	17.17	30.76%	0.87%	6.53%	230.23%
SAIC	78 Outperform	$5.61B	16.62	21.63%	1.24%	3.39%	-16.78%
CACI	76 Outperform	$10.63B	21.62	13.49%	―	12.64%	19.79%
INFY	75 Outperform	$72.48B	22.41	30.46%	2.95%	4.52%	-0.22%
CTSH	74 Outperform	$35.01B	14.65	16.69%	1.70%	6.34%	12.16%
WIT	73 Outperform	$30.10B	21.31	16.50%	2.94%	-1.95%	62.75%
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%

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.