Leidos Holdings (LDOS) AI Stock Analysis

• Market Cap: $22.01B
• Dividend Yield: 0.87%
• Average Volume (3M): 975.19K
• Price to Earnings (P/E): 15.6
• Beta (1Y): 0.79
• Revenue Growth: 6.48%
• EPS Growth: 22.17%
• Country: US
• Employees: 47,000
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 2.76
• Shares Outstanding: 126,392,685
• 10 Day Avg. Volume: 1,313,045
• 30 Day Avg. Volume: 975,193
• PEG Ratio: 0.84
• Price to Book (P/B): 4.94
• Price to Sales (P/S): 1.41
• P/FCF Ratio: 14.95
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: 1.54
• Enterprise Value/Gross Profit: 8.72
• Enterprise Value/Ebitda: 10.99
• 1Y Price Target: $208.90
• Price Target Upside: 22.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 12.33
• Revenue Forecast (FY): $17.82B

• Rating: 72 Outperform
• Price Target: $196.00 ▲(15.37% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by improving profitability and strong cash generation, reinforced by constructive 2026 guidance and robust bookings/backlog. These positives are partly offset by weak current technical momentum (below key moving averages), near-term timing and cash-flow headwinds (award slippage and higher capex), and some uncertainty in reported recent revenue growth and debt changes.

Positive Factors

Strong cash generation

Sustained operating and free cash flow near $1.7–1.8B demonstrates high cash conversion and repeated internal funding capacity. This durable cash generation supports capex, dividends, buybacks and M&A without sole reliance on external financing, enhancing long-term capital allocation flexibility.

Robust bookings and backlog

A roughly $49B backlog and consistent bookings provide multi-period revenue visibility in government contracting, smoothing cyclicality. Durable funded backlog and pending awards underpin revenue predictability, support margin planning, and increase win probability for follow-on task orders over the medium term.

Strategic expansion into energy infrastructure

The Entrust acquisition materially scales Leidos’ utility engineering footprint and diversifies revenue into a secular grid modernization cycle. Access to broader utility clients and complementary capabilities should raise addressable market and margin mix over time, strengthening structural growth prospects.

Negative Factors

Award timing risk

Roughly $7B of award slippage creates material timing uncertainty for near-term revenue and cash flow. Because IDIQ positions aren’t recognized as backlog until task orders issue, underlying demand may be intact but revenue realization becomes dependent on award timing, weakening near-term visibility.

Balance-sheet reporting & leverage uncertainty

A dramatic, unexplained step-change in reported debt raises classification or one-off concerns that cloud assessment of leverage. Combined with planned Entrust financing that increases pro-forma leverage, this uncertainty reduces clarity on financial flexibility and elevates refinancing and covenant risk.

Higher capex reduces near-term FCF

A planned material increase in capex to scale production and classified facilities will lower free cash flow versus the prior year. While strategically targeted, higher near-term cash outlays constrain discretionary returns and debt reduction, tightening liquidity and capital allocation flexibility over the coming 2–6 months.

Leidos Holdings Business Overview & Revenue Model

Company Description

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. It operates through three segments: Defense Solutions, Civil, and Health. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the National Aeronautics and Space Administration, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. Its solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection and automation services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people worldwide, including health information management, managed health, digital transformation, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.

How the Company Makes Money

Leidos generates revenue primarily through government contracts, particularly in defense and intelligence sectors, where it provides a range of services including systems engineering, software development, and data analytics. The company also engages in commercial contracts, offering solutions in cybersecurity and healthcare. Key revenue streams include long-term contracts with federal, state, and local government agencies, as well as partnerships with major defense contractors and commercial entities. Significant factors contributing to its earnings include a robust backlog of contracts, the expansion of its services in emerging technology areas, and strategic acquisitions that enhance its capabilities and market reach.

Leidos Holdings Financial Statement Overview

Summary

Strong and improving cash generation (operating cash flow ~$1.75B and strong free cash flow) and a clear profitability rebound (higher net and operating margins). Balance sheet metrics appear to improve sharply, but the unusually large reported debt swing and the anomalous latest revenue growth figure add uncertainty and temper the score.

Income Statement

Revenue has generally trended up from ~$12.3B (2021) to ~$17.2B (2026 annual), but the latest reported revenue growth is sharply negative, indicating a potential one-off or data-quality risk that clouds the near-term trajectory. Profitability has improved meaningfully versus 2023, with net margin rebounding to ~8.5% (2026) from ~1.3% (2023) and operating margin rising to ~12.3%, suggesting stronger execution and/or mix. Gross margin has also stepped up over time (mid-14% range in 2021–2023 to ~17.7% in 2026), though overall margins remain moderate for the sector.

Balance Sheet

Leverage appears to improve dramatically in the latest period, with debt-to-equity dropping to ~0.12 (2026) versus ~1.2–1.37 in prior years, which would be a major strengthening of the balance sheet if sustained. Equity has grown to ~$4.9B while assets are ~$13.5B, supporting a sturdier capital base. A key watch-out is the large step-change in total debt (from ~$5.3B in 2025 to ~$0.6B in 2026), which is unusual and may reflect a structural change or reporting classification; that uncertainty tempers an otherwise strong leverage signal.

Cash Flow

Cash generation is solid and improving: operating cash flow rose to ~$1.75B (2026) from ~$1.39B (2025), and free cash flow is strong at ~$1.75B with very high reported growth in the latest period. Free cash flow closely matches net income in 2026 (about 1:1), indicating good earnings quality and cash conversion. The main weakness is that operating cash flow has covered only a modest portion of total debt historically (coverage below ~0.62 and closer to ~0.25–0.46 in earlier years), though this risk would be reduced if the latest lower-debt position is durable.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	17.17B	16.66B	15.44B	14.40B	13.74B
Gross Profit	3.03B	2.80B	2.24B	2.08B	2.01B
EBITDA	2.41B	2.12B	946.00M	1.42B	1.48B
Net Income	1.46B	1.25B	199.00M	685.00M	753.00M
Balance Sheet
Total Assets	13.49B	13.10B	12.70B	13.07B	13.26B
Cash, Cash Equivalents and Short-Term Investments	1.20B	943.00M	777.00M	516.00M	727.00M
Total Debt	5.93B	5.29B	5.20B	5.49B	5.67B
Total Liabilities	8.53B	8.64B	8.44B	8.72B	8.92B
Stockholders Equity	4.92B	4.41B	4.20B	4.30B	4.29B
Cash Flow
Free Cash Flow	1.63B	1.24B	958.00M	857.00M	927.00M
Operating Cash Flow	1.75B	1.39B	1.17B	986.00M	1.03B
Investing Cash Flow	-421.00M	-142.00M	-211.00M	-313.00M	-730.00M
Financing Cash Flow	-1.13B	-1.08B	-715.00M	-865.00M	-113.00M

Leidos Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 169.89
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LDOS, the sentiment is Negative. The current price of 169.89 is below the 20-day moving average (MA) of 180.87, below the 50-day MA of 185.95, and below the 200-day MA of 176.83, indicating a bearish trend. The MACD of -4.97 indicates Positive momentum. The RSI at 39.89 is Neutral, neither overbought nor oversold. The STOCH value of 38.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LDOS.

Leidos Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	80 Outperform	$56.96B	17.83	32.85%	2.58%	4.62%	1.06%
LDOS	72 Outperform	$22.01B	15.63	31.05%	0.87%	6.48%	22.17%
CACI	69 Neutral	$12.94B	25.26	13.18%	―	12.61%	11.85%
CTSH	68 Neutral	$29.20B	13.39	15.16%	1.46%	7.44%	-4.57%
WIT	66 Neutral	$23.08B	14.71	15.82%	2.78%	-1.97%	48.61%
SAIC	64 Neutral	$3.95B	11.18	23.75%	1.69%	-0.38%	31.38%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Leidos Holdings Corporate Events

Leidos Expands and Extends Revolving Credit Facility Agreement

On February 12, 2026, Leidos Holdings, Inc. and its subsidiaries entered into an amendment and restatement of their existing credit agreement, increasing the revolving credit facility from $1.0 billion to $1.5 billion and extending its maturity to five years after the restatement date. The revised facility also lowers unused commitment fees, removes a prior credit spread adjustment, and leaves the term loan facility terms largely unchanged, enhancing Leidos’ financial flexibility for working capital and general corporate purposes while maintaining covenant structures similar to the prior agreement.

The most recent analyst rating on (LDOS) stock is a Buy with a $235.00 price target. To see the full list of analyst forecasts on Leidos Holdings stock, see the LDOS Stock Forecast page.

Leidos Reports Strong 2025 Results and Dividend Declaration

Leidos Holdings reported on February 17, 2026 that full-year 2025 revenue rose 3% to $17.17 billion, with net income up 17% to $1.46 billion and diluted EPS up 21% to $11.14, driven by efficiencies on fixed-price programs and tighter cost control. Fourth-quarter 2025 revenue declined 4% to $4.21 billion due to an extra work week in 2024 and a six-week government shutdown, but earnings improved, with net income up 19%, adjusted EBITDA margin rising to 13.2%, and record quarterly operating cash flow of $495 million supporting robust buybacks and dividends.

For 2025, Leidos generated $1.75 billion in operating cash flow and $1.63 billion in free cash flow, enabling $1.15 billion in financing outflows, including share repurchases and its dividend program, while ending the year with $1.1 billion in cash and $4.6 billion in debt. The board declared a $0.43 per-share dividend payable March 31, 2026, and after quarter-end the company agreed to acquire power design firm Entrust for $2.4 billion to expand its utility client base and energy infrastructure capabilities, while securing $17.5 billion in net bookings for the year and closing 2025 with a $49.0 billion backlog, underscoring strong demand in its priority markets.

The most recent analyst rating on (LDOS) stock is a Buy with a $219.00 price target. To see the full list of analyst forecasts on Leidos Holdings stock, see the LDOS Stock Forecast page.

Leidos to Acquire ENTRUST, Expanding Energy Infrastructure Footprint

On Jan. 23, 2026, Leidos’ subsidiary Leidos, Inc. agreed to acquire ENTRUST Solutions Group (KENE Parent, Inc.) from KENE Holdings for an all-cash consideration of approximately $2.4 billion, with closing expected by the end of the second quarter of 2026 subject to customary regulatory and antitrust approvals and other closing conditions. The deal will effectively double Leidos’ energy infrastructure engineering business, expand its presence from transmission and distribution into utility gas and electric generation infrastructure markets, and broaden its base of utility clients at a time when U.S. utilities are projected to invest $1 trillion over the next decade in grid modernization; Leidos expects the transaction to be immediately accretive to revenue growth and adjusted EBITDA margin, and to fund it through a mix of new debt, cash on hand, commercial paper and a committed $1.4 billion 364-day bridge credit facility from Citi, signaling a strategic push to solidify the company’s position as a leading engineering solutions provider to the utility sector.

The most recent analyst rating on (LDOS) stock is a Hold with a $190.00 price target. To see the full list of analyst forecasts on Leidos Holdings stock, see the LDOS Stock Forecast page.