Leidos Holdings Inc (LDOS)
NYSE:LDOS
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Leidos Holdings
(NYSE:LDOS)
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Rating:68Neutral
Price Target:
$142.00
▼(-8.49% Downside)
Action:Downgraded
Date:05/09/26
The score is driven primarily by strong underlying fundamentals (improving profitability and high-quality free cash flow) and a positive guidance raise on the latest call. These are meaningfully offset by very weak technicals (deeply oversold and trading far below major moving averages) and balance-sheet leverage, with valuation supportive but not a major tailwind.
Positive Factors
Free Cash Flow Strength
Consistently high free cash flow (FCF ~93% of net income, ~ $1.86B TTM) provides durable internal funding for buybacks, dividends, M&A and working capital. Strong cash conversion supports capital allocation flexibility and resilience through multi-year contract cycles, reducing reliance on external financing.
Negative Factors
Elevated Leverage
Leidos carries material leverage (debt ~$6.9B, debt/equity ~1.39) which constrains financial flexibility for additional bolt-on M&A or cyclical cushions. Higher leverage increases sensitivity to cash-flow fluctuations from lumpy contracts and raises refinancing and interest-rate risk over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Consistently high free cash flow (FCF ~93% of net income, ~ $1.86B TTM) provides durable internal funding for buybacks, dividends, M&A and working capital. Strong cash conversion supports capital allocation flexibility and resilience through multi-year contract cycles, reducing reliance on external financing.
Read all positive factors
Leidos Holdings Key Performance Indicators (KPIs)
Any
Revenue by Customer Type
Shows revenue distribution among different customer groups, indicating which sectors or demographics are most lucrative and where there might be potential for growth or diversification.
Shows revenue distribution among different customer groups, indicating which sectors or demographics are most lucrative and where there might be potential for growth or diversification.
Data provided by:
The Fly
The FlyLeidos Holdings (LDOS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.85B
Dividend Yield0.87%
Average Volume (3M)1.18M
Price to Earnings (P/E)15.3
Beta (1Y)0.67
Revenue Growth2.34%
EPS Growth10.44%
CountryUS
Employees47,000
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)11.03
Shares Outstanding125,785,470
10 Day Avg. Volume1,291,553
30 Day Avg. Volume1,182,507
Financial Highlights & Ratios
PEG Ratio0.84
Price to Book (P/B)4.94
Price to Sales (P/S)1.41
P/FCF Ratio14.95
Enterprise Value/Market Cap1.41
Enterprise Value/Revenue1.29
Enterprise Value/Gross Profit7.35
Enterprise Value/Ebitda9.54
Forecast
1Y Price Target
$183.70Price Target Upside18.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)12.33
Revenue Forecast (FY)$18.23B
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, ...
How the Company Makes Money
Leidos makes money primarily by delivering contracted services and solutions—most of its revenue is generated from performing work under U.S. federal government contracts and subcontracts (including the Department of Defense, intelligence agencies...
Leidos Holdings Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call conveyed a largely positive operational and financial picture: solid revenue and EPS growth, strong adjusted EBITDA margin (14%), robust cash generation, accretive M&A (Entrust, Kudu) and large defense, health and cyber pipelines. Management raised full-year guidance and emphasized long-term strategic pillars (Defense Tech, managed health, digital infrastructure & cyber, energy resilience, mission software). Offsetting items include margin pressure in Defense and Homeland (notably a ~150 bps decline in Defense margin), flat Health revenue with some VBA-related uncertainty, expected Q2 lumpiness (pull-forward risk) and a one-time insurance benefit in Q1. On balance the positive results, guidance raise and pipeline/award momentum materially outweigh the near-term challenges.Positive Updates
Revenue Growth and Strong Profitability
Q1 revenue of $4.4 billion, up 4% year-over-year (3% organic). Adjusted EBITDA of $614 million, up 2% year-over-year, with an adjusted EBITDA margin of 14%. Non-GAAP diluted EPS of $3.13, up 5% year-over-year.
Negative Updates
Defense Margin Pressure
Defense non-GAAP operating margin declined to 8.3% from 9.8% year-over-year (down ~150 basis points), driven by a development-stage fixed-price Space Wide Field of View Tranche 1 program and wind down/delay of some airborne surveillance work.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth and Strong Profitability
Q1 revenue of $4.4 billion, up 4% year-over-year (3% organic). Adjusted EBITDA of $614 million, up 2% year-over-year, with an adjusted EBITDA margin of 14%. Non-GAAP diluted EPS of $3.13, up 5% year-over-year.
Read all positive updates
Company Guidance
Leidos raised its 2026 guidance, increasing revenue by $500 million to a new range of $18.0–18.4 billion, holding adjusted EBITDA margin guidance in the mid‑13% range, nudging non‑GAAP diluted EPS up $0.05 to $12.10–$12.50, and boosting operating cash flow guidance by $50 million to about $1.8 billion — with management saying the Entrust acquisition is accretive to 2026 EPS and cash and should add greater synergy accretion in 2027. The company pointed to a strong Q1 start (revenue $4.4 billion, +4% y/y, +3% organic; adjusted EBITDA $614 million, 14% margin; non‑GAAP EPS $3.13, +5%; operating cash flow $301 million; free cash flow $270 million) but expects Q2 to be the year’s low point for revenue growth and margins; book‑to‑bill was 0.8 in the quarter (1.1x trailing 12 months). Balance sheet and capital metrics noted alongside the guidance included $6.3 billion of debt, $457 million cash, gross leverage ~2.6x, $300 million commercial paper at quarter end, $200 million of share repurchases in Q1, DSO of 59 days (normalized), and a contemplated CapEx program (Q1 CapEx $31 million versus a planned up to ~$350 million).Leidos Holdings Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
68
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.33B | 17.17B | 16.66B | 15.44B | 14.40B | 13.74B |
| Gross Profit | 3.04B | 3.03B | 2.80B | 2.24B | 2.08B | 2.01B |
| EBITDA | 2.34B | 2.41B | 2.12B | 946.00M | 1.42B | 1.48B |
| Net Income | 1.42B | 1.46B | 1.25B | 199.00M | 685.00M | 753.00M |
Balance Sheet | ||||||
| Total Assets | 15.39B | 13.49B | 13.10B | 12.70B | 13.07B | 13.26B |
| Cash, Cash Equivalents and Short-Term Investments | 457.00M | 1.20B | 943.00M | 777.00M | 516.00M | 727.00M |
| Total Debt | 6.94B | 5.93B | 5.29B | 5.20B | 5.49B | 5.67B |
| Total Liabilities | 10.32B | 8.53B | 8.64B | 8.44B | 8.72B | 8.92B |
| Stockholders Equity | 5.01B | 4.92B | 4.41B | 4.20B | 4.30B | 4.29B |
Cash Flow | ||||||
| Free Cash Flow | 1.86B | 1.63B | 1.24B | 958.00M | 857.00M | 927.00M |
| Operating Cash Flow | 1.99B | 1.75B | 1.39B | 1.17B | 986.00M | 1.03B |
| Investing Cash Flow | -2.76B | -421.00M | -142.00M | -211.00M | -313.00M | -730.00M |
| Financing Cash Flow | 374.00M | -1.13B | -1.08B | -715.00M | -865.00M | -113.00M |
Leidos Holdings Technical Analysis
Negative
155.17
Price Trends
147.52
Negative
165.47
Negative
175.64
Negative
Market Momentum
-7.20
Negative
36.29
Neutral
54.85
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 155.17 is above the 20-day moving average (MA) of 132.73, above the 50-day MA of 147.52, and below the 200-day MA of 175.64, indicating a bearish trend. The MACD of -7.20 indicates Negative momentum. The RSI at 36.29 is Neutral, neither overbought nor oversold. The STOCH value of 54.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LDOS.
Leidos Holdings Risk Analysis
Leidos Holdings disclosed 1 risk factors in its most recent earnings report. Leidos Holdings reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Leidos Holdings Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $25.00B | 11.05 | 14.79% | 1.46% | 6.55% | -3.10% | |
73 Outperform | $49.45B | 14.68 | 31.77% | 2.58% | 4.85% | 6.19% | |
68 Neutral | $15.85B | 15.25 | 29.15% | 0.87% | 2.34% | 10.44% | |
68 Neutral | $4.31B | 13.47 | 23.73% | 1.69% | -2.90% | 6.89% | |
66 Neutral | $22.63B | 14.82 | 15.03% | 2.78% | -0.55% | -3.97% | |
64 Neutral | $11.08B | 23.00 | 13.15% | ― | 9.58% | 14.11% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
LDOS
Leidos Holdings
128.12
-22.97
-15.20%
CACI
Caci International
501.13
33.86
7.25%
CTSH
Cognizant
51.81
-27.16
-34.39%
INFY
Infosys
12.08
-5.96
-33.03%
SAIC
Science Applications
101.36
-16.89
-14.28%
WIT
Wipro
2.06
-0.73
-26.03%
Leidos Holdings Corporate Events
Business Operations and StrategyShareholder Meetings
Leidos Shareholders Approve 2026 Incentive and Stock Plans
Positive
May 6, 2026
At its May 1, 2026 annual meeting, Leidos Holdings, Inc. shareholders approved the company’s 2026 Omnibus Incentive Plan and 2026 Employee Stock Purchase Plan, formalizing new equity and stock purchase frameworks designed to support employee...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Leidos Forms Joint Venture with Altaris and Analogic
Positive
Apr 15, 2026
On April 14, 2026, Leidos’ subsidiary Leidos Inc. signed a contribution and equity purchase agreement with Altaris affiliates to create a U.S.-based joint venture that combines Leidos’ Security Enterprise Solutions and Industrial Autom...
Business Operations and StrategyM&A Transactions
Leidos Closes ENTRUST Acquisition, Expands Energy Infrastructure Reach
Positive
Mar 30, 2026
On March 27, 2026, Leidos completed its $2.4 billion cash acquisition of ENTRUST Solutions Group’s parent company from Kohlberg, securing all outstanding shares and closing the previously announced stock purchase agreement. The deal, announc...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Leidos Issues Senior Notes to Fund Entrust Acquisition
Positive
Mar 3, 2026
On March 2, 2026, Leidos, Inc. issued and sold $600 million of 4.100% senior notes due 2029 and $800 million of 5.000% senior notes due 2036, raising an estimated $1.387 billion in net proceeds through an unsecured offering guaranteed by Leidos Ho...
Business Operations and StrategyPrivate Placements and Financing
Leidos Expands and Extends Revolving Credit Facility Agreement
Positive
Feb 17, 2026
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...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
Leidos Reports Strong 2025 Results and Dividend Declaration
Positive
Feb 17, 2026
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....
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.