Leidos Holdings (LDOS) AI Stock Analysis

• Market Cap: $18.23B
• Dividend Yield: 1.1%
• Average Volume (3M): 1.31M
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.77
• Revenue Growth: 7.75%
• EPS Growth: 325.28%
• Country: US
• Employees: 47,000
• Sector: Technology
• Sector Strength: 79
• Industry: Information Technology Services
• EPS (TTM): 2.97
• Shares Outstanding: 128,718,870
• 10 Day Avg. Volume: 1,355,890
• 30 Day Avg. Volume: 1,312,840
• PEG Ratio: 3.12
• Price to Book (P/B): 4.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.35
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 0.38
• Enterprise Value/Gross Profit: 8.72
• Enterprise Value/Ebitda: 3.77
• 1Y Price Target: $174.11
• Price Target Upside: 20.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 79 Outperform
• Price Target: $171.00 ▲(18.35%Upside)

Leidos Holdings' strong earnings call performance and solid financial health are major contributors to its high overall score. While technical analysis and valuation suggest moderate opportunities and risks, the company's strategic initiatives and growth potential drive confidence in its future prospects.

Positive Factors

Contract Awards

LDOS booked $7.6B in awards during the quarter, translating to a record 1.7x quarterly book-to-bill ratio, indicating strong performance in a typically weak quarter.

Earnings

Health/Civil sales grew 8% and margin of 23.6% was a big surprise, driving a significant earnings beat.

Strategic Initiatives

The new growth initiative 'NorthStar 2030' focuses on IT modernization, transformational warfighting capabilities, and increased privatization, aligning Leidos with key future opportunities.

Negative Factors

Bookings Environment

The one negative during the quarter was the soft bookings.

Debt Ceiling Concerns

The looming debt ceiling expiration and negative rhetoric have soured sentiment on government services stocks, driving significant sector multiple contraction.

Government Services Sector

Negative sentiment afflicting the government services sector is unlikely to improve for many quarters.

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 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 demonstrates strong financial health, characterized by consistent revenue growth, improved profitability, and strengthened balance sheet metrics. The company's ability to generate strong cash flows further supports its financial stability. However, maintaining these trends while managing liabilities will be crucial for sustaining long-term growth.

Income Statement

Leidos Holdings has shown consistent revenue growth over the years, with a notable increase from $15.44 billion in 2023 to $16.66 billion in 2025, representing a 7.9% growth rate. The gross profit margin improved to 16.8% in 2025, reflecting enhanced cost management. However, the net profit margin saw a significant increase to 7.5% in 2025 from a meager 1.3% in 2023, indicating improved profitability. The EBIT and EBITDA margins also demonstrated strong growth, reaching 11% in 2025, a substantial recovery from previous lower margins, showcasing operational efficiency improvements.

Balance Sheet

The company has managed to reduce its debt significantly, with the debt-to-equity ratio decreasing from 1.24 in 2023 to 0.14 in 2025, indicating a stronger financial position. Stockholders' equity increased, leading to an improved equity ratio of 33.7% in 2025. However, total liabilities remain relatively high compared to assets, suggesting potential risks if revenue growth slows.

Cash Flow

Leidos Holdings has shown robust cash flow performance, with operating cash flow consistently above net income, indicating strong cash generation. Free cash flow improved significantly, with a 45.3% growth rate from 2023 to 2025. The operating cash flow to net income ratio is healthy at approximately 1.1 in 2025, reflecting effective cash management strategies.

Breakdown
Mar 2025	Dec 2023	Dec 2022	Dec 2021	Mar 2021
Income Statement		Total Revenue
16.66B	15.44B	14.40B	13.74B	12.30B
	Gross Profit
2.80B	2.24B	2.08B	2.01B	1.74B
	EBIT
1.83B	621.00M	1.09B	1.15B	998.00M
	EBITDA
1.83B	931.00M	1.41B	1.50B	1.26B
	Net Income Common Stockholders
1.25B	199.00M	685.00M	753.00M	628.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
943.00M	777.00M	516.00M	727.00M	524.00M
	Total Assets
13.10B	12.70B	13.07B	13.26B	12.51B
	Total Debt
5.29B	5.20B	5.49B	5.67B	5.31B
	Net Debt
4.35B	4.42B	4.97B	4.94B	4.78B
	Total Liabilities
8.64B	8.44B	8.72B	8.92B	8.64B
	Stockholders Equity
4.41B	4.20B	4.30B	4.29B	3.86B
Cash Flow		Free Cash Flow
1.24B	958.00M	857.00M	927.00M	1.15B
	Operating Cash Flow
1.39B	1.17B	986.00M	1.03B	1.33B
	Investing Cash Flow
-142.00M	-211.00M	-313.00M	-730.00M	-2.81B
	Financing Cash Flow
-1.08B	-715.00M	-865.00M	-113.00M	1.45B

Leidos Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 144.49
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 144.49 is below the 20-day moving average (MA) of 153.69, below the 50-day MA of 145.71, and below the 200-day MA of 151.74, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 40.36 is Neutral, neither overbought nor oversold. The STOCH value of 15.43 is Positive, 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
LDOS	79 Outperform	$18.23B	14.26	31.31%	1.10%	7.75%	325.28%
G	76 Outperform	$7.48B	14.55	22.21%	1.47%	7.31%	-15.86%
CACI	72 Outperform	$9.15B	20.16	13.48%	―	14.16%	22.25%
EPAM	71 Outperform	$9.66B	23.85	11.57%	―	4.72%	-3.06%
SAIC	69 Neutral	$4.73B	14.03	21.63%	1.48%	3.39%	-16.78%
Sector *	61 Neutral	$11.55B	10.41	-6.86%	2.93%	7.50%	-8.30%
DXC	46 Neutral	$2.69B	7.15	12.88%	―	-5.65%	78.20%

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.