Telos (TLS) AI Stock Analysis

• Market Cap: $303.87M
• Dividend Yield: N/A
• Average Volume (3M): 734.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 3.02
• Revenue Growth: 17.44%
• EPS Growth: 41.97%
• Country: US
• Employees: 504
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.06
• Shares Outstanding: 73,754,326
• 10 Day Avg. Volume: 816,471
• 30 Day Avg. Volume: 734,660
• PEG Ratio: 0.32
• Price to Book (P/B): 3.87
• Price to Sales (P/S): 2.26
• P/FCF Ratio: 12.62
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 1.78
• Enterprise Value/Gross Profit: 4.64
• Enterprise Value/Ebitda: -12.63
• 1Y Price Target: $9.00
• Price Target Upside: 110.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.1
• Revenue Forecast (FY): $195.30M

• Rating: 55 Neutral
• Price Target: $4.00 ▼(-6.54% Downside)
• Action: Reiterated Date: 03/17/26
• Date: Action: Reiterated 03/17/26

Overall score reflects a company that is still fundamentally challenged by persistent GAAP losses and weak technicals, partially offset by improved cash generation, a solid balance sheet, and notably strong, profitability-improving guidance from the latest earnings call.

Positive Factors

High revenue growth

Sustained, large revenue expansion signals strong demand for Telos’s cybersecurity services and products. Over the next 2–6 months this supports scale benefits, a growing contract pipeline and higher recurring sustainment revenue, improving long-term operating leverage.

New product commercialization

Introducing Xacta.ai is a structural product shift from pure services to software-enabled offerings. If adoption grows, it can convert project revenue into higher-margin, recurring software and managed-service streams, strengthening scalability and competitive differentiation over time.

Low leverage and extended liquidity

Very low leverage and a recently amended credit facility that extends maturity and formalizes cash covenants create a durable liquidity cushion. This reduces refinancing risk, preserves capacity to fund contracts and product investments, and supports execution over the medium term.

Negative Factors

Negative profitability

Despite revenue gains, persistent negative net margins and ROE indicate the company is not converting sales into shareholder returns. Over 2–6 months this undermines internal funding for growth and increases reliance on external capital unless operational efficiency materially improves.

Deteriorating free cash flow

A steep decline in free cash flow growth signals limited ability to self-fund investments, acquisitions or buybacks. Even with some OCF improvement versus net income, volatile FCF increases the risk of covenant pressure or higher borrowing over the coming months.

Margin pressure from revenue mix

Guidance that cash gross margins will dip from mix effects highlights structural margin risk: rapid top-line growth driven by lower-margin programs or one-time implementation work may not translate into durable operating margin gains without shifting sales toward higher-margin recurring services.

Telos Business Overview & Revenue Model

Company Description

Telos Corporation, together with its subsidiaries, provides information technology (IT) solutions and services worldwide. It provides Xacta, a premier platform for enterprise cyber risk management and security compliance automation solutions to large commercial and government enterprises; and Telos Ghost, a solution to eliminate cyber-attack surfaces by obfuscating and encrypting data, masking user identity and location, and hiding network resources, as well as provides security and privacy for intelligence gathering, cyber threat protection, securing critical infrastructure, and protecting communications and applications. The company also offers Telos Automated Message Handling System, a web-based organizational message distribution and management platform for mission-critical communications used by military field operatives; and Telos ID that provides identity trust and digital services through IDTrust360, an enterprise-class digital identity risk platform for extending cloud identity services for mobile and enterprise and custom digital identity services that reduces threats through the integration of advanced technologies that fuse biometrics, credentials, and other identity-centric data used for continuously monitor trust. In addition, it provides secure network services, including secure mobility solutions for business and government that enable remote work and minimize operational and security concern across and beyond the enterprises; and network management and defense services for operating, administrating, and defending complex enterprise networks and defensive cyber operations. It serves to the United States federal government, large commercial businesses, state and local governments, and international customers. The company was founded in 1968 and is headquartered in Ashburn, Virginia.

How the Company Makes Money

Telos makes money primarily by delivering cybersecurity and IT services—largely under contracts—where it is paid to design, implement, integrate, and operate secure systems for customers. Key revenue streams include: (1) professional and technical services (e.g., cybersecurity program support, security engineering, compliance and risk management, and systems integration) billed under contract structures that may include time-and-materials, fixed-price, or other government/enterprise contracting arrangements; (2) recurring or ongoing support revenue from operating and maintaining deployed solutions (managed services and sustainment work) where customers pay for continued service delivery over the contract period; and (3) product/software and solution revenue tied to security capabilities it provides (e.g., identity, secure mobility, network security, or related offerings) that may be sold standalone or bundled with implementation and support services. Earnings are influenced by contract wins and renewals, the mix of new implementation work versus higher-recurring sustainment work, contract performance and delivery milestones, and demand for cybersecurity compliance and secure modernization initiatives among its customer base. Specific partnership details or customer-specific revenue concentrations are null.

Telos Financial Statement Overview

Summary

Mixed fundamentals: revenue rebounded and gross margin improved, leverage is low, and 2025 operating/free cash flow turned positive. However, profitability remains structurally weak with deeply negative net margins and return on equity, and cash flow has been volatile historically.

Income Statement

Revenue has rebounded strongly in 2025 (+14.1% YoY) after a weak 2024 (-25.5%), but profitability remains the core issue. Net margins are still deeply negative in every year since 2021 (2025: -22.2%; 2024: -48.5%), and EBITDA remains negative (2025 margin: -17.1%), signaling the business has not yet reached sustainable operating scale. A positive signal is improving gross margin (2025: 37.0% vs. 31.8% in 2024), but operating losses continue to outweigh that progress.

Balance Sheet

The balance sheet is a relative strength: leverage is low and improving, with debt-to-equity at 0.06 in 2025 (down from 0.08 in 2024 and 0.13 in 2020). However, the company continues to generate negative returns for shareholders (2025 return on equity: -38.1%), reflecting ongoing net losses and raising risk that equity value could erode over time if profitability doesn’t improve.

Cash Flow

Cash flow performance improved sharply in 2025, with operating cash flow of $30.2M and free cash flow of $29.4M (vs. negative in 2024). The step-up is meaningful and suggests better working-capital or cash efficiency, even while accounting earnings remain negative. That said, cash generation has been volatile across the period (e.g., negative operating cash flow in 2024 and 2020), and 2025’s strong cash flow versus net loss implies results may still be sensitive to timing and non-cash items.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	144.40M	164.81M	108.27M	145.38M	216.89M	242.43M
Gross Profit	55.28M	61.02M	34.43M	52.94M	79.04M	86.03M
EBITDA	-20.30M	-28.26M	-39.98M	-24.17M	-46.61M	-36.76M
Net Income	-29.57M	-36.55M	-52.52M	-34.42M	-53.43M	-43.13M
Balance Sheet
Total Assets	164.28M	139.86M	158.24M	208.70M	237.40M	246.08M
Cash, Cash Equivalents and Short-Term Investments	59.05M	53.18M	54.58M	99.26M	119.31M	126.56M
Total Debt	8.60M	5.79M	10.15M	11.47M	21.69M	15.25M
Total Liabilities	44.61M	43.91M	31.10M	49.70M	65.04M	65.83M
Stockholders Equity	119.67M	95.95M	127.14M	159.00M	172.35M	180.25M
Cash Flow
Free Cash Flow	4.61M	29.44M	-28.19M	-13.89M	2.79M	-5.91M
Operating Cash Flow	11.68M	30.18M	-25.94M	1.59M	16.51M	7.26M
Investing Cash Flow	-11.48M	-8.91M	-16.76M	-15.48M	-13.72M	-19.09M
Financing Cash Flow	-10.92M	-22.66M	-1.98M	-6.15M	-9.91M	32.35M

Telos Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.28
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TLS, the sentiment is Negative. The current price of 4.28 is above the 20-day moving average (MA) of 4.16, below the 50-day MA of 4.84, and below the 200-day MA of 5.03, indicating a bearish trend. The MACD of -0.16 indicates Negative momentum. The RSI at 40.44 is Neutral, neither overbought nor oversold. The STOCH value of 34.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TLS.

Telos Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
III	66 Neutral	$189.74M	26.44	9.87%	3.03%	-5.74%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TLS	55 Neutral	$303.87M	-58.90	-24.07%	―	17.44%	41.97%
HCKT	52 Neutral	$345.94M	42.13	10.27%	2.41%	0.68%	-67.84%
TSSI	46 Neutral	$349.60M	10.94	38.06%	―	91.66%	7.52%
UIS	45 Neutral	$167.07M	2.63	126.78%	―	-4.93%	18.65%
CNDT	43 Neutral	$191.84M	-1.68	-20.84%	―	-12.45%	-142.77%

Telos Corporate Events

Telos Amends Credit Facility, Extends Liquidity Arrangements

On December 30, 2025, Telos Corporation amended its existing credit agreement with JPMorgan Chase Bank, entering into a Second Amendment that reduces the size of its revolving credit facility in light of the company’s strong liquidity position and robust cash flow generation. The revised terms set the applicable interest rates at 1.25% for ABR loans and 2.25% for term benchmark/RFR loans, with a 0.25% commitment fee, reset the revolving commitment at $15 million with the option to expand by an additional $15 million, extend the facility’s maturity to December 30, 2026, and require Telos and its subsidiaries to maintain at least $5 million in unrestricted cash and permitted investments with JPMorgan, while leaving all other terms of the original credit agreement unchanged, signaling disciplined balance sheet management and continued access to flexible liquidity for stakeholders.

The most recent analyst rating on (TLS) stock is a Buy with a $9.00 price target. To see the full list of analyst forecasts on Telos stock, see the TLS Stock Forecast page.