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Telos
(NASDAQ:TLS)
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Rating:68Neutral
Price Target:
$5.00
▲(10.86% Upside)
Action:Reiterated
Date:08/10/26
The score is driven primarily by strong cash flow and a conservative balance sheet, reinforced by a positive earnings call with raised profitability guidance and margin-improvement initiatives. Offsetting these positives are continued GAAP losses (negative P/E) and only moderately supportive technicals (still below the 200-day average) alongside high volatility risk.
Positive Factors
Strong cash generation
Positive operating and free cash flow indicate improved cash conversion and working-capital discipline. Six consecutive quarters with FCF margins above 12% provide evidence that cash generation is becoming more durable as the business scales.
Negative Factors
Persistent GAAP losses
Telos has improved its loss profile but has not yet established sustained operating profitability. Continued GAAP losses can weaken returns on equity and may pressure the equity base over time if cash generation or margin initiatives fail to remain durable.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Positive operating and free cash flow indicate improved cash conversion and working-capital discipline. Six consecutive quarters with FCF margins above 12% provide evidence that cash generation is becoming more durable as the business scales.
Read all positive factors
Telos (TLS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$336.32M
Dividend YieldN/A
Average Volume (3M)646.25K
Price to Earnings (P/E)―
Beta (1Y)2.65
Revenue Growth65.93%
EPS Growth71.75%
CountryUS
Employees517
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)-0.21
Shares Outstanding74,736,786
10 Day Avg. Volume435,288
30 Day Avg. Volume646,255
Financial Highlights & Ratios
PEG Ratio0.32
Price to Book (P/B)3.87
Price to Sales (P/S)2.26
P/FCF Ratio12.62
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$6.00Price Target Upside33.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)0.15
Revenue Forecast (FY)$191.59M
Telos Business Overview & Revenue Model
Company Description
Telos Corporation is a global provider of information technology solutions and services. A cornerstone offering is Xacta, a leading platform for automated cyber risk management and security compliance, serving major commercial organizations and go...
How the Company Makes Money
Telos makes money by selling cybersecurity and IT products and services, with a customer base concentrated in U.S. government agencies and other security- and compliance-focused organizations. Revenue is primarily generated through contracts for c...
Telos Earnings Call Summary
Earnings Call Date:Aug 10, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 16, 2026
Earnings Call Sentiment Positive
The call was broadly positive: management reported strong top-line growth (+33% YoY), substantial margin expansion (cash gross margin 40.6%, adjusted EBITDA margin 14.4% vs 1.1% prior year), strong free cash flow (13.9% FCF margin) and executed share repurchases. Management raised full-year adjusted EBITDA and margin guidance and outlined a strategic decision to phase out low-margin software to materially improve future margins, while continuing to pursue a robust >$500M proposal pipeline. Near-term headwinds are limited and manageable — higher-than-forecast marketing/incentives, Q3 margin guidance tempered by contingency reserves and seasonality, and the revenue impact from removing low-margin resale activity — but these are framed as deliberate, margin-accretive moves.Positive Updates
Revenue Growth Above Guidance
Total company revenue increased 33% year over year to $47.7 million, exceeding guidance of $44M–$46M.
Negative Updates
Higher-Than-Expected Operating Expense vs Guidance
Adjusted operating expenses were approximately $500 thousand above guidance, primarily due to increased TSA PreCheck marketing activity and incentive compensation accruals, despite a >$800 thousand year-over-year decline.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth Above Guidance
Total company revenue increased 33% year over year to $47.7 million, exceeding guidance of $44M–$46M.
Read all positive updates
Company Guidance
Management guided Q3 revenue of $49.2M–$50.6M (midpoint implying ~6% YoY growth excluding a prior nonrecurring item), cash gross margin of 37.5%–38.5%, adjusted operating expenses roughly $400k lower YoY, and adjusted EBITDA of $6.0M–$6.8M (12.2%–13.4% margin); for full‑year 2026 they raised guidance to revenue $187M–$195M, adjusted EBITDA $23.6M–$28.6M (up from $20.6M–$28.0M) with adjusted EBITDA margin 12.6%–14.7% (≈+70–160 bps vs prior), cash gross margin 39%–40% (up from 38.2%–39.5%), and lowered adjusted OpEx by ≈$1.7M — noting the planned phase‑out beginning in Q4 of low‑margin third‑party software (≈$33M run‑rate, which reduces midpoint revenue by ~ $2.5M) should boost cash gross margin by >600 bps on a run‑rate basis, plus an expected additional ~400 bps of cash gross margin accretion in H2 2027 (combined ≈+10 percentage points).Telos Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
72
Positive
Cash Flow
81
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 193.71M | 164.81M | 108.27M | 145.38M | 216.89M | 242.43M |
| Gross Profit | 71.24M | 61.02M | 34.43M | 52.94M | 79.04M | 86.03M |
| EBITDA | -2.52M | -25.20M | -39.98M | -24.17M | -46.61M | -36.76M |
| Net Income | -15.74M | -36.55M | -52.52M | -34.42M | -53.43M | -43.13M |
Balance Sheet | ||||||
| Total Assets | 139.75M | 139.86M | 158.24M | 208.70M | 237.40M | 246.08M |
| Cash, Cash Equivalents and Short-Term Investments | 50.65M | 53.18M | 54.58M | 99.26M | 119.31M | 126.56M |
| Total Debt | 6.97M | 8.06M | 10.15M | 11.47M | 21.69M | 15.25M |
| Total Liabilities | 46.34M | 43.91M | 31.10M | 49.70M | 65.04M | 65.83M |
| Stockholders Equity | 93.41M | 95.95M | 127.14M | 159.00M | 172.35M | 180.25M |
Cash Flow | ||||||
| Free Cash Flow | 29.52M | 29.44M | -28.19M | -13.89M | 2.79M | -5.91M |
| Operating Cash Flow | 34.62M | 30.18M | -25.94M | 1.59M | 16.51M | 7.26M |
| Investing Cash Flow | -8.75M | -8.91M | -16.76M | -15.48M | -13.72M | -19.09M |
| Financing Cash Flow | -32.21M | -22.66M | -1.98M | -6.15M | -9.91M | 32.35M |
Telos Technical Analysis
Neutral
4.51
Price Trends
4.57
Negative
4.49
Positive
4.82
Negative
Market Momentum
-0.04
Negative
49.64
Neutral
67.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TLS, the sentiment is Neutral. The current price of 4.51 is above the 20-day moving average (MA) of 4.50, below the 50-day MA of 4.57, and below the 200-day MA of 4.82, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 49.64 is Neutral, neither overbought nor oversold. The STOCH value of 67.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TLS.
Telos Risk Analysis
Telos disclosed 43 risk factors in its most recent earnings report. Telos reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Telos Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $336.32M | -21.43 | -15.53% | ― | 65.93% | 71.75% | |
68 Neutral | $238.68M | 20.36 | 12.32% | 4.66% | 4.18% | 50.80% | |
67 Neutral | $275.65M | 17.05 | 22.15% | 4.94% | -9.12% | 5.60% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $246.92M | 14.24 | 19.22% | ― | -26.52% | 30.98% | |
50 Neutral | $250.39M | -1.06 | -30.45% | ― | -10.31% | -2595.28% | |
47 Neutral | $199.79M | -0.47 | 134.79% | ― | -0.61% | -405.05% |
* Technology Sector Average
TLS
Telos
4.38
-1.82
-29.35%
III
Information Services Group
4.97
0.10
2.10%
HCKT
The Hackett Group
11.09
-9.13
-45.16%
UIS
Unisys
2.63
-1.36
-34.09%
CNDT
Conduent
1.61
-1.14
-41.45%
TSSI
TSS
8.38
-6.49
-43.64%
Telos Corporate Events
Executive/Board Changes
Telos CEO John Wood Returns, Leadership Structure Restored
Positive
May 28, 2026
Telos Corporation announced that effective May 28, 2026, President, Chief Executive Officer and Chairman John B. Wood has returned from medical leave and resumed his full duties, including the chairmanship of the board. His return ends the interim...
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.