Telos (TLS) AI Stock Analysis

• Market Cap: $416.71M
• Dividend Yield: N/A
• Average Volume (3M): 920.00K
• 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): 0.09
• Shares Outstanding: 73,754,326
• 10 Day Avg. Volume: 736,462
• 30 Day Avg. Volume: 920,002
• PEG Ratio: -0.10
• Price to Book (P/B): 1.93
• Price to Sales (P/S): 2.27
• P/FCF Ratio: -8.72
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 3.08
• Enterprise Value/Gross Profit: 8.06
• Enterprise Value/Ebitda: -21.94
• 1Y Price Target: $8.70
• Price Target Upside: 53.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 0.06
• Revenue Forecast (FY): $199.94M

• Rating: 53 Neutral
• Price Target: $5.50 ▼(-2.65% Downside)

The score is held back primarily by weak financial fundamentals (ongoing losses, negative ROE, and deteriorating free cash flow) and bearish technical indicators. These are partially offset by a strong and improving near-term outlook from the latest earnings call (major revenue/EBITDA beats and upbeat Q4 guidance) and a supportive liquidity-related credit facility update.

Positive Factors

Robust Revenue Growth

Sustained, high single- to triple-digit revenue growth driven by Telos ID indicates strong product-market fit and expanding customer adoption in regulated markets. Over the next several quarters this supports scale economies, larger contract backlog, and expanding recurring revenue potential.

Large IDIQ Contract Access

Securing access to a broad, high-ceiling IDIQ vehicle materially increases multi-year addressable opportunity and bid pipeline with defense customers. IDIQ participation supports repeat work, faster award cadence for qualified vendors, and durable revenue visibility for years.

Disciplined Liquidity & Low Leverage

An extended credit facility and explicit liquidity requirements, combined with very low debt-to-equity, provide financial flexibility to pursue contract growth while managing working capital. This reduces refinancing risk and supports sustained investment in product and delivery capabilities.

Negative Factors

Persistent Unprofitability

Despite revenue momentum, persistent negative net margins and ROE show the firm is not converting sales into shareholder returns. Over months this constrains retained earnings, limits reinvestment capacity, and increases reliance on external capital to fund growth or cushion volatility.

Deteriorating Free Cash Flow

Severely negative FCF growth signals inconsistent cash conversion and raises sustainability concerns for funding operations, contract performance, and investments. Weaker FCF increases sensitivity to working-capital swings and may constrain strategic initiatives or require incremental financing.

Government Dependence & Mix Risk

Heavy exposure to government and regulated procurement creates timing and award-risk from shutdowns and administrative delays. Additionally, revenue-mix driven margin swings (expected quarter-to-quarter) make sustained margin improvement uncertain and complicate long-term profitability planning.

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 generates revenue through multiple streams, primarily by selling its cybersecurity software and services to government agencies and commercial enterprises. The company charges licensing fees for its software products, subscription fees for ongoing access to its services, and consulting fees for its expertise in cybersecurity. Additionally, Telos has established strategic partnerships with other technology providers and government contractors, which helps expand its market reach and enhance its service offerings. These partnerships, along with a focus on long-term contracts with federal agencies, contribute significantly to the company's financial stability and growth.

Telos Financial Statement Overview

Summary

Revenue growth is strong (23.7% TTM) and leverage is low (debt-to-equity 0.053), but the business is still underperforming on profitability (net margin -20.5%, negative ROE -24.1%) and cash flow quality (free cash flow growth -338.97%).

Income Statement

Telos has shown a significant revenue growth rate of 23.7% in the TTM, indicating a positive trajectory in sales. However, the company is struggling with profitability, as evidenced by negative net profit, EBIT, and EBITDA margins. The gross profit margin is moderate at 38.3%, but the persistent negative net profit margin of -20.5% highlights ongoing challenges in cost management and operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.053, suggesting limited leverage and financial risk. However, the negative return on equity of -24.1% indicates that the company is not generating sufficient returns on shareholders' investments, which is a concern for long-term sustainability.

Cash Flow

Telos has improved its operating cash flow to net income ratio to 0.31, showing better cash generation relative to net income. However, the free cash flow growth rate is significantly negative at -338.97%, indicating challenges in maintaining positive cash flow. The free cash flow to net income ratio of 0.57 suggests some ability to cover net income with free cash flow, but overall cash flow management remains a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	144.40M	108.27M	145.38M	216.89M	242.43M	179.92M
Gross Profit	55.28M	34.43M	52.94M	79.04M	86.03M	62.42M
EBITDA	-20.30M	-39.98M	-24.17M	-46.61M	-36.76M	19.41M
Net Income	-29.57M	-52.52M	-34.42M	-53.43M	-43.13M	1.69M
Balance Sheet
Total Assets	164.28M	158.24M	208.70M	237.40M	246.08M	188.49M
Cash, Cash Equivalents and Short-Term Investments	59.05M	54.58M	99.26M	119.31M	126.56M	106.05M
Total Debt	6.38M	10.15M	11.47M	21.69M	15.25M	17.26M
Total Liabilities	44.61M	31.10M	49.70M	65.04M	65.83M	61.38M
Stockholders Equity	119.67M	127.14M	159.00M	172.35M	180.25M	127.10M
Cash Flow
Free Cash Flow	4.61M	-28.19M	-13.89M	2.79M	-5.91M	-9.56M
Operating Cash Flow	11.68M	-25.94M	1.59M	16.51M	7.26M	-2.10M
Investing Cash Flow	-11.48M	-16.76M	-15.48M	-13.72M	-19.09M	-7.46M
Financing Cash Flow	-10.92M	-1.98M	-6.15M	-9.91M	32.35M	108.86M

Telos Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.65
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TLS, the sentiment is Positive. The current price of 5.65 is above the 20-day moving average (MA) of 5.28, below the 50-day MA of 5.69, and above the 200-day MA of 4.60, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 54.48 is Neutral, neither overbought nor oversold. The STOCH value of 80.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TLS.

Telos Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
III	69 Neutral	$291.14M	31.37	10.22%	3.03%	-5.74%	―
HCKT	65 Neutral	$555.10M	53.02	10.27%	2.41%	0.68%	-67.84%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TLS	53 Neutral	$416.71M	―	-23.73%	―	17.44%	41.97%
CNDT	47 Neutral	$310.37M	-2.08	-15.87%	―	-12.45%	-142.77%
TSSI	46 Neutral	$304.89M	56.77	13.73%	―	91.66%	7.52%
UIS	45 Neutral	$233.17M	-0.72	―	―	-4.93%	18.65%

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.