Telos (TLS) AI Stock Analysis

• Market Cap: $502.38M
• Dividend Yield: N/A
• Average Volume (3M): 1.21M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.84
• Revenue Growth: -13.76%
• EPS Growth: -75.18%
• Country: US
• Employees: 504
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): -0.03
• Shares Outstanding: 72,703,010
• 10 Day Avg. Volume: 950,850
• 30 Day Avg. Volume: 1,206,950
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.37
• Enterprise Value/Revenue: 1.58
• Enterprise Value/Gross Profit: 4.86
• Enterprise Value/Ebitda: -4.11
• 1Y Price Target: $5.46
• Price Target Upside: -20.98% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 58 Neutral
• Price Target: $6.00 ▼(-13.17% Downside)

Telos's overall stock score is primarily driven by the strong positive outlook from the recent earnings call, which highlights significant revenue growth and improved cash flow. However, the financial performance remains a major concern due to persistent losses and negative cash flows. The technical analysis indicates strong bullish momentum, but the valuation is unattractive due to a negative P/E ratio and lack of dividend yield.

Positive Factors

Revenue Growth

The 26% revenue growth in Q2 indicates strong demand for Telos's services, particularly in the Security Solutions segment, suggesting a robust market position and potential for sustained growth.

Cash Flow Improvement

Positive free cash flow reflects improved operational efficiency and financial health, enhancing Telos's ability to invest in growth opportunities and maintain liquidity.

FedRAMP High Authorization

Achieving FedRAMP High Authorization strengthens Telos's competitive edge in government contracts, potentially boosting future revenue from secure cloud services.

Negative Factors

Declining Revenue

Persistent revenue decline poses a risk to Telos's long-term growth and market position, necessitating strategic adjustments to reverse this trend.

Negative Cash Flow

Negative operating cash flow limits Telos's financial flexibility, potentially impacting its ability to fund operations and strategic initiatives.

Profitability Challenges

Ongoing profitability issues, indicated by negative margins, could hinder Telos's ability to sustain operations and invest in future growth.

Telos Business Overview & Revenue Model

Company Description

Telos (TLS) is a technology company that specializes in providing secure communications and cybersecurity solutions. Operating primarily in the information technology sector, Telos develops advanced products and services that cater to government and commercial clients, focusing on safeguarding sensitive data and enhancing network security. Its core offerings include identity management, secure communications platforms, and cloud-based cybersecurity solutions designed to protect against evolving threats in the digital landscape.

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

Telos faces significant financial challenges, with declining revenues, persistent losses, and negative cash flows. While the company maintains a low leverage ratio, the negative return on equity and cash flow issues highlight the need for strategic improvements to achieve financial stability and growth.

Income Statement

Telos has been experiencing declining revenue over the past few years, with a slight recovery in the TTM period. However, the company continues to face significant profitability challenges, as evidenced by negative net profit margins and EBIT margins. The gross profit margin remains relatively stable, but the overall financial health is impacted by consistent net losses.

Balance Sheet

The balance sheet shows a low debt-to-equity ratio, indicating conservative leverage. However, the return on equity is negative, reflecting ongoing losses and a declining equity base. The equity ratio remains stable, suggesting a solid asset base relative to equity.

Cash Flow

Telos's cash flow situation is concerning, with negative operating cash flow and declining free cash flow growth. The free cash flow to net income ratio is positive in the TTM period, but overall cash flow management remains a challenge, impacting liquidity and operational flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	116.74M	108.27M	145.38M	216.89M	242.43M	179.92M
Gross Profit	37.88M	34.43M	52.94M	79.04M	86.03M	62.42M
EBITDA	-44.78M	-39.98M	-24.17M	-46.61M	-36.76M	19.41M
Net Income	-55.51M	-52.52M	-34.42M	-53.43M	-43.13M	1.69M
Balance Sheet
Total Assets	165.04M	158.24M	208.70M	237.40M	246.08M	183.82M
Cash, Cash Equivalents and Short-Term Investments	57.00M	54.58M	99.26M	119.31M	126.56M	106.05M
Total Debt	6.96M	10.15M	11.47M	21.69M	15.25M	17.26M
Total Liabilities	46.63M	31.10M	49.70M	65.04M	65.83M	56.71M
Stockholders Equity	118.41M	127.14M	159.00M	172.35M	180.25M	127.10M
Cash Flow
Free Cash Flow	-2.81M	-28.19M	-13.89M	2.79M	-5.91M	-9.56M
Operating Cash Flow	-4.54M	-25.94M	1.59M	16.51M	7.26M	-2.10M
Investing Cash Flow	-11.77M	-16.76M	-15.48M	-13.72M	-19.09M	-7.46M
Financing Cash Flow	-6.79M	-1.98M	-6.15M	-9.91M	32.35M	108.86M

Telos Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.91
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 6.91 is above the 20-day moving average (MA) of 6.69, above the 50-day MA of 5.13, and above the 200-day MA of 3.47, indicating a bullish trend. The MACD of 0.49 indicates Positive momentum. The RSI at 61.15 is Neutral, neither overbought nor oversold. The STOCH value of 75.34 is Neutral, 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	287.73M	36.90	2.95%	3.02%	-9.86%	―
TSSI	68 Neutral	500.91M	49.65	83.72%	―	328.80%	339.87%
TLS	58 Neutral	$502.38M	―	-41.49%	―	-13.76%	-75.18%
CSPI	52 Neutral	121.98M	-70.36	-3.28%	0.97%	-0.37%	-161.02%
DMRC	44 Neutral	213.13M	-5.37	-84.66%	―	-8.07%	7.66%
TTEC	40 Underperform	159.44M	-6.11	-9.26%	―	-8.21%	91.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Telos Corporate Events

Telos Reports Strong Q2 2025 Financial Results

Telos Corporation reported its second quarter 2025 financial results on August 11, 2025, leading to a favorable response in its stock price. The company has reassured investors that it has no current plans to raise capital through dilutive securities, citing its strong liquidity position with $57 million in cash and cash equivalents, no outstanding debt, and expected positive cash flow for the remainder of the year.

Telos Appoints DJ Terreri as Principal Accounting Officer

On June 30, 2025, Telos Corporation appointed Mr. Donald Joseph (DJ) Terreri as the controller and chief accounting officer, later designating him as the principal accounting officer on July 8, 2025. Mr. Terreri, who brings extensive experience from his previous roles at CBRE Government and Defense Business, J&J Worldwide Services, ICF International, Privia Health, and Discovery Communications, will report directly to the Executive Vice President and Chief Financial Officer, Mr. Mark Bendza. His appointment is expected to strengthen Telos’s financial leadership and enhance its accounting operations.