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Leidos Holdings Inc (LDOS)
:LDOS
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Leidos Holdings
(NYSE:LDOS)69Neutral
Positive Factors
Financial Performance
LDOS reported strong 4Q24 results and issued in-line 2025 guidance, with a record 4Q book-to-bill of 1.7x compared with a seasonal average of ~0.9x.
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
Sector Sentiment
The looming debt ceiling expiration and negative rhetoric have soured sentiment on government services stocks, driving significant sector multiple contraction.
Leidos Holdings (LDOS) vs. S&P 500 (SPY)
Market Cap
$17.34B
Dividend Yield1.19%
Average Volume (3M)1.73M
Price to Earnings (P/E)14.3
Beta (1Y)1.05
Revenue Growth7.93%
EPS Growth541.97%
CountryUS
Employees48,000
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)9.24
Shares Outstanding131,167,370
10 Day Avg. Volume1,862,084
30 Day Avg. Volume1,728,322
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)N/A
Price to Sales (P/S)1.02
Price to Cash Flow (P/CF)14.20
P/FCF Ratio10.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$172.00Price Target Upside30.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Leidos Holdings Business Overview & Revenue Model
Company DescriptionLeidos Holdings, Inc. is a holding company, which engages in the provision of scientific, engineering and information technology services and solutions in the areas of defense, intelligence, civil and health markets. It operates through the following three segments: Defense Solutions, Civil, and Health. The Defense Solutions segment focuses on deploying agile, cost-effective solutions to meet the ever-changing missions of the company's customers in areas of intelligence surveillance and reconnaissance, enterprise IT and integrated systems and cybersecurity and global services. The Civil segment focuses on seamlessly integrating and protecting physical, digital and data domains. The Health segment offers solutions to federal and commercial customers that are responsible for the health and wellbeing of people worldwide including service members and veterans. The company was founded by John Robert Beyster on February 3, 1969 and is headquartered in Reston, VA.
How the Company Makes MoneyLeidos Holdings generates revenue primarily through government contracts, which make up a significant portion of its income. The company's key revenue streams include defense and intelligence solutions, civil infrastructure services, and health-related services, often secured through competitive bidding processes. Leidos benefits from long-term contracts and partnerships with various U.S. government agencies, ensuring a stable and recurring revenue base. Additionally, the company's focus on innovation and technological advancement allows it to develop proprietary solutions that address specific client needs, further enhancing its market position and revenue potential.
Leidos Holdings Financial Statement Overview
Summary
Leidos Holdings demonstrates strong financial health, with consistent revenue growth, improved profitability, and strengthened balance sheet metrics. The company shows robust cash flow performance, indicating effective cash management. However, maintaining these trends while managing high liabilities remains crucial.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.78
Positive
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.72
Positive
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.80
Positive
| 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 |
| 621.00M | 5.20B | 5.49B | 5.67B | 5.31B | Net Debt |
| -322.00M | 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 | |||
| 1.39B | 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
Negative
132.22
Price Trends
142.05
Negative
155.99
Negative
152.87
Negative
Market Momentum
-4.21
Negative
41.86
Neutral
65.57
Neutral
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 132.22 is below the 20-day moving average (MA) of 133.79, below the 50-day MA of 142.05, and below the 200-day MA of 152.87, indicating a bearish trend. The MACD of -4.21 indicates Negative momentum. The RSI at 41.86 is Neutral, neither overbought nor oversold. The STOCH value of 65.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LDOS.
Leidos Holdings Risk Analysis
Leidos Holdings disclosed 45 risk factors in its most recent earnings report. Leidos Holdings reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Leidos Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $67.14B | 16.37 | 27.30% | 1.70% | 4.44% | 110.33% | |
75 Outperform | $13.43B | 15.81 | 71.93% | 2.02% | 14.07% | 116.33% | |
75 Outperform | $68.68B | 18.64 | 17.14% | 2.23% | 12.88% | 13.78% | |
74 Outperform | $105.65B | 20.12 | 84.26% | 2.82% | 5.14% | -19.14% | |
69 Neutral | $17.34B | 14.34 | 28.42% | 1.19% | 7.93% | 541.97% | |
66 Neutral | $4.83B | 16.66 | 18.80% | 1.54% | -3.87% | -37.31% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
LDOS
Leidos Holdings
132.22
4.30
3.36%
BAH
Booz Allen
105.79
-41.20
-28.03%
GD
General Dynamics
250.80
-17.38
-6.48%
LMT
Lockheed Martin
448.82
27.88
6.62%
NOC
Northrop Grumman
463.83
13.32
2.96%
SAIC
Science Applications
101.03
-40.43
-28.58%
Leidos Holdings Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -7.39% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
Leidos demonstrated strong financial performance with record revenue growth and strategic contract wins in 2024. The company successfully deployed capital to enhance shareholder value and maintained a strong balance sheet. However, challenges such as a significant stock price decline and specific market setbacks were noted. Overall, the positive financial metrics and strategic achievements outweigh the challenges.Highlights
Record Revenue and Growth
Revenue for the quarter reached nearly $4.37 billion, reflecting a robust organic growth rate of 9.7%. For the year, total revenue grew 7.9% to $16.66 billion, exceeding the high end of prior guidance.
Strong EBITDA Performance
Adjusted EBITDA margin for the year increased by 210 basis points to 12.9%, with a full-year adjusted EBITDA of $2.15 billion.
Successful Capital Deployment
Leidos repurchased $850 million worth of shares in 2024, significantly exceeding the initial commitment.
Significant Contract Wins
Secured key contracts including a $2.6 billion follow-on for TSA logistics software and a $4.1 billion IDIQ for IFPC Enduring Shield Air Defense System.
Strong Book-to-Bill Ratio
Achieved a book-to-bill ratio of 1.7 in the fourth quarter and 1.4 for the year, indicating strong future growth prospects.
Lowlights
Stock Price Decline
Leidos' stock has traded down about 25% since November 12, impacting shareholder value.
Challenges in the UK
Faced challenges in the UK market, impacting segment margins in the Commercial and International sectors.
Asset Write-off
A $21 million write-off associated with an airborne surveillance asset affected Defense Systems segment margins.
Company Guidance
During the Leidos Fourth Quarter Fiscal Year 2024 Earnings Call, CEO Tom Bell highlighted the company's impressive financial performance, exceeding their prior guidance with a 6.6% organic revenue growth CAGR over three years, an adjusted EBITDA margin of 12.9%, and a 100% free cash flow conversion, achieving $3.5 billion in cumulative operating cash flow. The gross debt leverage ratio was reduced from 3.4x to 2.2x, and the company repurchased $850 million worth of shares in 2024. Bell introduced Leidos' new growth strategy, North Star 2030, focusing on IT modernization, war-fighting capabilities, and increased privatization. The company reported net bookings of $7.6 billion for the quarter, a book-to-bill ratio of 1.7, and year-over-year backlog growth of 18%. CFO Chris Cage provided a guidance for 2025 with projected revenues between $16.9 billion and $17.3 billion, an adjusted EBITDA margin in the mid-to-high 12% range, and a non-GAAP diluted EPS between $10.35 and $10.75.Leidos Holdings Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Leidos Holdings Updates Bylaws for Improved Transparency
Neutral
Oct 25, 2024
Leidos Holdings Inc. has updated its Bylaws to improve transparency and procedural clarity for stockholders wishing to nominate directors or propose business at meetings. These updates align with Delaware General Corporation Law and include enhanced disclosure requirements for nominees and proposals, ensuring stakeholders remain informed and compliant with voting regulations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.