Leidos Holdings, Inc.
LDOS
$158.82
+1.80%
Leidos Holdings, Inc. is a technology, engineering, and science company providing services and solutions in defense, intelligence, civil, and health sectors. It is a major government contractor with a diversified portfolio across national security, defense, civil, and health markets.…
LDOS
Leidos Holdings, Inc.
$158.82
Related headlines
Investment Opinion: Should I buy LDOS Today?
Based on a synthesis of the data, the objective assessment for LDOS is a Hold. The stock's valuation appears compelling, with a forward P/E of 12.1 and strong cash flow generation. However, the clear deterioration in revenue growth and near-term business momentum, coupled with a broken technical picture, suggests waiting for evidence of a fundamental turnaround or a more attractive entry point is prudent. The current price near 52-week lows reflects these significant concerns.
Sign up to view all
LDOS 12-Month Price Forecast
The analysis yields a neutral stance. Powerful fundamental strengths (profitability, cash flow, valuation) are currently being overshadowed by clear negative momentum in the business and the stock price. The risk/reward appears balanced, leaning towards value if an investor has a long time horizon to weather potential volatility.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Leidos Holdings, Inc.'s 12-month outlook, with a consensus price target around $206.47 and implied upside of +30.0% versus the current price.
Average Target
$206.47
7 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
7
covering this stock
Price Range
$127 - $206
Analyst target range
No sufficient analyst coverage available.
Bulls vs Bears: LDOS Investment Factors
Leidos presents a classic value vs. growth dilemma. The company exhibits strong underlying financial health with robust profitability and cash generation, trading at a discount based on forward earnings. However, recent revenue declines, margin compression, and a sharp technical downtrend driven by weak guidance create significant near-term headwinds.
Bullish
- Strong Profitability Metrics: High ROE of 29.6% and ROA of 9.9% indicate excellent capital and asset utilization.
- Healthy Free Cash Flow: TTM free cash flow of $1.63B provides financial flexibility for dividends and growth.
- Attractive Forward Valuation: Forward P/E of 12.1 and PEG ratio of 0.84 suggest the stock is undervalued relative to growth.
- Solid Balance Sheet: Current ratio of 1.70 and moderate debt-to-equity of 1.21 indicate financial stability.
Bearish
- Revenue Contraction: Q4 2025 revenue declined 3.6% YoY, raising concerns about top-line growth.
- Technical Downtrend: Stock down 19.4% over 6 months, underperforming the market with weak relative strength.
- Margin Pressure: Net margin declined to 8.0% in Q4 from 9.2% in Q2, indicating profitability challenges.
- Government Dependency Risk: Revenue and outlook sensitive to federal budget cycles and potential shutdowns.
LDOS Technical Analysis
The stock has been in a pronounced downtrend over the observed six-month period, declining approximately 19.4% from its close of $192.89 on October 2, 2025, to $155.52 on March 31, 2026. Short-term performance is weak, with the stock down 11.2% over the past month and 13.8% over the past three months, significantly underperforming the broader market as indicated by relative strength figures of -5.9 and -9.2, respectively. The current price of $155.52 is near the lower end of its 52-week range of $128.32 to $205.77, representing a drawdown of about 22.7% from its high.
Beta
0.62
0.62x market volatility
Max Drawdown
-22.7%
Largest decline past year
52-Week Range
$128-$206
Price range past year
Annual Return
+11.1%
Cumulative gain past year
| Period | LDOS Return | S&P 500 |
|---|---|---|
| 1m | -12.1% | -3.6% |
| 3m | -13.4% | -4.0% |
| 6m | -18.8% | -2.0% |
| 1y | +11.1% | +16.2% |
| ytd | -13.4% | -3.8% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
LDOS Fundamental Analysis
Revenue in the most recent quarter (Q4 2025) was $4.21 billion, showing a year-over-year decline of 3.6%. Profitability metrics have softened, with the net margin for the quarter at 8.0%, down from the 8.2% and 9.2% margins reported in the prior two quarters. The company maintains a moderate debt-to-equity ratio of 1.21 and a healthy current ratio of 1.70, while generating substantial free cash flow, with TTM free cash flow reported at $1.63 billion. Operational efficiency is supported by a strong return on equity (ROE) of 29.6% and a return on assets (ROA) of 9.9%, indicating effective use of shareholder capital and assets.
Quarterly Revenue
$4.2B
2026-01
Revenue YoY Growth
-0.03%
YoY Comparison
Gross Margin
+0.16%
Latest Quarter
Free Cash Flow
$1.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is LDOS Overvalued?
Given the company's positive net income, the trailing P/E ratio of 16.7 is the primary valuation metric. This forward P/E of 12.1 suggests the market anticipates earnings growth. The stock trades at a price-to-sales (P/S) ratio of 1.41 and an EV/EBITDA of 12.1. Peer comparison data is not available in the provided inputs.
PE
16.7x
Latest Quarter
vs. Historical
High-End
5-Year PE Range -8x~22x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.1x
Enterprise Value Multiple
Investment Risk Disclosure
The primary risk for Leidos is its dependence on U.S. government spending, which is subject to political budget cycles, sequestration risks, and potential shutdowns, as highlighted by recent news. This creates revenue visibility and growth uncertainty. Financial risks include the recent trend of declining revenue and contracting net margins, which, if persistent, could pressure earnings and the current valuation multiples. Operational risks involve the competitive nature of defense contracting and potential cost overruns on large projects. Market risk is elevated, as evidenced by the stock's severe underperformance relative to the S&P 500 over the past six months (-16.6% relative strength), indicating a significant loss of investor confidence that may not reverse quickly.
FAQ
The key risks are: 1) Revenue Dependency: Heavy reliance on U.S. government budgets, which are politically volatile and subject to shutdowns. 2) Business Momentum: Recent quarterly revenue decline and weakening net margins. 3) Market Sentiment: The stock has severely underperformed the market, down 19.4% in six months, indicating a prolonged loss of investor confidence that may be difficult to reverse quickly.
The 12-month outlook is mixed with a neutral base case. The base case (55% probability) sees the stock trading between $155 and $180, as current valuation supports the price but growth concerns limit upside. The bull case targets $185-$205 on a business turnaround, while the bear case risks a fall to the $128-$150 range if fundamentals worsen. The lack of analyst price targets increases uncertainty.
Based on the provided data, LDOS appears undervalued based on forward earnings and growth prospects. Its forward P/E ratio of 12.1 is low for a company with a 29.6% Return on Equity. The PEG ratio of 0.84 (below 1.0) classically indicates undervaluation relative to its growth rate. However, this discount reflects justified concerns about recent top-line contraction and margin pressure.
LDOS is a complex case. It is a good buy for value investors focused on strong cash flow (TTM FCF $1.63B) and attractive valuation (forward P/E 12.1). However, it is not a good buy for growth investors or those sensitive to near-term momentum, given the recent revenue decline of 3.6% and the stock's 19.4% drop over six months. A 'Hold' rating is most appropriate until business trends stabilize.
LDOS is more suitable for a long-term investment horizon. Its stable government-backed business model, strong cash flow, and dividend are tailwinds for long-term holders who can wait for a cyclical recovery. It is poorly suited for short-term trading due to its pronounced downtrend, weak relative strength, and sensitivity to quarterly government contracting news, which creates high near-term volatility.