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1. Company Snapshot

1.a. Company Description

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally.It operates through three segments: Defense Solutions, Civil, and Health.The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the National Aeronautics and Space Administration, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry.


Its solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions.The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection and automation services.It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services.


The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people worldwide, including health information management, managed health, digital transformation, and life sciences research and development services.Leidos Holdings, Inc.was founded in 1969 and is headquartered in Reston, Virginia.

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1.b. Last Insights on LDOS

Leidos Holdings, Inc.'s recent performance was negatively impacted by weak Q4 2025 revenue, particularly in the National Security & Digital segment. The company's modest 2026 guidance also drove negative market sentiment. Despite improved operating margins across all segments, revenue growth remains tepid and heavily reliant on U.S. government contracts. Analysts have a "Moderate Buy" rating on the stock, with four hold recommendations and nine buy recommendations. Institutional investors have been adjusting their holdings, with some selling and others buying shares.

1.c. Company Highlights

2. Leidos Holdings' Strong FY2025 Performance Sets Stage for Continued Growth

Leidos Holdings delivered a robust financial performance in FY2025, with revenue growth of 3.1% and adjusted EBITDA margin expansion of 120 basis points to 14.1%. Non-GAAP diluted EPS grew by 17% to $10.58, with actual EPS for the fourth quarter coming in at $2.76, beating estimates of $2.57. The company's strong cash generation was evident in its record fourth quarter and full-year operating cash flows of $495 million and $1.75 billion, respectively.

Publication Date: Feb -19

📋 Highlights
  • Revenue and Margin Performance:: Leidos reported 2025 revenue at the top of guidance, with adjusted EBITDA margin of 14.1% (up 120 basis points YoY) and non-GAAP diluted EPS growth of 17%.
  • Cash Flow Strength:: Generated $1.75 billion in full-year operating cash flow and $495 million in Q4, with free cash flow up 26% driven by 127% conversion in Q4.
  • Bookings and Backlog Growth:: Achieved $5.6 billion in Q4 net bookings (1.3 book-to-bill ratio), funded backlog increased 15% YoY, and secured $2.2 billion Air Force radar contract plus $151B SHIELD and $25B Microelectronics IDIQs.
  • Capital Deployment and M&A:: Announced $2.4 billion Entrust acquisition (2.6x pro forma leverage), $350 million 2026 CapEx (tripled from prior) for production expansion, and $1.4 billion in new bonds for the deal.

Segment Performance

The company's segment results showed strong performance across all four segments, with revenue growth and margin expansion in each segment. The Intelligence and Digital segment is expected to see mid-to-high single-digit revenue growth at steady margins in 2026, while the Health segment will see modestly lower revenue and margin due to the additional vendor on the VBAMDE work.

Growth Prospects

Leidos is well-positioned for growth, with a robust business development pipeline and a $49 billion backlog. The company expects revenue growth of up to 4% in 2026, with sustained momentum approaching double digits by the end of the year. The Defense segment is expected to contribute to growth, with the potential for Golden Dome activities to accelerate, especially in Maritime.

Valuation

With a P/E Ratio of 15.6 and EV/EBITDA of 8.9, Leidos' valuation appears reasonable. The company's ROE of 31.07% and ROIC of 15.18% indicate strong profitability. The dividend yield of 0.95% and free cash flow yield of 7.61% also suggest an attractive return profile. As Leidos continues to invest in its growth pillars, including Defense and Health, its strong financial performance and growth prospects position it for long-term success.

Investment Plans

The company plans to increase its capital expenditure investments to $350 million in 2026, used for key capitalized investments, production capacity expansion, and facility upgrades. Leidos is also investing in co-development opportunities with the Department of Defense, the FAA, and its health business, which is expected to drive growth.

Acquisition and Financing

Leidos announced plans to acquire Entrust for $2.4 billion, with $500 million in cash, $500 million in commercial paper, and $1.4 billion in new bonds. The transaction is expected to close in Q2, subject to regulatory approval and customary closing conditions, and will result in a pro forma gross leverage of 2.6 times, below the company's target of three times.

3. NewsRoom

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Ghost Murmur: Lockheed's Quantum Heartbeat Hunter The CIA Used To Pluck US Airman Out Of Iran's Desert

Apr -10

Source: feeds.benzinga.com

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Leidos (LDOS) Advances But Underperforms Market: Key Facts

Apr -08

Source: zacks.com

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Leidos Schedules First Quarter 2026 Earnings Conference Call for May 5, 2026, at 8 a.m. (ET)

Apr -06

Source: prnewswire.com

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Braun Stacey Associates Inc. Boosts Stake in Leidos Holdings, Inc. $LDOS

Apr -05

Source: defenseworld.net

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Leidos (LDOS) Laps the Stock Market: Here's Why

Apr -02

Source:

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Leidos completes $2.4 billion acquisition of ENTRUST

Mar -30

Source: prnewswire.com

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Fujitsu (OTCMKTS:FJTSY) and Leidos (NYSE:LDOS) Financial Contrast

Mar -27

Source: defenseworld.net

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Leidos (LDOS) Stock Falls Amid Market Uptick: What Investors Need to Know

Mar -23

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.33%)

6. Segments

Defense Solutions

Expected Growth: 5%

Leidos Holdings' Defense Solutions segment growth is driven by increasing demand for cybersecurity, intelligence, and logistics services from the US Department of Defense and other government agencies. The company's expertise in digital modernization, cloud computing, and artificial intelligence also supports growth. Additionally, Leidos' strategic acquisitions and partnerships expand its capabilities and customer base, contributing to the 5% growth rate.

Civil

Expected Growth: 3%

Civil segment's 3% growth is driven by increasing demand for infrastructure development, government investments in transportation and energy projects, and Leidos' expertise in environmental and engineering services. Additionally, the company's strategic acquisitions and partnerships have expanded its capabilities, enabling it to capitalize on emerging trends in sustainability and digital transformation.

Health

Expected Growth: 4%

Leidos Holdings' Health segment growth is driven by increasing demand for healthcare IT services, expansion of existing contracts, and strategic acquisitions. The company's focus on digital transformation, cybersecurity, and data analytics also contributes to growth. Additionally, the COVID-19 pandemic has accelerated the adoption of telehealth and virtual care, further boosting demand for Leidos' health services.

7. Detailed Products

Defense Solutions

Leidos provides a range of defense solutions, including cybersecurity, logistics, and supply chain management, to support the U.S. Department of Defense and other government agencies.

Civil Government Solutions

Leidos offers a range of solutions for civil government agencies, including IT modernization, cybersecurity, and data analytics.

Health Solutions

Leidos provides healthcare and life sciences solutions, including research and development, clinical trials management, and health IT services.

Intelligence Solutions

Leidos offers intelligence solutions, including data analytics, cybersecurity, and intelligence analysis, to support national security and law enforcement agencies.

Cyber Solutions

Leidos provides cybersecurity solutions, including threat detection, incident response, and penetration testing, to protect government and commercial organizations from cyber threats.

Engineering Solutions

Leidos offers engineering solutions, including systems engineering, integration, and testing, to support government and commercial clients.

8. Leidos Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Leidos Holdings, Inc. is medium due to the presence of alternative solutions and services in the defense, intelligence, and civil markets.

Bargaining Power Of Customers

The bargaining power of customers for Leidos Holdings, Inc. is low due to the company's strong relationships with its customers and the lack of buyer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Leidos Holdings, Inc. is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Leidos Holdings, Inc. is low due to the high barriers to entry in the defense and intelligence markets, including the need for specialized expertise and security clearances.

Intensity Of Rivalry

The intensity of rivalry for Leidos Holdings, Inc. is high due to the presence of several large and established competitors in the defense, intelligence, and civil markets.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 55.30%
Debt Cost 7.25%
Equity Weight 44.70%
Equity Cost 7.25%
WACC 7.25%
Leverage 123.73%

11. Quality Control: Leidos Holdings, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Leidos

A-Score: 6.0/10

Value: 4.6

Growth: 6.6

Quality: 5.9

Yield: 2.0

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Jack Henry

A-Score: 5.5/10

Value: 2.5

Growth: 5.7

Quality: 8.4

Yield: 2.0

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
CACI

A-Score: 5.3/10

Value: 3.8

Growth: 6.2

Quality: 5.2

Yield: 0.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Dolby Laboratories

A-Score: 5.1/10

Value: 3.5

Growth: 3.3

Quality: 8.5

Yield: 3.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
SAIC

A-Score: 5.0/10

Value: 6.6

Growth: 5.4

Quality: 7.1

Yield: 3.0

Momentum: 1.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
ASGN

A-Score: 4.1/10

Value: 7.7

Growth: 6.2

Quality: 5.2

Yield: 0.0

Momentum: 0.0

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

152.88$

Current Price

152.88$

Potential

-0.00%

Expected Cash-Flows