Leidos (NYSE: LDOS) was the subject of an Oct. 21, 2026 press release headline reading "U.S. Cyber Command selects Leidos for full-spectrum cyber operations." The stock traded at $129.23 on the latest quote (Oct. 21), up 1.23%, and trades at a trailing price-to-earnings ratio of 11.95. Our data does not include the release text, a contract value or a contract length, so this article limits the award to what the headline says.
Key facts
- Oct. 21, 2026: A press release headline said U.S. Cyber Command selected Leidos for full-spectrum cyber operations. Our data does not include a contract value or term.
- Oct. 21, 2026: The latest quote was $129.23. The 52-week range is $98.86 to $205.77. Market cap is $16.22B.
- Second quarter ended July 3, 2026: Revenue was $4.56B, higher than a year earlier by 7.2%. Net income was $356.0M, down 9.0% from a year earlier.
- Aug. 4, 2026: Leidos reported EPS of $3.26 compared with an analyst estimate of $2.91. Revenue beat the $4.44B estimate.
- Nov. 3, 2026: Next earnings date. Analysts expect EPS of $3.04 and revenue of $4.71B.
What happened
The award. The only source we have on the award is the headline: U.S. Cyber Command selected Leidos for full-spectrum cyber operations. Our data does not include the release text, so we cannot say what the work covers, how long it runs or what it is worth. Cyber Command is the U.S. military organization responsible for operating in and defending military networks.
Scale in context. Leidos is a large company, and our data does not include a contract value. Investors should not assume a single contract will move quarterly results much. The better question is whether wins like this keep revenue growing while profit margins recover.
The latest quarter. In the second quarter ended July 3, 2026, revenue by segment was:
- Intelligence & Digital: $1.49B
- Health: $1.09B
- Homeland: $1.02B
- Defense: $955.0M
Why it matters for investors
Margins are the story. Revenue has risen, but profitability has not kept pace. Here are the last five quarters:
| Quarter (period end) | Revenue | Gross margin | Operating margin | Net income | |---|---|---|---|---| | Q2 FY2025 (July 4, 2025) | $4.25B | 18.4% | 13.4% | $391.0M | | Q3 FY2025 (Oct. 3, 2025) | $4.47B | 18.4% | 12.0% | $367.0M | | Q4 FY2025 (Jan. 2, 2026) | $4.21B | 16.0% | 11.2% | $335.0M | | Q1 FY2026 (Apr. 3, 2026) | $4.40B | 17.3% | 11.5% | $328.0M | | Q2 FY2026 (July 3, 2026) | $4.56B | 17.9% | 11.1% | $356.0M |
Gross margin dipped in the fourth quarter of fiscal 2025 and has partly recovered. Operating margin, which is profit after overhead costs, has stayed lower than a year ago. Net income has recovered from its low in the first quarter of fiscal 2026 (period ended Apr. 3, 2026) but is still below the year-ago level. We have no earnings-call detail on the gap, so we do not offer a cause.
Cash flow was strong in the latest quarter. Free cash flow, which is cash from operations minus capital spending, was $761.0M in Q2 FY2026. That was the highest of the five quarters. The earlier quarters were $270.0M, $452.0M, $680.0M and $457.0M, in order from Q1 FY2026 back to Q2 FY2025. Cash flow can be uneven from quarter to quarter, so a single quarter does not set a trend. In Q2 FY2026 the company spent $72.0M on buybacks and $55.0M on dividends. Buybacks were larger in the two prior quarters, at $243.0M in Q1 FY2026 and $305.0M in Q4 FY2025.
Valuation versus peers. Leidos trades at a trailing P/E of 11.95, with a net margin of 7.9%. Its price-to-sales ratio is 0.92, and its price-to-free-cash-flow ratio is 7.50. The dividend yield is 1.3%. Peers look like this:
| Company | P/E (trailing) | Net margin | Market cap | |---|---|---|---| | Leidos (LDOS) | 11.95 | 7.9% | $16.22B | | Booz Allen Hamilton (BAH) | 11.74 | 7.0% | $9.03B | | CACI International (CACI) | 25.37 | 5.5% | $13.74B | | Leonardo DRS (DRS) | 28.28 | 8.5% | $9.06B | | Amentum (AMTM) | 24.28 | 1.4% | $4.93B |
Leidos is priced close to Booz Allen on earnings. It is priced well below CACI, Leonardo DRS and Amentum, and its net margin is higher than all but Leonardo DRS. Cheaper does not mean better; a low multiple can also reflect doubts about growth or profit.
Analysts. Of 28 ratings, 16 are buy, 12 are hold and none are sell, which gives a consensus of "Buy." Price targets average $150.88, with a median of $155.00. The range runs from a low of $130.00 to a high of $170.00. On Oct. 8, 2026, JP Morgan downgraded the stock from Overweight to Neutral. TD Cowen and Jefferies reiterated Hold ratings on Oct. 6, and Citigroup kept its Buy on Oct. 7. A data-provider model puts fair value far above the current price, at $430.06 per share. We treat that as a model output, not a forecast. It depends heavily on assumptions about long-term growth.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 for Leidos is 72.2, rated Strong. The sector-relative pillars are:
- Valuation: 90 (strongest)
- Growth: 71
- Quality: 68
- Momentum: 57
- Safety: 37 (weakest)
What could go wrong
- Debt. Total debt was $6.58B at the end of the second quarter on July 3, 2026, against $748.0M in cash and short-term investments. Net debt was $5.83B and shareholders' equity was $5.28B. The debt-to-equity ratio is 1.24. This lines up with the low safety pillar. Financial-strength scores are moderate: a Piotroski score of 6 out of 9 and an Altman Z-score of 3.13.
- Margin pressure. If operating margin stays near 11%, earnings may lag revenue growth.
- Stock weakness. The price of $129.23 is well below the 52-week high of $205.77.
- Insiders. In the last 90 days, the filings we reviewed show no open-market insider purchases and three sales. Older filings in that window may be missing, and insider sales can have many unrelated causes.
- Contract risk. Government awards can be protested, delayed or changed, and our data does not show the terms of this one.
What to watch next
- Nov. 3, 2026 earnings. Analysts expect EPS of $3.04 and revenue of $4.71B. Watch whether operating margin moves up from 11.1%.
- Free cash flow. Check whether the strong second-quarter figure holds or reverts toward earlier quarters.
- Cyber backlog. Look for management comments on how cyber wins, including this one, convert into revenue.
- Debt and buybacks. See whether the company keeps repurchasing shares or prioritizes paying down debt.
- Analyst moves. After JP Morgan's downgrade, watch whether other firms change ratings or targets.
Frequently asked questions
Q: What did Leidos win from U.S. Cyber Command?
According to the Oct. 21, 2026 press release headline, U.S. Cyber Command selected Leidos for full-spectrum cyber operations. Our data does not include the release text, so we cannot describe the scope, length or value of the award.Q: Is Leidos stock cheap compared with other defense IT companies?
On trailing earnings, yes, relative to most of the peers we checked. Leidos has a P/E of 11.95, close to Booz Allen at 11.74. CACI is at 25.37 and Leonardo DRS is at 28.28. Its net margin of 7.9% is also higher than most of those peers. A low multiple can reflect risks such as debt and thinner operating margins, so it is not a verdict on the stock.Q: What do analysts expect for Leidos?
The consensus rating is "Buy," with 16 buy ratings, 12 holds and no sells among 28 analysts. Their price targets range from $130.00 to $170.00, with an average of $150.88. The stock traded at $129.23 on the latest quote (Oct. 21, 2026). These are analyst views, not our forecast, and they can change after the Nov. 3 earnings report.This is educational content, not investment advice. Past performance does not guarantee future results.