Leidos Holdings, Inc. (LDOS)

Leidos Holdings, Inc. (LDOS) Technology Profile & Competitive Position

Leidos Holdings, Inc. delivers technology and engineering solutions across defense, intelligence, civil, and health sectors. With a diverse portfolio including national security systems, IT modernization, and health solutions, Leidos leverages its expertise to serve government and commercial clients, maintaining a significant presence in the information technology services industry.

What Is the Investment Thesis for LDOS?

Leidos Holdings, Inc. presents a compelling investment case based on its diversified revenue streams, strong government relationships, and consistent profitability. With a P/E ratio of 11.0 and a profit margin of 8.2%, Leidos demonstrates financial stability. Key value drivers include its expertise in cybersecurity, IT modernization, and health solutions, which are in high demand across its target markets. Growth catalysts include ongoing government investments in defense and infrastructure, as well as increasing demand for digital health solutions. Potential risks include government spending cuts and increased competition, but Leidos' established market position and diverse service offerings mitigate these concerns. The company's dividend yield of 1.28% provides additional value for investors.

Based on FMP financials and quantitative analysis

LDOS Key Highlights

• Market Cap of $13.69B reflects Leidos' significant presence in the technology and engineering solutions market.
• P/E ratio of 11.0 indicates a reasonable valuation compared to its earnings.
• Profit Margin of 8.2% demonstrates the company's ability to generate profits from its operations.
• Gross Margin of 17.5% shows the efficiency of Leidos' service delivery.
• Dividend Yield of 1.28% provides a steady income stream for investors.

Who Are LDOS's Competitors?

LDOS is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are LDOS's Key Strengths?

• Strong market position in defense and intelligence sectors
• Diversified service offerings across multiple markets
• Established relationships with government agencies
• Expertise in technology and engineering solutions

What Are LDOS's Weaknesses?

• Reliance on government contracts
• Exposure to government spending cuts
• Competition from larger IT service providers
• Potential for project delays and cost overruns

What Could Drive LDOS Stock Higher?

• Government investments in defense and infrastructure projects.
• Increasing demand for cybersecurity solutions.
• Growth in the digital health market.
• Potential for new contract awards from government agencies.
• Strategic acquisitions to expand capabilities.

What Are the Key Risks for LDOS?

• Government spending cuts.
• Increased competition from larger IT service providers.
• Technological obsolescence.
• Economic downturn.
• Project delays and cost overruns.

What Are the Growth Opportunities for LDOS?

• Expansion in Cybersecurity: Leidos can capitalize on the growing demand for cybersecurity solutions in both the public and private sectors. The global cybersecurity market is projected to reach $345 billion by 2026, driven by increasing cyber threats and regulatory requirements. Leidos' expertise in this area, combined with its existing government relationships, positions it well to capture a significant share of this market. Timeline: Ongoing.
• IT Modernization for Government Agencies: Government agencies are increasingly focused on modernizing their IT infrastructure to improve efficiency and security. Leidos can leverage its expertise in cloud computing, application modernization, and network modernization to win contracts from these agencies. The U.S. government spends over $100 billion annually on IT, presenting a substantial opportunity for Leidos. Timeline: Ongoing.
• Growth in Digital Health Solutions: The digital health market is experiencing rapid growth, driven by increasing demand for telehealth, remote patient monitoring, and electronic health records. Leidos can expand its presence in this market by offering innovative solutions that improve patient outcomes and reduce healthcare costs. The global digital health market is projected to reach $660 billion by 2027. Timeline: Ongoing.
• Strategic Acquisitions: Leidos can pursue strategic acquisitions to expand its capabilities and market reach. By acquiring companies with complementary technologies or expertise, Leidos can strengthen its competitive position and accelerate its growth. Potential acquisition targets include companies in areas such as artificial intelligence, data analytics, and cybersecurity. Timeline: Ongoing.
• International Expansion: Leidos can expand its operations internationally to tap into new markets and diversify its revenue streams. By targeting countries with growing defense budgets or increasing demand for IT services, Leidos can reduce its reliance on the U.S. market and increase its overall growth rate. Potential target markets include countries in Europe, Asia, and the Middle East. Timeline: Ongoing.

What Opportunities Does LDOS Have?

• Expansion in cybersecurity and digital health markets
• Increased demand for IT modernization services
• Strategic acquisitions to expand capabilities
• International expansion to new markets

What Threats Does LDOS Face?

• Government spending cuts
• Increased competition
• Technological obsolescence
• Economic downturn

What Are LDOS's Competitive Advantages?

• Strong relationships with government agencies
• Expertise in highly regulated industries
• Diversified service offerings
• Large-scale systems integration capabilities

What Does LDOS Do?

Founded in 1969 and headquartered in Reston, Virginia, Leidos Holdings, Inc. has evolved into a major player in the technology and engineering solutions market. Originally focused on research and development, the company expanded its services to address the growing needs of the defense, intelligence, civil, and health sectors. Leidos operates through three primary segments: Defense Solutions, Civil, and Health. The Defense Solutions segment provides national security solutions, including technology, large-scale systems, and cybersecurity. The Civil segment offers systems integration services, IT solutions, and infrastructure services. The Health segment delivers health information management, managed health, and life sciences research and development services. Leidos serves a diverse range of clients, including the U.S. Intelligence Community, the Department of Defense, the Federal Aviation Administration, and commercial customers. With a global presence and a workforce of 47,000 employees, Leidos continues to innovate and expand its capabilities to meet the evolving needs of its clients.

What Products and Services Does LDOS Offer?

• Provides national security solutions for air, land, sea, space, and cyberspace.
• Offers systems integration services to air navigation service providers.
• Delivers IT solutions in cloud computing, mobility, and application modernization.
• Provides health information management and managed health solutions.
• Offers life sciences research and development services.
• Provides cybersecurity solutions to protect critical missions.

How Does LDOS Make Money?

• Provides technology and engineering solutions to government and commercial clients.
• Generates revenue through long-term contracts and service agreements.
• Operates through three segments: Defense Solutions, Civil, and Health.
• Focuses on delivering high-value solutions that address critical needs.

What Industry Does LDOS Operate In?

Leidos operates in the information technology services industry, which is characterized by rapid technological advancements and increasing demand for digital solutions. The industry is driven by factors such as cloud computing, cybersecurity, and data analytics. Leidos competes with companies like FLEX: Flex Ltd., ZM: Zoom Communications, Inc., WIT: Wipro Limited, NTAP: NetApp, Inc., and HPQ: HP Inc. The company's focus on government and regulated industries provides a competitive advantage, as these sectors often require specialized expertise and long-term relationships. The global IT services market is projected to reach $1.3 trillion by 2026, presenting significant growth opportunities for Leidos.

Who Are LDOS's Key Customers?

• U.S. Intelligence Community
• Department of Defense
• Federal Aviation Administration
• Commercial customers in the national security industry

Company Profile

Leidos Holdings, Inc. operates in the Information Technology Services industry within the Technology sector. It is headquartered in Reston, US. The company is led by CEO Thomas A. Bell. LDOS has traded publicly since 2006.

Leidos Holdings, Inc. Financial Trajectory

Leidos Holdings, Inc. (LDOS) reported $4.40B in revenue for Q2 2026, reflecting 4.6% growth compared to the prior quarter. The company recorded net income of $328.0M, with diluted EPS of $2.56. Quarter-over-quarter revenue has been mixed, typical for a large-cap company operating in Technology. Across the four most recent quarters, LDOS averaged $2.73 in diluted EPS.

How Leidos Holdings, Inc. Is Valued

Leidos Holdings, Inc. carries a market capitalization of $13.69B, placing it in the large-cap category. Relative to its peer group, LDOS's quantitative score of 66/100 is roughly in line with the peer average of 68/100.

ROE 29%Key Financial Metrics

Return on equity for Leidos Holdings, Inc. stands at 29.1%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 9.2%, showing how much profit it generates from its asset base. LDOS trades at a trailing price-to-earnings ratio of 11.03, below the Technology sector average of ~38x. Its free cash flow yield is 14.1%, a gauge of the cash the business throws off relative to its market value. A current ratio of 1.40 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 10.7%, the inverse of the P/E and a quick read on earnings relative to price.

F-Score 5/9Financial Health

Leidos Holdings, Inc.'s Piotroski F-Score is 5/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of 2.92 places it in the grey zone, a middle ground that warrants monitoring.

8/8 beatsEarnings Track Record

Leidos Holdings, Inc. has beaten Wall Street's EPS estimate in 8 of its last 8 reported quarters — a consistent record of delivering on expectations. Reported results have landed about 16.6% above estimates on average.

FY2027 estForward Outlook

Wall Street analysts project Leidos Holdings, Inc. revenue of about $18.24B for fiscal 2027, with EPS near $12.33. The estimate reflects 11 contributing analysts.

Net buyingInsider Activity

Over the past six months, Leidos Holdings, Inc. insiders filed 15 SEC Form 4 transactions — 0 sales and 15 purchases. On net that is roughly 18K shares acquired (about $1.2M) — insiders putting money in tends to read as conviction.

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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