Leidos (LDOS, Financial) has secured a significant five-year contract valued at $35 million to advance the Defense Information Systems Agency's (DISA) data transfer processes. The initiative is part of the Cross-Domain Enterprise Services program, which aims to streamline the flow of crucial information between classified and unclassified networks for the Department of Defense (DoD).
Under the terms of this award, Leidos will oversee the integration of design, engineering, and operational functions to enhance DISA's data-sharing platform. This modernization effort is expected to expedite decision-making and improve the agility of DoD missions. The award falls under a Systems Engineering Technology and Innovation indefinite delivery/indefinite quantity contract, signifying a long-term commitment to advancing technological capabilities within the defense sector.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Leidos Holdings Inc (LDOS, Financial) is $168.53 with a high estimate of $186.00 and a low estimate of $151.00. The average target implies an upside of 12.81% from the current price of $149.39. More detailed estimate data can be found on the Leidos Holdings Inc (LDOS) Forecast page.
Based on the consensus recommendation from 17 brokerage firms, Leidos Holdings Inc's (LDOS, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Leidos Holdings Inc (LDOS, Financial) in one year is $137.90, suggesting a downside of 7.69% from the current price of $149.39. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Leidos Holdings Inc (LDOS) Summary page.
LDOS Key Business Developments
Release Date: May 06, 2025
- Revenue: $4.25 billion, up 7% organically year-over-year.
- Adjusted EBITDA: $601 million, up 23% year-over-year.
- Adjusted EBITDA Margin: 14.2%, increased by 190 basis points.
- Non-GAAP Net Income: $391 million.
- Non-GAAP Diluted EPS: $2.97, up 30% year-over-year.
- National Security and Digital Revenues: Increased 5% year-over-year.
- Health & Civil Revenues: Increased 8% year-over-year.
- Commercial & International Revenues: Increased 12% year-over-year.
- Defense Systems Revenues: Increased 7% year-over-year.
- Cash Flow from Operating Activities: $58 million.
- Free Cash Flow: $36 million.
- Debt: $5.1 billion, with a gross leverage ratio of 2.3x.
- Cash and Cash Equivalents: $842 million at quarter end.
- Backlog: $46.3 billion, up about $3 billion from last quarter.
- Full-Year 2025 Revenue Guidance: $16.9 billion to $17.3 billion.
- Full-Year 2025 Adjusted EBITDA Guidance: Mid- to high 12% range.
- Full-Year 2025 Non-GAAP Diluted EPS Guidance: $10.35 to $10.75.
- Full-Year 2025 Operating Cash Flow Guidance: Approximately $1.45 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Leidos Holdings Inc (LDOS, Financial) reported a strong Q1 2025 with organic revenue growth of 7% year-over-year.
- Adjusted EBITDA margins improved to 14.2%, and non-GAAP diluted earnings per share rose by 30%.
- The company reaffirmed its full-year 2025 guidance, indicating confidence in its strategic direction.
- Leidos Holdings Inc (LDOS) executed a $500 million accelerated share repurchase agreement, demonstrating strong capital allocation.
- The company announced a definitive agreement to acquire a leader in full-spectrum cyber, enhancing its NorthStar 2030 strategic growth pillars.
Negative Points
- The Health & Civil segment saw a decline, with no large single-award IDIQs benefiting from backlog adjustments.
- The first quarter included an extra week of payroll, impacting cash flow performance.
- Leidos Holdings Inc (LDOS) faces potential revenue impacts from the new administration's initiatives, although currently estimated to be negligible.
- The company is navigating a volatile macro environment, which could impact future bookings and revenue growth.
- There is uncertainty regarding the potential impact of continued resolutions and budget constraints on future opportunities.
