Leidos Holdings, Inc. (LDOS) stock analysis

P/E below its 5-year median

Leidos's P/E of 12.5 is below its own 5-year median of 18.2.

P/E below the industry

Leidos's P/E of 12.5 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 27.6.

EV/EBITDA below its 5-year median

Leidos's EV/EBITDA of 9.5 is below its 5-year median of 12.0.

P/B below the industry

Leidos's price-to-book of 3.18 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 3.32.

Trading below fair value

The share price of $133.89 is below our fair value estimate of $223.66.

Margin of safety over 20%

The price is 40.1% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 6.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 31.0% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -1.9% over the last twelve months, against a 5-year average of 18.2% a year.

Growing slower than the industry

Revenue grew 3.4% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.

Guidance raised

Leidos raised its fiscal year 2026 Revenues outlook on Aug 3, 2026.

Gross margin improving

Gross margin was 17.8% over the last twelve months, against 17.6% a year earlier.

Return on equity over 15%

Return on equity was 27.7% over the last twelve months and averaged 19.9% over five years.

Return on capital over 10%

Return on invested capital was 16.3%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Leidos's return on equity of 27.7% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -1.2%.

Earnings grew over 5 years

Net income grew 18.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 7.8% over the last twelve months, against a 5-year average of 5.5%.

Net margin above the industry

Leidos's net margin of 7.8% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -4.8%.

High debt

Debt is 114% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 123% five years ago to 114%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 38.1% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.63 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.16; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Leidos paid dividends worth 1.3% of the share price over the last twelve months.

Yield below Treasuries

The 1.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Leidos yields 1.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.