Attractive PE Ratio
Low Price to Sales Ratio
Strong Return on Equity
Healthy Operating Profit Margin
Low Debt Levels
Strong Interest Coverage
🏆 Strong Financial Performance
🌟 Diverse Growth Pillars
🚀 High Book-to-Bill Ratio
📈 Robust Growth Outlook
🔧 Innovation in Defense Capabilities
High PB Ratio
Net Profit Margin
Low Cash Ratio
⚠️ Stock Performance Decline
🛑 Potential Market Disruptions
Leidos demonstrates a strong quality business model with solid financial performance and a diversified strategy for growth. However, it must navigate potential market disruptions and stock performance challenges while capitalizing on robust opportunities for future growth.
Analysis Date: February 11, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$363.00
Current Market Price: $128.35
IV/P Ratio: 2.83x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
65.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for LDOS
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (14.12)
P/B ratio ≤ 1.5 (4.01)
Current ratio ≥ 2.0 (1.21x)
Long-term debt < Net current assets (0.80x)
Margin of safety (65.0%)
LDOS does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Return on equity stands at 28.28%, showcasing the company's effective use of equity to generate profits.
With an operating profit margin of 10.96%, LDOS is effectively managing its operating expenses relative to its revenue.
A net profit margin of 7.53% indicates that while LDOS is profitable, there are areas where costs could be optimized further to improve profitability.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
28.28%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
2.17%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
16.79%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
7.53%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
LDOS has a debt to equity ratio of 0.14, indicating a low level of debt relative to equity, which suggests financial stability.
An interest coverage ratio of 9.46 indicates that the company can easily cover its interest obligations, reflecting strong financial health.
A cash ratio of 0.26 indicates that while liquidity is reasonable, it may not be sufficient to cover short-term liabilities entirely.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.14x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.21x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Leidos delivered strong financial results, with a 9.7% organic revenue growth rate in Q4 and a 7.9% growth for the full year. The adjusted EBITDA margin increased to 12.9%, showcasing solid profitability.
The North Star 2030 growth strategy focuses on IT modernization, war-fighting capabilities, and public-private partnerships, aligning well with government priorities and creating robust market opportunities.
Leidos achieved a record book-to-bill ratio of 1.7 in Q4 2024, indicating strong demand and a healthy pipeline for future growth.
Since November 12, the stock has declined by approximately 25%, creating pressure on shareholder value despite strong operational performance.
For 2025, Leidos expects revenue growth between $16.9 billion and $17.3 billion, indicating a positive trajectory despite ongoing market challenges. They also expect strong cash flow generation, targeting $1.45 billion in operating cash flow.
Leidos is focused on developing innovative defense solutions, such as unmanned vehicles and hypersonic technology, which are aligned with current military needs and budget priorities.
The uncertainties surrounding federal spending and the new administration's budget priorities may create temporary slowdowns in contracting, which could impact short-term revenue growth.