Last Updated: 16 Sep 2024
Executive Summary
Leidos Holdings Inc. (LDOS) is a leading defense, aviation, information technology, and biomedical research company with a strong financial performance and positive analyst outlook. Despite a recent decline in stock price, the company's fundamentals remain solid, indicating potential for long-term growth.
Company Overview
Leidos Holdings Inc. provides scientific, engineering, systems integration, and technical services to government and commercial clients. Headquartered in Reston, Virginia, the company operates through four segments: Defense Solutions, Civil Solutions, Health Solutions, and Information Technology Solutions.
Fundamental Analysis
Revenue: Revenue has grown steadily in recent years, reaching $16.01 billion in the latest fiscal year (2023).
Earnings: Diluted EPS has also increased, reaching $3.19 in the latest fiscal year.
Profitability: Profit margins have remained stable, with an operating margin of 11.5% and a net profit margin of 2.7%.
Valuation: The company trades at a premium to the industry average, with a trailing PE ratio of 48.75 and a forward PE ratio of 16.37.
Dividend: Leidos pays a quarterly dividend of $0.15 per share, resulting in a yield of 0.0098%.
Technical Analysis
Trend: The stock price has been trending downwards since reaching a 52-week high of $158.71 in January 2023.
Support and Resistance: The current stock price of $155.5 is near a support level of $150.24 (50-day moving average). Resistance is seen at $169.41 (analyst target price).
Momentum Indicators: The relative strength index (RSI) is below 50, indicating potential for a rebound.
Short Term Outlook
In the short term, Leidos may face some headwinds due to the recent stock price decline. However, the company's strong fundamentals and positive analyst outlook suggest that the stock could rebound.
Long Term Outlook
The long-term outlook for Leidos is positive. The company's focus on defense and government contracting provides stability, while its expertise in information technology and biomedical research offers growth potential.
Analyst Recommendations
Analysts are generally bullish on Leidos, with the majority recommending a "Buy" or "Strong Buy" rating. The average analyst target price is $169.41, representing an upside potential of approximately 9%.
