LDOS
Leidos Holdings, Inc.$175.10
Hold
Target $194.68
Report: Mar 07, 2026Technology • Information Technology Services • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$175.10+11.2%
Rec: HoldConviction: Medium
Entry Target
$149.75
(14% below current)
Fair Value
$194.68
(11% above current)
Stop Loss
$123.62
(29% below current)
Position Size
Starter
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$205.77
52 Week Low$128.32
Avg. 3 Month Volume1.13M
Efficiency
LTM Gross Margin18.0%
LTM EBITDA Margin13.9%
LTM EBIT Margin12.2%
LTM Operating Margin12.1%
LTM ROA10.8%
LTM ROE30.9%
LTM ROIC25.4%
LTM ROCE20.4%
Capital Structure
Market Cap (MM)$19.7B
Enterprise Value (MM)$23.8B
Shares Outstanding126.39M
Total Debt (MM)$5.24B
Cash & Equivalents (MM)$1.11B
LTM Net Debt (MM)$4.13B
LTM Net Debt/EBITDA1.7x
Growth
TTM Rev. Growth3.1%
Last 3-Yr Rev. CAGR6.1%
Last 3-Yr EBITDA CAGR19.2%
Last 3-Yr EPS CAGR31.4%
Valuation
Street Target Price$211.29
LTM EV/Revenue1.4x
LTM EV/Gross Profit7.7x
LTM EV/EBIT11.3x
LTM EV/EBITDA10.0x
LTM P/E13.6x
LTM EV/FCF14.6x
LTM P/FCF12.1x
LTM P/TB2.9x
LTM P/B4.0x
Dividend Yield1.0%
Payout Ratio14.4%
Executive SummarySituation: Current price is $175.1 versus fair value $194.68 (11.2% expected return), and valuation confidence is stable. Debate: Bull case depends on Closing and Integration of Entrust Acquisition The $2.4B acquisition is expected to close in H1 2026. Bear case centers on Moat Erosion in Health and Cyber Recompetes The biggest threat is the loss of high-margin contracts during recompete cycles, particularly in the Health segment which has seen recent margin expansion. Conclusion: Recommendation is Hold with Starter sizing and Long-Term horizon.
Bull Case
Margin expansion is sustainable as AI-driven efficiencies and a higher mix of fixed-price contracts (43%) drive EBITDA margins toward the mid-13% range. The $49B backlog and 1.3x book-to-bill ratio provide high-fidelity revenue visibility through 2028.
Bear Case
High leverage (106.5% debt-to-equity) and a negative tangible book value of -$14.92 per share leave a thin equity cushion. Fixed-price contract exposure (43%) poses a risk of margin compression if inflation or supply chain costs exceed estimates.
Key Catalysts
Near-Term (0-6 months)Impact: High
Closing and Integration of Entrust Acquisition The $2.4B acquisition is expected to close in H1 2026. Successful integration will validate t...
Mid-Term (6-18 months)Impact: Moderate
Realization of Production Capacity from Tripled CapEx The increase in 2026 CapEx to $350M is specifically targeted at production capacity an...
Long-Term (18+ months)Impact: Moderate
Leidos is currently at a strategic inflection point as it transitions from a pure-play services firm to a technology-led integrator, making...
Primary Risks
Concern: Medium
Moat Erosion in Health and Cyber Recompetes The biggest threat is the loss of high-margin contracts during recompete cycles, particularly in...
Concern: Low
Fixed-Price Contract Cost Overruns With 43% of the portfolio now fixed-price, Leidos is exposed to inflationary pressures and supply chain d...
Concern: Medium
The stewardship verdict is mixed. While the board is highly independent and possesses deep defense expertise (e.g., Gregory Dahlberg, former...
Recent Activity
2026-02-18SEC Filing (8-K)
+6.19%Leidos Holdings amends and restates credit agreement to increase revolving credit facility
2025-08-05SEC Filing (8-K)
+7.45%Leidos Holdings, Inc. posted strong second quarter results and raised full-year guidance.
2025-01-23Press Release
-7.57%Leidos Wins Tsa Logistics Contract
2024-10-29SEC Filing (8-K)
+9.50%Leidos Holdings, Inc. reported strong third quarter 2024 results with record net income and adjusted EBITDA, raising full-year guidance.
2024-04-30SEC Filing (8-K)
+6.53%Leidos Holdings annual meeting approves director elections and executive compensation
Valuation Table
9.8/10Decision Grade
Scenario Range
$164
Bear
$227
Base
$274
Bull
$175