Leidos (NYSE:LDOS) Issues Quarterly Earnings Results, Beats Expectations By $0.35 EPS

Leidos (NYSE:LDOS) issued its earnings results on Tuesday. The aerospace company reported $3.26 earnings per share for the quarter, topping analysts’ consensus estimates of $2.91 by $0.35, Zacks reports. The firm had revenue of $4.56 billion during the quarter, compared to analysts’ expectations of $4.44 billion. Leidos had a net margin of 7.80% and a return on equity of 30.81%. The firm’s revenue for the quarter was up 7.2% compared to the same quarter last year. During the same period last year, the firm posted $3.21 earnings per share. Leidos updated its FY 2026 guidance to 12.200-12.500 EPS.

Here are the key takeaways from Leidos’ conference call:

• Leidos raised its 2026 guidance, increasing the revenue midpoint by $100 million, EPS midpoint by $0.05, and operating cash flow outlook by $50 million, supported by stronger year-to-date performance.
• Defense momentum accelerated, with 6% organic revenue growth and a 2.2 book-to-bill ratio in the quarter; management highlighted expanding opportunities in munitions, counter-drone systems, maritime autonomy, and space-based missile-warning payloads.
• The company reported record second-quarter operating cash flow of $793 million and free cash flow of $761 million, while reducing leverage to 2.5x and lowering expected 2026 capital expenditures to about $250 million.
• The VA suspended incentive payments for all medical disability examination vendors through the end of 2026, creating a near-term headwind for Health; the business is expected to run around second-quarter revenue levels for the rest of the year, with longer-term economics dependent on an upcoming recompete.
• Leidos expects a continuing resolution to create potential timing risk for Intel and Digital awards, although management said customer procurement activity is accelerating and cited a $23 billion proposal pipeline awaiting adjudication.

Leidos Stock Up 6.0%

Leidos stock traded up $7.58 during trading hours on Thursday, hitting $134.43. The company had a trading volume of 852,619 shares, compared to its average volume of 1,320,444. The firm has a market capitalization of $16.91 billion, a P/E ratio of 12.54, a price-to-earnings-growth ratio of 1.91 and a beta of 0.52. The company has a debt-to-equity ratio of 1.13, a current ratio of 1.63 and a quick ratio of 1.29. The firm’s fifty day moving average is $113.21 and its 200-day moving average is $145.01. Leidos has a fifty-two week low of $98.86 and a fifty-two week high of $205.77.

Leidos Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Wednesday, September 30th. Stockholders of record on Tuesday, September 15th will be given a $0.43 dividend. This represents a $1.72 dividend on an annualized basis and a dividend yield of 1.3%. The ex-dividend date of this dividend is Tuesday, September 15th. Leidos’s dividend payout ratio is 15.75%.

Leidos declared that its Board of Directors has approved a share buyback plan on Friday, July 31st that authorizes the company to buyback 20,000,000 outstanding shares. This buyback authorization authorizes the aerospace company to repurchase shares of its stock through open market purchases. Shares buyback plans are typically a sign that the company’s board believes its stock is undervalued.

Hedge Funds Weigh In On Leidos

A number of hedge funds have recently modified their holdings of LDOS. Wexford Capital LP purchased a new position in Leidos in the third quarter valued at about $32,000. DV Equities LLC purchased a new stake in shares of Leidos during the 4th quarter worth about $33,000. Wilkerson Advisory Group LLC acquired a new stake in shares of Leidos during the 4th quarter valued at about $45,000. Kelleher Financial Advisors acquired a new stake in shares of Leidos during the 3rd quarter valued at about $46,000. Finally, Towarzystwo Funduszy Inwestycyjnych PZU SA grew its stake in shares of Leidos by 58.8% in the 3rd quarter. Towarzystwo Funduszy Inwestycyjnych PZU SA now owns 270 shares of the aerospace company’s stock valued at $51,000 after buying an additional 100 shares in the last quarter. 76.12% of the stock is owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth

A number of brokerages recently issued reports on LDOS. Royal Bank Of Canada decreased their target price on Leidos from $180.00 to $170.00 and set an “outperform” rating on the stock in a report on Wednesday. Truist Financial cut their price objective on Leidos from $195.00 to $160.00 and set a “buy” rating on the stock in a report on Friday, July 10th. Bank of America reaffirmed a “neutral” rating and set a $125.00 price objective (down from $200.00) on shares of Leidos in a research note on Wednesday, June 17th. Wall Street Zen upgraded shares of Leidos from a “hold” rating to a “buy” rating in a report on Thursday, July 16th. Finally, BNP Paribas Exane lifted their target price on shares of Leidos from $165.00 to $175.00 and gave the stock an “outperform” rating in a research report on Wednesday. One investment analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating and ten have assigned a Hold rating to the company’s stock. According to MarketBeat.com, the stock has an average rating of “Hold” and a consensus price target of $156.40.

Leidos Company Profile

Leidos is an American technology and engineering company that provides services and solutions to government and commercial customers, with a strong focus on national security, defense, intelligence, and civil government markets. The company delivers systems integration, engineering, cybersecurity, software development, data analytics, cloud migration and managed IT services, as well as mission support for complex programs. Leidos’ work spans areas such as C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance), secure communications, sensors and systems engineering, and health IT solutions for public-sector healthcare programs.

Leidos traces its corporate roots to Science Applications International Corporation (SAIC) and emerged as an independent, publicly traded company following a corporate separation in 2013.