Leidos Holdings, Inc. (LDOS): Earnings & Fundamental Profile

Business profile & competitive position

Leidos Holdings, Inc. is a science, research and engineering company that delivers digital and mission-focused solutions to U.S. government and commercial customers worldwide. Through its Leidos, Inc. operating subsidiary, the company reports in four segments: National Security & Digital (44% of fiscal 2025 revenue), Health & Civil (30%), Commercial & International (13%), and Defense Systems (13%). Its service lines include IT modernization, cyber operations, AI-enabled mission software, managed health services, air traffic systems, energy infrastructure, security detection products, and advanced maritime, aerospace, and land defense systems.

The company’s revenue base is heavily tied to the federal customer set: in fiscal 2025, approximately 87% of revenues came from U.S. government contracts as a prime or subcontractor, while about 8% came from entities located outside the United States. Talent is also a competitive input, with roughly 53% of employees holding U.S. security clearances and about 19% being military veterans. That concentration of cleared personnel is a structural asset because cleared labor is scarce and costly to replace.

Profitability metrics currently show a 7.9% net margin and a 27.6% return on equity. The 7.9% margin is consistent with a services-heavy government contractor that wins fixed-price and cost-plus work. The 27.6% ROE is meaningfully higher than the typical cost-of-equity threshold, indicating efficient capital deployment and likely leverage rather than pure margin expansion. Taken together, these figures suggest that Leidos’s competitive position rests on incumbent relationships, cleared talent, and program execution rather than a wide consumer-style moat.

Financial posture

Leidos currently carries a market capitalization of $17.6 billion and trades at a price-to-earnings ratio of 13.0, with a beta of 0.55. The beta of 0.55 points to significantly lower relative volatility than the broader equity market, which fits a defensive, government-backed cash-flow profile. A 13.0 P/E sits below the multiples common in high-growth corners of the technology sector, reflecting the slower but more predictable nature of federal services revenue.

Profitability remains the strongest element of the valuation case: net margin of 7.9% and ROE of 27.6% are well above average for many industrial and IT services peers. The snapshot price of $140.21 comes with an RSI of 61.1 and a 50-day exponential moving average of $129.16, so the stock is above its intermediate-term trend but not at an extreme reading. The combination of a lower-than-market multiple and a high ROE is the classic profile of a capital-efficient contractor rather than a high-multiple growth story.

Strategic priorities & outlook

Leidos’s most recent 10-K lays out a growth agenda built around five pillars: space and maritime; energy infrastructure; digital modernization and cyber; mission software; and managed health services. The company’s largest segment, National Security & Digital, aligns with several of those pillars, while Health & Civil gives it a second large revenue base.

Management has also flagged the completion and successful integration of the Entrust acquisition (KENE Parent, Inc.) as an operational priority, noting that achieving its expected benefits matters to the forward plan. Beyond M&A execution, Leidos intends to grow its commercial health and infrastructure businesses and to respond quickly to emerging technology trends, especially artificial intelligence. In fiscal 2025, company-funded research and development expense was $187 million, or 1.1% of consolidated revenues, which is modest for a services contractor and suggests R&D is focused on customer-funded application rather than speculative product development.

Macro & geopolitical exposure

Because Leidos is classified in Technology / Information Technology Services but derives 87% of revenue from U.S. government customers, its macro exposure is best understood through a federal-spending and regulatory lens rather than a purely commercial IT lens. Key macro drivers include defense and civilian agency budgets, appropriations timing, continuing resolutions, and shifts in procurement priorities after elections or geopolitical events.

Regulatory exposure is also material. Programs involving defense hardware, cyber systems, and cleared personnel must navigate export controls such as ITAR, FedRAMP authorization for cloud-based offerings, and stringent cybersecurity requirements. Currency risk is limited because only 8% of revenue comes from outside the United States. Supply-chain exposure is more relevant for defense hardware and detection products than for pure services, but electronic components and specialized electromechanical parts can still create bottlenecks. Overall, the stock’s 0.55 beta partly reflects the fact that revenues are tied to long-duration government programs rather than short-term economic cycles.

Recent developments

Recent headlines illustrate both operational momentum and institutional position changes. On August 31, 2026, Curtiss-Wright announced it had been awarded $40 million in contracts by Leidos to supply electromechanical actuation and mission computing for the U.S. Army Indirect Fire Protection Capability program, according to businesswire.com. The same day, defenseworld.net reported that the Canada Pension Plan Investment Board sold 17,803 shares of Leidos, while Caisse de depot et placement du Quebec sold 19,594 shares. Both sales are small relative to a $17.6 billion market-cap company, so they read more like portfolio rebalancing than a fundamental verdict.

Earlier, on August 25, 2026, zacks.com published “Why Leidos (LDOS) is a Top Growth Stock for the Long-Term,” which highlights the stock’s long-term positioning narrative. The mixed news flow—an operational subcontract award plus minor institutional selling—does not change the structural story, but it does underscore that analyst commentary remains constructive even as some large investors trim.

Earnings behavior & post-earnings drift

LDOS has a strikingly consistent earnings record. Over the last eight reported quarters, the company beat consensus EPS in every quarter, for a 100% beat rate and an average earnings surprise of 16%. The unofficial consensus appears to systematically underestimate Leidos’s earnings power. More importantly for traders, the average 5-day price move after an earnings report is +2.15%, classified as an upward post-earnings drift.

The last four quarters show both the strength and the nuance:

• On August 4, 2026, Leidos reported EPS of $3.26 versus an estimate of $2.91, a 12% surprise. The stock fell 2.87% the next day but rallied 7.88% over the following five days.
• On May 5, 2026, EPS came in at $3.13 against $2.90, a 7.9% surprise, with a next-day drop of 1.67% and a five-day decline of 6.41%.
• On February 17, 2026, EPS was $2.76 versus $2.61, a 5.7% surprise, producing a 6.19% next-day gain and a 7.80% five-day gain.
• On November 4, 2025, EPS was $3.05 versus $2.71, a 12.5% surprise, yet the stock fell 2.25% the next day and 0.65% over the following five days.

This split behavior—reliable bottom-line beats but inconsistent immediate price reactions—means the drift statistics are driven by a few strong multi-day moves rather than a uniform one-day pop. The next scheduled report is November 3, 2026, before the market open, with a consensus EPS estimate of $3.05.

For a deeper dive into how sell-side and institutional models are positioned around these figures, see the full institutional verdict and consensus breakdown on the platform.