LDOS

Business profile & competitive position

Leidos Holdings, Inc. (LDOS) is classified in the Technology sector, specifically Information Technology Services. Through its operating subsidiary Leidos, Inc., the company functions as a science, research, and engineering firm that supplies digital and mission-focused solutions to U.S. government and commercial customers worldwide. Its operations are divided into four reportable segments: National Security & Digital, Health & Civil, Commercial & International, and Defense Systems. In fiscal 2025, the revenue mix was National Security & Digital 44%, Health & Civil 30%, Commercial & International 13%, and Defense Systems 13%.

The service lineup includes 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. Customer concentration is high: approximately 87% of fiscal 2025 revenue came from U.S. government contracts as a prime or subcontractor, while approximately 8% came from entities outside the United States. The company also reports that roughly 53% of employees hold U.S. security clearances and about 19% are military veterans.

The financial footprint supports the idea of a contractor-style moat rather than a pure software moat. The net margin is 7.9%, which is moderate for technology services and consistent with cost-reimbursable and fixed-price federal work. The ROE of 27.6% is materially stronger, signaling that Leidos generates a relatively high return on the equity it deploys. Company-funded R&D was $187 million in fiscal 2025, or only 1.1% of consolidated revenues, which is low compared with product-driven technology peers and reinforces the services and integration nature of the business.

Financial posture

As of the latest snapshot, LDOS carried a market capitalization of $15.4 billion, traded at $122.28, and posted a P/E ratio of 11.3 with a beta of 0.57. That valuation multiple sits below what many commercial IT-services and software names command, while the low beta indicates the stock has historically moved roughly half as much as the broader market.

Profitability metrics include a net margin of 7.9% and an ROE of 27.6%. The gap between the modest margin and the elevated ROE suggests the balance sheet is leveraged efficiently through liabilities, contract advances, or capital-light working-capital management, though no specific debt figure was included in the current data snapshot. On the technical side, the stock’s RSI is 37.1 and the 50-day EMA is $128.56, so price is currently below its near-term moving average.

Strategic priorities & outlook

Leidos’s most recent SEC 10-K filing outlines several operational priorities. The company intends to pursue strategic growth across five pillars: space and maritime; energy infrastructure; digital modernization and cyber; mission software; and managed health services. A second priority is to complete and successfully integrate the acquisition of Entrust (KENE Parent, Inc.) so that the expected benefits materialize. Leidos also wants to grow the commercial health and infrastructure businesses, diversifying beyond its dominant U.S. government base. Finally, management emphasizes executing the business plan and long-term initiatives while responding rapidly to emerging technology trends, particularly artificial intelligence.

Macro & geopolitical exposure

Because Leidos is an Information Technology Services provider heavily dependent on U.S. federal spending, its exposures are largely macro-policy-driven rather than consumer-cycle-driven. The single biggest driver is the U.S. federal budget and defense appropriations process, including budgets for the Department of Defense, homeland security, intelligence agencies, and federal health programs. Shifts in procurement policy, contract mix, or delayed awards can materially affect revenue visibility.

The company is also exposed to regulation around cyber, data privacy, artificial intelligence, and export-controlled technologies, since its work spans cyber operations, AI-enabled mission software, and security detection systems. With roughly 8% of revenue coming from outside the United States, currency fluctuation and foreign military sales policy matter, even if they are secondary to the domestic business. Supply-chain and labor risks are concentrated in cleared talent; more than half the workforce holds security clearances, making wage pressure and clearance backlogs a recurring industry concern. Energy infrastructure work adds sensitivity to federal energy and grid modernization policy, while defense systems activity is tied to broader geopolitical tensions and modernization priorities.

Recent developments

Recent headlines illustrate a market torn between near-term price weakness and longer-term bullish themes. On September 24, 2026, Zacks.com noted that Leidos “Suffers a Larger Drop Than the General Market: Key Insights,” the same day that DefenseWorld.net reported State Street Corp holds a $646.43 million position in Leidos Holdings. On September 23, 2026, 247wallst.com published “US Running Low on the 2 Weapons It Would Need Most,” feeding the broader defense-replenishment narrative. A day earlier, on September 22, 2026, Seeking Alpha ran “Leidos: Homeland Surge, Defense Bookings, And A Bargain Multiple,” highlighting investor interest in homeland-security demand, defense bookings, and the stock’s valuation. Together, these items suggest the stock has been under pressure even as institutional ownership remains substantial and analysts debate whether defense and homeland-security demand can support a higher multiple.

Earnings behavior & post-earnings drift

Leidos has compiled a strong quantitative earnings record. Over the last eight reported quarters, LDOS has beaten consensus EPS estimates 8 out of 8 times for a 100% beat rate, with an average earnings surprise of 16%. The average 5-day price move after earnings across those quarters has been +2.15%, classified as an upward drift.

The most recent quarters show that next-day reactions do not always follow the headline beat. On August 4, 2026, Leidos reported EPS of $3.26 versus a $2.91 estimate, a 12% surprise; the stock fell 2.87% the next day but gained 7.88% over the following five trading days. On May 5, 2026, the company earned $3.13 against a $2.90 estimate, a 7.9% surprise, yet the stock slid 1.67% the next day and 6.41% over the next five days. The quarter before that, on February 17, 2026, EPS of $2.76 beat the $2.61 estimate by 5.7%, driving a 6.19% next-day gain and a 7.8% five-day gain. On November 4, 2025, a 12.5% surprise ($3.05 actual vs. $2.71 estimate) still produced a 2.25% next-day drop and a roughly 0.65% five-day decline.

The pattern implies that while Leidos consistently clears the published consensus, the market’s real expectation may already be embedded in the price, or the stock may be punished by guidance or segment commentary despite a beat. The next scheduled report is November 3, 2026, before the market open, with the current consensus EPS estimate at $3.00.

For a deeper dive into how institutional analysts and large holders are interpreting Leidos’s government-heavy backlog, margin trajectory, and defense-spending outlook, it is worth reviewing the full institutional verdict on the name.