Leidos beats Q4 adjusted EPS expectations, helped by growth in priority markets

Overview

• Defense contractor's Q4 revenue fell 4%, missing analyst expectations

• Adjusted EPS for Q4 beat analyst expectations, rising 16% yr/yr

• Company entered agreement to acquire Entrust for $2.4 bln

Outlook

• Leidos forecasts FY26 revenue between $17.5 bln and $17.9 bln

• Company expects FY26 non-GAAP diluted EPS of $12.05 to $12.45

• Leidos anticipates FY26 cash flows from operations around $1.75 bln

Result Drivers

• REVENUE DECLINE - Q4 revenue fell 4% due to an extra work week in the prior year and a six-week government shutdown

• EARNINGS GROWTH - Increased efficiencies and cost control drove a 19% rise in diluted EPS for Q4

• STRATEGIC FOCUS - Growth in priority markets like space, energy, and digital modernization supported results

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the it services & consulting peer group is "buy"

• Wall Street's median 12-month price target for Leidos Holdings Inc is $222.34, about 26.1% above its February 13 closing price of $176.30

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release: ID:nPn4MbJ7ha

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