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Can Leidos (LDOS) Be a Solid Choice for Value Investors?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Leidos Holdings, Inc. (LDOS - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Leidos has a trailing twelve months PE ratio of 14.80, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 19.89. If we focus on the long-term PE trend, Leidos’ current PE is little below its mid point level, with the number having falling rapidly over the last one year.
Further, the stock’s PE also compares favorably with the Zacks classified Aerospace/Defense industry’s trailing twelve months PE ratio, which stands at 20.75. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Leidos has a forward PE ratio (price relative to this year’s earnings) of 16.28, so it is fair to expect an increase in the company’s share price in the near future.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Leidos has a P/S ratio of about 1.02. This is much lower than the S&P 500 average, which comes in at 2.98 right now. However, as we can see in the chart below, this is almost equal to the highs for this stock in particular over the past few years.
If anything, Leidos is towards the higher end of its range in the time period from a P/S metric, which suggests that the company’s stock price has already appreciated to some degree, relative to its sales.
Broad Value Outlook
In aggregate, Leidos currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Leidos a solid choice for value investors.
What About the Stock Overall?
Though Leidos might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘F’. As a result, Leidos has a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, a glimpse on the estimate revision trend reveals that the current quarter consensus estimate witnessed no changes over the past two months, while the full year estimate has decreased 0.6% over the same time frame. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Leidos is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a robust industry rank (among the Top 8%) and a Zacks Rank #2 (Buy) instills investor confidence. Moreover, over the past one year, the Zacks Aerospace/Defense industry has outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
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Can Leidos (LDOS) Be a Solid Choice for Value Investors?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Leidos Holdings, Inc. (LDOS - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Leidos has a trailing twelve months PE ratio of 14.80, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 19.89. If we focus on the long-term PE trend, Leidos’ current PE is little below its mid point level, with the number having falling rapidly over the last one year.
Further, the stock’s PE also compares favorably with the Zacks classified Aerospace/Defense industry’s trailing twelve months PE ratio, which stands at 20.75. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Leidos has a forward PE ratio (price relative to this year’s earnings) of 16.28, so it is fair to expect an increase in the company’s share price in the near future.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Leidos has a P/S ratio of about 1.02. This is much lower than the S&P 500 average, which comes in at 2.98 right now. However, as we can see in the chart below, this is almost equal to the highs for this stock in particular over the past few years.
If anything, Leidos is towards the higher end of its range in the time period from a P/S metric, which suggests that the company’s stock price has already appreciated to some degree, relative to its sales.
Broad Value Outlook
In aggregate, Leidos currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Leidos a solid choice for value investors.
What About the Stock Overall?
Though Leidos might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘A’ and a Momentum score of ‘F’. As a result, Leidos has a Zacks VGM score—or its overarching fundamental grade—of ‘B’. (You can read more about the Zacks Style Scores here >>)
Meanwhile, a glimpse on the estimate revision trend reveals that the current quarter consensus estimate witnessed no changes over the past two months, while the full year estimate has decreased 0.6% over the same time frame. You can see the consensus estimate trend and recent price action for the stock in the chart below:
LEIDOS HOLDINGS Price and Consensus
LEIDOS HOLDINGS Price and Consensus | LEIDOS HOLDINGS Quote
Bottom Line
Leidos is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Furthermore, a robust industry rank (among the Top 8%) and a Zacks Rank #2 (Buy) instills investor confidence. Moreover, over the past one year, the Zacks Aerospace/Defense industry has outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>