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Here's Why You Should Add Leidos Stock to Your Portfolio Right Now
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Leidos Holdings, Inc. (LDOS - Free Report) , with rising earnings estimates, robust return on equity (ROE) and a solid backlog, offers a great investment opportunity in the Zacks Aerospace Defense industry.
Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock an attractive investment pick at the moment.
Growth Projections & Surprise History of LDOS
The Zacks Consensus Estimate for Leidos’ 2025 earnings per share (EPS) has increased 2.5% to $10.49 in the past 30 days and indicates a 2.7% improvement from the year-ago quarter’s figure.
The consensus estimate for total revenues is $17.09 billion, which indicates growth of 2.6% from the 2024 figure.
Leidos’ long-term (three to five years) earnings growth rate is pegged at 7.4%.
It delivered an average earnings surprise of 28.34% in the last four quarters.
LDOS’ ROE
ROE indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, LDOS’ ROE is 30.93% compared with its industry’s average of 9.55%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
Leidos’ Debt Position
Currently, the company’s total debt to capital is 51.15%, better than the industry’s average of 55%.
Leidos’ times interest earned (TIE) ratio at the end of the fourth quarter was 9.49. A TIE ratio of more than one indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
LDOS’ Liquidity
Leidos’ current ratio at the end of the fourth quarter was 1.21. A current ratio of greater than one indicates the company’s ability to meet its future short-term liabilities without difficulties.
Rising Backlog of Leidos
Contract wins from the Pentagon and other U.S allies for its cost-effective military technologies are one of Leidos’ key revenue sources. These contract wins help enhance the company's bookings and backlog.
Leidos had an excellent backlog of $43.55 billion as of Jan. 3, 2025, up from $36.96 billion in the prior year. Such significant backlog trends improve the company's revenue-generating possibilities for the following quarters.
LDOS Stock’s Price Performance
Shares of LDOS have gained 2.7% in the past month against the industry’s 0.9% decline.
Howmet Aerospace delivered an average earnings surprise of 8.33% in the last four quarters. The Zacks Consensus Estimate for HWM’s 2025 sales is pinned at $8.1 billion, which indicates year-over-year growth of 8.5% from the year-ago period.
Heico delivered an average earnings surprise of 11.92% in the last four quarters. The Zacks Consensus Estimate for HEI’s fiscal 2025 sales is pinned at $4.28 billion, which indicates a year-over-year growth of 11%.
Leonardo DRS delivered an average earnings surprise of 22.82% in the last four quarters. The Zacks Consensus Estimate for DRS’ 2025 sales is pinned at $3.5 billion, which indicates year-over-year growth of 8.4%.
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Here's Why You Should Add Leidos Stock to Your Portfolio Right Now
Leidos Holdings, Inc. (LDOS - Free Report) , with rising earnings estimates, robust return on equity (ROE) and a solid backlog, offers a great investment opportunity in the Zacks Aerospace Defense industry.
Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock an attractive investment pick at the moment.
Growth Projections & Surprise History of LDOS
The Zacks Consensus Estimate for Leidos’ 2025 earnings per share (EPS) has increased 2.5% to $10.49 in the past 30 days and indicates a 2.7% improvement from the year-ago quarter’s figure.
The consensus estimate for total revenues is $17.09 billion, which indicates growth of 2.6% from the 2024 figure.
Leidos’ long-term (three to five years) earnings growth rate is pegged at 7.4%.
It delivered an average earnings surprise of 28.34% in the last four quarters.
LDOS’ ROE
ROE indicates how efficiently a company has been utilizing its funds to generate higher returns. Currently, LDOS’ ROE is 30.93% compared with its industry’s average of 9.55%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.
Leidos’ Debt Position
Currently, the company’s total debt to capital is 51.15%, better than the industry’s average of 55%.
Leidos’ times interest earned (TIE) ratio at the end of the fourth quarter was 9.49. A TIE ratio of more than one indicates that the company will be able to meet its interest payment obligations in the near term without any problems.
LDOS’ Liquidity
Leidos’ current ratio at the end of the fourth quarter was 1.21. A current ratio of greater than one indicates the company’s ability to meet its future short-term liabilities without difficulties.
Rising Backlog of Leidos
Contract wins from the Pentagon and other U.S allies for its cost-effective military technologies are one of Leidos’ key revenue sources. These contract wins help enhance the company's bookings and backlog.
Leidos had an excellent backlog of $43.55 billion as of Jan. 3, 2025, up from $36.96 billion in the prior year. Such significant backlog trends improve the company's revenue-generating possibilities for the following quarters.
LDOS Stock’s Price Performance
Shares of LDOS have gained 2.7% in the past month against the industry’s 0.9% decline.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other top-ranked stocks from the same sector are Howmet Aerospace (HWM - Free Report) , Heico (HEI - Free Report) and Leonardo DRS, Inc. (DRS - Free Report) . Each of these stocks carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Howmet Aerospace delivered an average earnings surprise of 8.33% in the last four quarters. The Zacks Consensus Estimate for HWM’s 2025 sales is pinned at $8.1 billion, which indicates year-over-year growth of 8.5% from the year-ago period.
Heico delivered an average earnings surprise of 11.92% in the last four quarters. The Zacks Consensus Estimate for HEI’s fiscal 2025 sales is pinned at $4.28 billion, which indicates a year-over-year growth of 11%.
Leonardo DRS delivered an average earnings surprise of 22.82% in the last four quarters. The Zacks Consensus Estimate for DRS’ 2025 sales is pinned at $3.5 billion, which indicates year-over-year growth of 8.4%.