A month has gone by since the last earnings report for Leidos (LDOS Quick QuoteLDOS - Free Report) . Shares have lost about 2.8% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Leidos due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Leidos Holdings, Inc. before we dive into how investors and analysts have reacted as of late.

Leidos Holdings Q4 Earnings Beat Estimates, Revenues Decline Y/Y

Leidos Holdings’ fourth-quarter 2025 adjusted earnings of $2.76 per share beat the Zacks Consensus Estimate of $2.57 by 7.4%. The bottom line also improved 16.5% from $2.37 registered in the prior-year quarter.

LDOS reported GAAP earnings of $2.53 per share, implying an improvement from the prior-year quarter’s level of $2.12.

The year-over-year upside in the bottom line can be attributed to higher operating income than the prior-year level.

LDOS’ 2025 adjusted earnings of $11.99 per share beat the Zacks Consensus Estimate of $11.76. The bottom line also increased 17.4% from $10.21 registered in the prior-year quarter.

LDOS’ Total Revenues

Total revenues of $4.21 billion missed the Zacks Consensus Estimate of $4.25 billion by 1.1%. The top line also decreased 3.6% year over year, primarily due to the six-week government shutdown in the fourth quarter of 2025.

For 2025, the company reported revenues worth $17.17 billion, reflecting a solid improvement from $16.66 billion registered in 2024. The full-year top line missed the consensus estimate of $17.22 billion.

LDOS’ Backlog

The company recorded a total backlog of $49.03 billion, up from $48.39 billion at the end of 2024. Of this amount, $9.69 billion was funded.

Operational Statistics of LDOS

The cost of revenues decreased 5.6% year over year to $3.65 billion.

LDOS reported an adjusted operating income of $473 million compared with $421 million in the year-ago quarter.

Interest expenses totaled $48 million, which increased from the year-ago figure of $47 million.

Leidos’ Segmental Performance

National Security and Digital: Net revenues in this segment decreased 2.5% year over year to $1.85 billion.

Adjusted operating income improved to $196 million from the year-ago level of $175 million. Adjusted operating margin was 10.6%, which increased from the prior-year figure.

Health & Civil: The segment recorded revenues of $1.21 billion, down 9.3% year over year.

Adjusted operating income totaled $264 million compared with $279 million in the year-ago quarter. The adjusted operating margin was 21.9%, which increased year over year.

Commercial & International: Revenues in this segment amounted to $610 million, up 1% year over year.

This segment recorded an adjusted operating income of $51 million compared with $40 million in the year-ago quarter. The adjusted operating margin was 8.4%, up year over year.

Defense Systems: Revenues in this segment amounted to $546 million, up 1.3% year over year.

This segment recorded an adjusted operating income of $44 million compared with $2 million in the year-ago period. The adjusted operating margin was 8.1%, up year over year.

LDOS’ Financials

Cash and cash equivalents totaled $1.11 billion as of Jan. 2, 2026, compared with $849 million as of Jan. 3, 2025.

As of Jan. 2, 2026, the long-term debt, net of the current portion, amounted to $4.63 billion compared with $4.05 billion as of Jan. 3, 2025.

Net cash flow from operating activities totaled $1.75 billion at the end of 2025 compared with $1.44 billion recorded a year ago.

LDOS’ 2026 Guidance

Leidos Holdings expects to generate adjusted earnings in the range of $12.05-$12.45 per share. The Zacks Consensus Estimate for earnings is pegged at $12.35 per share, which lies above the midpoint of the company’s guided range.

LDOS expects 2026 revenues to be in the band of $17.50-$17.90 billion. The Zacks Consensus Estimate for revenues is pegged at $17.87 billion, above the midpoint of the company’s guided range.

It still expects to generate cash flow from operating activities of approximately $1.75 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

At this time, Leidos has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of B on the value side, putting it in the second quintile for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Leidos has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Leidos belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, Jack Henry (JKHY Quick QuoteJKHY - Free Report) , has gained 4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Jack Henry reported revenues of $619.33 million in the last reported quarter, representing a year-over-year change of +7.9%. EPS of $1.72 for the same period compares with $1.34 a year ago.

Jack Henry is expected to post earnings of $1.44 per share for the current quarter, representing a year-over-year change of -5.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.7%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Jack Henry. Also, the stock has a VGM Score of C.