Does Saudi Defense Pact And Secure Space Radio Breakthrough Change The Bull Case For Leonardo DRS (DRS)?

• Leonardo DRS, Inc. recently signed a Memorandum of Intent with Saudi Arabia’s Ministry of Defense to explore advanced digital battlefield solutions for ground vehicles and dismounted forces, while also successfully completing the first on-orbit test of its secure multi-channel software-defined radio for military satellite communications.
• Together, these moves highlight Leonardo DRS’s push to deepen its role in Middle Eastern defense modernization and to strengthen its position in high-security space-based communications for key U.S. defense agencies.
• We’ll now examine how this secure space-based software-defined radio breakthrough could reshape Leonardo DRS’s investment narrative and growth profile.

Find companies with promising cash flow potential yet trading below their fair value.

Leonardo DRS Investment Narrative Recap

To own Leonardo DRS, you need to believe in sustained demand for advanced sensing, computing and secure communications as defense customers modernize and digitize their forces. The Saudi MOD MOI and successful on-orbit software-defined radio test both support the near term catalyst of deeper international and space-based program exposure, but they do not materially change the biggest risk right now, which remains heavy dependence on large U.S. government programs and the associated budget and funding cycle.

Among recent developments, the Q3 2025 update, with US$3,550 million to US$3,600 million full year revenue guidance, is most relevant here because it frames how any incremental Middle East or space contracts could layer onto an already growing backlog and earnings base. Against that backdrop, the Saudi MOI and secure satellite communications progress fit into the broader modernization and digitization theme that underpins expectations for steady revenue growth and expanding international contribution.

Yet despite these opportunities, investors should be aware that concentrated exposure to long term U.S. defense contracts could become a pressure point if...

Read the full narrative on Leonardo DRS (it's free!)

Leonardo DRS' narrative projects $4.1 billion revenue and $351.1 million earnings by 2028. This requires 6.6% yearly revenue growth and about a $101 million earnings increase from $250.0 million today.

Uncover how Leonardo DRS' forecasts yield a $47.30 fair value, a 43% upside to its current price.

Exploring Other Perspectives

Eight fair value estimates from the Simply Wall St Community span roughly US$24 to US$372.97 per share, highlighting very different expectations. You can weigh those views against the reliance on large U.S. defense contracts and consider what that might mean for the resilience of future earnings.

Explore 8 other fair value estimates on Leonardo DRS - why the stock might be a potential multi-bagger!

Build Your Own Leonardo DRS Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Leonardo DRS research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Leonardo DRS research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Leonardo DRS' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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