A Look at Leidos (LDOS) Valuation Following Major 19-Year Kazakhstan Air Traffic Control Contract Win

Leidos Holdings (NYSE:LDOS) just landed a 19-year contract to modernize Kazakhstan's air traffic control systems. This initiative supports the country’s rapidly expanding aviation market and the agreement covers upgrades across major control centers and airport towers.

See our latest analysis for Leidos Holdings.

This new contract comes on the heels of other recent wins and positive sentiment for Leidos, feeding into strong momentum for the stock. Despite a brief pullback, with shares down 3.10% over the past day, shares have surged 16% over the past 90 days and are up 31% so far in 2025. The 1-year total shareholder return sits at a solid 13.6%, and anyone holding for the past five years has seen a remarkable 129% return. This suggests that long-term investors have been well rewarded even as the pace of gains has recently accelerated.

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With the stock having already posted impressive multi-year gains and trading just below analyst price targets, the question now is whether Leidos shares still offer significant value or if the market is already pricing in much of the anticipated growth.

Most Popular Narrative: 3.4% Undervalued

Leidos Holdings' most widely followed narrative suggests a fair value of $194.71, slightly above the last close price of $188.03. This points to a market pricing that is close but not fully reflective of expected growth. This perspective sets the scene for a closer look at the drivers fueling the company's value.

"Leidos is positioned to benefit from increased, multi-year government funding focused on national security, defense modernization, border protection, and infrastructure, particularly through the One Big Beautiful Bill and related initiatives (e.g., FAA air traffic modernization, Golden Dome, maritime autonomy), which are expected to drive robust future revenue growth across core projects."

Read the complete narrative.

Curious which assumptions turn those government contracts into higher future cash flows? The narrative’s calculation banks on a margin outlook and shrinking share count. But what is the boldest projection underlying that fair value jump? Only a deep dive into the full narrative reveals the financial levers at play.

Result: Fair Value of $194.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, changes in U.S. government spending priorities or rising competition in AI-driven contracts could quickly challenge the bullish narrative for Leidos Holdings.

Find out about the key risks to this Leidos Holdings narrative.

Build Your Own Leidos Holdings Narrative

If you see things differently or want to dig further into the data yourself, you can easily build your own take in just a few minutes. Do it your way.

A great starting point for your Leidos Holdings research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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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