Leidos' Expanded Role in Starlab and Dividend Boost Might Change the Case for Investing in LDOS

• Starlab Space LLC recently announced that Leidos will lead the assembly, integration, and testing of its commercial space station in the US, while Leidos also reported higher year-over-year third-quarter sales and earnings, increased its quarterly cash dividend, and provided updates on share repurchases and annual revenue guidance.
• This multi-faceted update not only highlights Leidos' operational progress and new aerospace collaboration, but also underscores its continued focus on enhancing shareholder returns and maintaining growth momentum.
• We'll examine how Leidos' expanded role with Starlab in commercial space operations may influence its future growth outlook and earnings profile.

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Leidos Holdings Investment Narrative Recap

To own Leidos Holdings, you need to believe in its ability to capitalize on strong, recurring government and commercial contracts in sectors like defense, intelligence, and now commercial space operations. While the recent Starlab collaboration may further reinforce Leidos' visibility and strengthen its position as a systems integrator in a high-growth industry, it does not fundamentally change the most important short term catalyst, government contract continuity, nor the greatest risk: heavy exposure to federal budget shifts.

Among Leidos’ recent announcements, the confirmation of its full-year 2025 revenue guidance is particularly relevant, signaling stability despite broadening into commercial space partnerships. This ongoing commitment to delivering on expectations helps support the company’s argument for predictable growth catalysts, even as competitive and procurement pressures continue to shape future opportunities.

Yet, in contrast to these strengths, investors should be aware of how sudden government funding realignments could…

Read the full narrative on Leidos Holdings (it's free!)

Leidos Holdings is projected to reach $18.6 billion in revenue and $1.5 billion in earnings by 2028. This outlook requires 3.0% annual revenue growth and a $0.1 billion increase in earnings from the current $1.4 billion.

Uncover how Leidos Holdings' forecasts yield a $201.83 fair value, a 5% upside to its current price.

Exploring Other Perspectives

Six private investors in the Simply Wall St Community have fair value estimates for Leidos ranging from US$152.74 to US$299.53 per share. While views differ widely, keep in mind the persistent risk from shifting government priorities and how this could influence long-term outlooks, explore several alternative viewpoints before forming your own conclusions.

Explore 6 other fair value estimates on Leidos Holdings - why the stock might be worth 20% less than the current price!

Build Your Own Leidos Holdings 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 Leidos Holdings research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Leidos Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Leidos Holdings' 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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