Leidos Holdings (LDOS): Evaluating Valuation After Strong Q3 Results and Strategic Growth Initiatives

Leidos Holdings (LDOS) drew attention this week after reporting Q3 2025 results that showed solid revenue growth and improved profitability. The company reaffirmed its 2025 revenue guidance, increased its dividend, and remains focused on key strategic initiatives.

See our latest analysis for Leidos Holdings.

After a big year of strategic wins, including new buybacks as well as partnerships in cyber defense and commercial space, Leidos Holdings has seen its momentum really pick up. The current share price of $196.98 reflects strong investor confidence, with a year-to-date share price return of 37.5%. However, while the long-term track record is impressive, with a 3-year total shareholder return of nearly 98%, recent total returns have been more muted. This indicates that the stock’s rally has been driven mainly by price gains rather than dividends reinvested.

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With the stock posting strong gains and analysts raising their targets, the key question now is whether Leidos remains undervalued after its recent run, or if all that future growth is already reflected in today's price.

Most Popular Narrative: 2.4% Undervalued

With a narrative fair value of $201.83 just above the last close at $196.98, sentiment leans optimistic for Leidos. Explore what is driving that difference.

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 (such as FAA air traffic modernization, Golden Dome, and maritime autonomy), which are expected to drive robust future revenue growth across core projects.

Read the complete narrative.

Want to know which industry trends, powerful growth engines, and margin assumptions shape that premium? This narrative’s analysis is based on forward-looking moves and ambitious projections. See which levers make the difference.

Result: Fair Value of $201.83 (UNDERVALUED)

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

However, shifting federal priorities or unforeseen regulatory changes could quickly challenge Leidos’s momentum and may limit analysts’ optimistic outlook.

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

Build Your Own Leidos Holdings Narrative

Feel like your outlook might differ or wish to test your own analysis? You can put together a personal take on Leidos in just minutes. Do it your way.

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.

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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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