Leidos Holdings (NYSE:LDOS) Secures $205 Million Contract And Reaffirms 2025 Earnings Guidance

Leidos Holdings (NYSE:LDOS) recently announced strong Q1 earnings, with sales and net income significantly higher than the previous year. Alongside reaffirming its revenue guidance for 2025, the company secured a substantial $205 million contract with the Defense Threat Reduction Agency to enhance IT systems, potentially strengthening its market position in the defense sector. These developments, coupled with the declaration of a $0.40 per share dividend, are key elements that could have influenced the company's 11% price increase over the past month. This upward momentum aligns with broader market trends, where earnings optimism has buoyed stock prices.

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The recent developments for Leidos Holdings, such as the secured $205 million Defense Threat Reduction Agency contract and reaffirmed revenue guidance, have reinforced the company's position in the defense sector. These factors, along with the declaration of a $0.40 per share dividend, likely contributed to the recent 11% increase in the stock's price. Over a five-year period ending now in May 2025, Leidos achieved a total return of 55.24%, indicating robust long-term performance. However, over the past year, the company underperformed the US Professional Services industry, which returned 6.9%.

Leidos' strategic emphasis on IT modernization and increased privatization through its NorthStar 2030 initiative is projected to bolster future revenue and earnings growth. The new contracts and a strong backlog create a solid foundation for continued financial performance. Analysts forecast revenue growth of 3.2% per year and a rise in profit margins from 7.5% to 8.1% by 2028. This growth trajectory is supported by share repurchases, which enhance earnings per share and leverage the company's financial structure. The analyst consensus price target of US$167.47 represents an 11.9% increase from the current share price of approximately US$147.56, aligning with forward-looking earnings growth and margin improvements.

Explore historical data to track Leidos Holdings' performance over time in our past results report.

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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