Will Sea Dagger’s AI-Driven Tech Shift Leidos Holdings' (LDOS) Role in Government Defense Contracts?

• Leidos recently unveiled the Sea Dagger, a next-generation Commando Insertion Craft for the Royal Navy, featuring high speed, modular mission systems, and autonomous technologies tailored for modern maritime operations.
• This unveiling positions Leidos as a prominent innovator in advanced maritime defense solutions, aligning with major UK and AUKUS defense modernization priorities.
• We'll explore how the Sea Dagger launch, leveraging autonomy and AI, could shape Leidos Holdings' government contract growth outlook.

Trump's oil boom is here - pipelines are primed to profit. Discover the 22 US stocks riding the wave.

Leidos Holdings Investment Narrative Recap

To be a shareholder in Leidos Holdings, you need confidence in the company’s ability to capture long-term government spending on defense modernization and advanced technology, while managing its reliance on large public sector contracts. The announcement of Sea Dagger enhances Leidos’ credentials in maritime autonomy and aligns with top spending priorities, but gives only an incremental boost to near-term government contract momentum, which remains the company’s key catalyst. The largest risk continues to be shifts in government funding priorities, which could disrupt expected revenue growth if budgets tighten.

Among recent developments, Leidos winning a $128 million FBI task order for agile software development illustrates how its expertise in secure, high-tech government solutions is translating into new business opportunities. This aligns with the same digital innovation and defense modernization themes seen in the Sea Dagger project, further supporting the company’s biggest catalyst: continued multi-year growth in national security and technology contracts.

Yet, despite these advances, if defense spending priorities change faster than expected, investors need to be aware that...

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 a 3.0% annual revenue growth rate and a $0.1 billion increase in earnings from the current $1.4 billion.

Uncover how Leidos Holdings' forecasts yield a $186.69 fair value, a 4% upside to its current price.

Exploring Other Perspectives

Eight fair value estimates from the Simply Wall St Community range from US$102 to US$285.81. While high expectations for government modernization support optimism, investor forecasts remind you opinions vary widely and signal multiple possible outcomes for Leidos’ future.

Explore 8 other fair value estimates on Leidos Holdings - why the stock might be worth as much as 60% more 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 3 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.

Ready To Venture Into Other Investment Styles?

Early movers are already taking notice. See the stocks they're targeting before they've flown the coop:

• Outshine the giants: these 26 early-stage AI stocks could fund your retirement.
• AI is about to change healthcare. These 30 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.
• Find companies with promising cash flow potential yet trading below their fair value.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com