NYSE:LDOS

Stock Analysis Report

Executive Summary

Leidos Holdings, Inc. provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally.

Rewards

PE ratio (21.7x) is below the IT industry average (32x)

Earnings are forecast to grow 3.34% per year

Earnings grew by 33.1% over the past year

Risk Analysis

Has a high level of debt



Snowflake Analysis

Solid track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Leidos Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LDOS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.4%

LDOS

-1.5%

US IT

-2.7%

US Market


1 Year Return

75.2%

LDOS

39.1%

US IT

21.2%

US Market

Return vs Industry: LDOS exceeded the US IT industry which returned 39.9% over the past year.

Return vs Market: LDOS exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

LDOSIndustryMarket
7 Day-2.4%-1.5%-2.7%
30 Day2.6%4.4%0.09%
90 Day16.2%11.1%6.9%
1 Year78.2%75.2%40.6%39.1%23.8%21.2%
3 Year121.3%108.5%108.5%99.5%48.1%38.6%
5 Year259.2%135.7%152.1%129.9%72.5%53.4%

Price Volatility Vs. Market

How volatile is Leidos Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Leidos Holdings undervalued compared to its fair value and its price relative to the market?

21.68x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: LDOS ($100.79) is trading above our estimate of fair value ($94.3)

Significantly Below Fair Value: LDOS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: LDOS is good value based on its PE Ratio (21.7x) compared to the IT industry average (32x).

PE vs Market: LDOS is poor value based on its PE Ratio (21.7x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: LDOS is poor value based on its PEG Ratio (6.5x)


Price to Book Ratio

PB vs Industry: LDOS is overvalued based on its PB Ratio (4.4x) compared to the US IT industry average (4.2x).


Next Steps

Future Growth

How is Leidos Holdings forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

3.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LDOS's forecast earnings growth (3.3% per year) is above the savings rate (1.7%).

Earnings vs Market: LDOS's earnings (3.3% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: LDOS's earnings are forecast to grow, but not significantly.

Revenue vs Market: LDOS's revenue (4.8% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: LDOS's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LDOS's Return on Equity is forecast to be high in 3 years time (26.5%)


Next Steps

Past Performance

How has Leidos Holdings performed over the past 5 years?

43.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LDOS has high quality earnings.

Growing Profit Margin: LDOS's current net profit margins (6.2%) are higher than last year (5%).


Past Earnings Growth Analysis

Earnings Trend: LDOS has become profitable over the past 5 years, growing earnings by 43.1% per year.

Accelerating Growth: LDOS's earnings growth over the past year (33.1%) is below its 5-year average (43.1% per year).

Earnings vs Industry: LDOS earnings growth over the past year (33.1%) exceeded the IT industry 16.2%.


Return on Equity

High ROE: LDOS's Return on Equity (20.8%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Leidos Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: LDOS's short term assets ($2.9B) exceed its short term liabilities ($2.5B).

Long Term Liabilities: LDOS's short term assets ($2.9B) do not cover its long term liabilities ($3.6B).


Debt to Equity History and Analysis

Debt Level: LDOS's debt to equity ratio (95.2%) is considered high.

Reducing Debt: LDOS's debt to equity ratio has reduced from 130.7% to 95.2% over the past 5 years.

Debt Coverage: LDOS's debt is well covered by operating cash flow (30%).

Interest Coverage: LDOS's interest payments on its debt are well covered by EBIT (6.2x coverage).


Balance Sheet

Inventory Level: LDOS has a low level of unsold assets or inventory.

Debt Coverage by Assets: LDOS's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is Leidos Holdings's current dividend yield, its reliability and sustainability?

1.35%

Current Dividend Yield


Dividend Yield vs Market

company1.3%marketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years1.4%

Current dividend yield vs market & industry

Notable Dividend: LDOS's dividend (1.35%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: LDOS's dividend (1.35%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: LDOS has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: LDOS has only been paying a dividend for 8 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28%), LDOS's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LDOS's dividends in 3 years are forecast to be well covered by earnings (25.5% payout ratio).


Next Steps

Management

What is the CEO of Leidos Holdings's salary, the management and board of directors tenure and is there insider trading?

3.5yrs

Average management tenure


CEO

Roger Krone (62yo)

5.5yrs

Tenure

US$9,834,974

Compensation

Mr. Roger A. Krone has been the Chief Executive Officer of Leidos, Inc. since July, 2014. Mr. Krone has been the Chief Executive Officer of Leidos Holdings, Inc. since July 14, 2014. He served as the Presi ...


CEO Compensation Analysis

Compensation vs Market: Roger's total compensation ($USD9.83M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Roger's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.5yrs

Average Tenure

60yo

Average Age

Experienced Management: LDOS's management team is considered experienced (3.5 years average tenure).


Board Age and Tenure

5.6yrs

Average Tenure

64.5yo

Average Age

Experienced Board: LDOS's board of directors are considered experienced (5.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$42,28420 Aug 19
Gary May
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares500
Max PriceUS$84.57

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Jim Reagan (60yo)

    Executive VP & CFO

    • Tenure: 4.5yrs
    • Compensation: US$2.76m
  • Jerald Howe (63yo)

    Executive VP & General Counsel

    • Tenure: 2.5yrs
    • Compensation: US$2.01m
  • Roger Krone (62yo)

    Chairman & CEO

    • Tenure: 5.5yrs
    • Compensation: US$9.83m
  • Jon Scholl (57yo)

    President of Health Group

    • Tenure: 3.4yrs
    • Compensation: US$2.07m
  • Michele Brown

    Chief Ethics & Compliance Officer and Senior VP

    • Tenure: 3.7yrs
  • Kelly Hernandez

    Senior Vice President of Investor Relations

    • Tenure: 5.8yrs
  • Melissa Koskovich

    SVP & Director of Corporate Communications and Marketing

    • Chris Cage (47yo)

      Corporate Controller & Chief Accounting Officer

      • Tenure: 0.6yrs
    • Steve Hull

      Senior VP & Chief Information Officer

      • Jim Carlini

        Chief Technology Officer

        • Tenure: 1yrs

      Board Members

      • Noel Williams (64yo)

        Independent Director

        • Tenure: 6.3yrs
        • Compensation: US$280.00k
      • Surya Mohapatra (69yo)

        Independent Director

        • Tenure: 3.4yrs
        • Compensation: US$265.00k
      • Bob Shapard (63yo)

        Lead Director

        • Tenure: 2yrs
        • Compensation: US$295.00k
      • Harry M. Kraemer (64yo)

        Independent Director

        • Tenure: 22.8yrs
        • Compensation: US$277.50k
      • Lawrence Nussdorf (72yo)

        Independent Director

        • Tenure: 9.3yrs
        • Compensation: US$300.00k
      • Roger Krone (62yo)

        Chairman & CEO

        • Tenure: 5.5yrs
        • Compensation: US$9.83m
      • Mim John (70yo)

        Independent Director

        • Tenure: 12.6yrs
        • Compensation: US$280.00k
      • Greg Dahlberg (68yo)

        Independent Director

        • Tenure: 3.4yrs
        • Compensation: US$265.00k
      • David Fubini (65yo)

        Independent Director

        • Tenure: 6.3yrs
        • Compensation: US$265.00k
      • Gary May (54yo)

        Independent Director

        • Tenure: 4.9yrs
        • Compensation: US$280.00k

      Company Information

      Leidos Holdings, Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Leidos Holdings, Inc.
      • Ticker: LDOS
      • Exchange: NYSE
      • Founded: 1969
      • Industry: IT Consulting and Other Services
      • Sector: Software
      • Market Cap: US$14.265b
      • Shares outstanding: 141.56m
      • Website: https://www.leidos.com

      Number of Employees


      Location

      • Leidos Holdings, Inc.
      • 11951 Freedom Drive
      • Reston
      • Virginia
      • 20190
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      S6IADB (Deutsche Boerse AG)YesCommon StockDEEUROct 2006
      LDOSNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2006
      LDOS *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 2006

      Biography

      Leidos Holdings, Inc. provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. It operates through three segments: Defense Solutions, Civil, and Health. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, Department of Defense, military services, the U.S. Department of Homeland Security, and government agencies of U.S. allies abroad, as well as other federal, civilian, and commercial customers in the national security industry. Its solutions include technology, intelligence systems, command and control, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to Air Navigation Service providers, including the Federal Aviation Administration, Transportation Security Administration, and airport operators; and vehicle and cargo inspection system, which enables the scanning of vehicles and cargo that produces an image using a low radiation dose. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; federal environment and infrastructure; and logistics services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people worldwide, including complex systems integration, managed health services, enterprise IT transformation, and life sciences services. The company has a strategic alliance with Clarify Health Solutions to deliver the company-generated observed and predictive insights directly into healthcare operations through its careC2 platform. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/28 00:18
      End of Day Share Price2020/01/27 00:00
      Earnings2019/09/27
      Annual Earnings2018/12/28


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.