Stock of the Day

March 6, 2020

Leidos (LDOS)

$106.51
-$1.78 (-1.6%)
Market Cap: $13.39B

About Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, 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, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. 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; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.

Today's Trend

Leidos Holdings, Inc. (LDOS) — Shares are trading lower as investors parse a mixed set of catalysts from the company’s Q1 report, guidance raise and fresh analyst actions.

  • Q1 results beat estimates and management raised full-year guidance — Leidos reported $3.13 EPS on $4.4B revenue (both above consensus), non‑GAAP EPS up year‑over‑year, backlog strength and raised FY2026 revenue/EPS guidance. This supports longer‑term revenue visibility. Leidos Posts Strong First Quarter Results and Raises Full-Year Guidance
  • Management struck a confident tone on the earnings call and highlighted demand in intelligence, energy and ATC that supports backlog growth — investors looking for secular defense/IT tailwinds may view this favorably. Leidos Holdings Earnings Call Signals Confident Outlook
  • Analysts trimmed price targets but still show significant upside — Stifel cut its target to $193 (hold) and RBC trimmed to $180 while maintaining an outperform stance; the revisions moderate sentiment but leaves upside per those models. Stifel Nicolaus price target change (Benzinga) RBC price target change (TickerReport)
  • Profitability and acquisition-related costs raised concern — GAAP net income and EPS declined year‑over‑year; management disclosed ~$39M of Entrust-related costs and indicated the guidance lift was largely acquisition‑driven rather than organic margin improvement. These points drove a sell‑the‑news reaction and earlier sharp intraday weakness. Leidos falls as investors parse Q1 margin pressure (QuiverQuant)
  • Insider and institutional positioning notes add caution — recent insider sales and mixed hedge‑fund/institutional flows highlighted by analytics providers can heighten near‑term volatility. Insider & institutional activity (QuiverQuant)

Bottom line: LDOS’s beat and raised guidance are constructive for medium‑term fundamentals, but near‑term selling reflects investor worry about margin pressure, acquisition costs and trimmed analyst targets. That mix is driving the stock lower today as the market digests whether future organic margin improvement will follow the acquisition‑led lift.

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