Leonardo DRS (NASDAQ:DRS) Posts Earnings Results, Beats Estimates By $0.11 EPS

Leonardo DRS (NASDAQ:DRS) released its quarterly earnings results on Thursday. The company reported $0.46 earnings per share for the quarter, beating analysts’ consensus estimates of $0.35 by $0.11, Zacks reports. Leonardo DRS had a net margin of 9.40% and a return on equity of 14.49%. The company had revenue of $1.07 billion for the quarter, compared to analyst estimates of $1.03 billion. During the same period last year, the firm earned $0.29 earnings per share. The firm’s revenue was up 11.0% on a year-over-year basis.

Here are the key takeaways from Leonardo DRS’s conference call:

• Strong third-quarter execution drove $1.1 billion of revenue, up 11% year over year, 14% adjusted EBITDA margins, and adjusted diluted EPS of $0.46, up 59%.
• Bookings exceeded $1.6 billion with a 1.5x book-to-bill ratio, lifting funded backlog to a record $5.6 billion and providing substantial revenue visibility.
• Management raised and narrowed 2026 guidance to $3.95–$3.985 billion of revenue, $545–$555 million of adjusted EBITDA, and $1.50–$1.53 of adjusted EPS; IMS margins are expected to sustain around 16%, while ASC is expected to continue expanding.
• Demand remains strong across tactical radars, counter-drone systems, space sensing, and naval electric propulsion, including a $500 million counter-drone contract framework and the KDDX destroyer award in South Korea; management expects radar growth to outpace its broader 2027 framework.
• The all-cash Raft acquisition is still expected to close in the fourth quarter and be accretive in its first full year, but is excluded from 2026 guidance; elevated fourth-quarter capital expenditures are expected to bring full-year CapEx to roughly 4% of revenue.

Leonardo DRS Stock Performance

NASDAQ DRS opened at $37.68 on Friday. Leonardo DRS has a 52-week low of $32.43 and a 52-week high of $50.59. The company has a 50-day simple moving average of $36.70 and a 200 day simple moving average of $42.18. The company has a debt-to-equity ratio of 0.05, a quick ratio of 1.56 and a current ratio of 1.92. The company has a market capitalization of $10.06 billion, a PE ratio of 27.71, a price-to-earnings-growth ratio of 2.39 and a beta of 0.32.

Leonardo DRS Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Wednesday, November 25th. Investors of record on Thursday, November 12th will be given a dividend of $0.09 per share. The ex-dividend date is Thursday, November 12th. This represents a $0.36 annualized dividend and a yield of 1.0%. Leonardo DRS’s dividend payout ratio is presently 26.47%.

Key Headlines Impacting Leonardo DRS

Here are the key news stories impacting Leonardo DRS this week:

• Positive Sentiment: Q3 results exceeded expectations. Revenue rose 11% year over year to $1.07 billion, while adjusted EPS increased 59% to $0.46, ahead of the approximately $0.35–$0.36 analyst consensus. Net earnings climbed 60% to $115 million and adjusted EBITDA rose 27% to $149 million, helped by favorable business mix, operating leverage and strong execution. Leonardo DRS Announces Financial Results for Third Quarter 2026
• Positive Sentiment: Demand and future revenue visibility strengthened. Quarterly bookings reached a company-record $1.6 billion, producing a 1.5x book-to-bill ratio. Funded backlog increased 21% year over year to a record $5.6 billion, led by naval power and propulsion, tactical radar and force-protection programs. Leonardo DRS Jumps 12% as Q3 Bookings Hit Our Strongest Since Becoming a Public Company
• Positive Sentiment: Management raised 2026 guidance. New targets call for revenue of $3.95 billion–$3.985 billion, adjusted EBITDA of $545 million–$555 million and adjusted EPS of $1.50–$1.53, all above prior guidance. Analysts’ average price target also implies roughly 32% potential upside, though target-based projections are uncertain. Wall Street Analysts Believe Leonardo DRS Could Rally 32.44%
• Neutral Sentiment: Leonardo DRS declared a quarterly dividend of $0.09 per share, payable November 25 to shareholders of record November 12. The dividend supports shareholder returns but represents a modest yield of about 0.9%.
• Negative Sentiment: Analyst valuation and cash-flow concerns remain. One report cited a fair-value reduction as analysts weighed the stock’s valuation against its backlog and newer contract wins. Third-quarter free cash flow fell to $61 million from $77 million a year earlier, while cash declined to $294 million, creating a counterpoint to the earnings strength. Leonardo DRS Stock Gets Fair Value Trim

Insider Activity at Leonardo DRS

In related news, EVP Jason Rinsky sold 3,864 shares of Leonardo DRS stock in a transaction that occurred on Tuesday, August 4th. The shares were sold at an average price of $45.81, for a total value of $177,009.84. Following the sale, the executive vice president owned 23,581 shares of the company’s stock, valued at approximately $1,080,245.61. The trade was a 14.08% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Michael Dippold sold 20,317 shares of the company’s stock in a transaction that occurred on Wednesday, September 2nd. The shares were sold at an average price of $37.18, for a total value of $755,386.06. Following the completion of the transaction, the chief financial officer owned 35,143 shares in the company, valued at approximately $1,306,616.74. The trade was a 36.63% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 0.25% of the company’s stock.

Wall Street Analyst Weigh In

Several equities research analysts have commented on the stock. Weiss Ratings lowered shares of Leonardo DRS from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Thursday, October 22nd. Guggenheim assumed coverage on Leonardo DRS in a research note on Monday, September 14th. They issued a “buy” rating and a $51.00 target price on the stock. JPMorgan Chase & Co. upped their target price on Leonardo DRS from $48.00 to $53.00 and gave the company a “neutral” rating in a report on Friday, July 31st. Morgan Stanley decreased their price target on Leonardo DRS from $47.00 to $44.00 and set an “equal weight” rating for the company in a research report on Friday, October 16th. Finally, Oppenheimer began coverage on Leonardo DRS in a research report on Thursday, October 22nd. They set an “outperform” rating and a $45.00 price target for the company. Two analysts have rated the stock with a Strong Buy rating, three have issued a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average price target of $51.57.

About Leonardo DRS

Leonardo DRS, Inc is a defense technology company that develops and supplies advanced products and systems for the U.S. military and government customers, as well as allied nations. The company operates as a subsidiary of Leonardo S.p.A. and focuses on technologies used in land, sea, air and space-related defense applications.

Its offerings include sensing and surveillance systems, electro-optical and infrared technologies, radar and electronic warfare products, network computing and communications systems, counter-uncrewed aircraft systems, force protection equipment, and naval power and propulsion systems.