Leonardo DRS (NASDAQ:DRS) Posts Quarterly Earnings Results, Beats Expectations By $0.05 EPS

Leonardo DRS (NASDAQ:DRS) issued its earnings results on Tuesday. The company reported $0.26 earnings per share for the quarter, beating the consensus estimate of $0.21 by $0.05, Briefing.com reports. Leonardo DRS had a net margin of 7.62% and a return on equity of 11.68%. During the same quarter last year, the company posted $0.20 EPS. The business’s revenue for the quarter was up 5.9% compared to the same quarter last year. Leonardo DRS updated its FY 2026 guidance to 1.260-1.300 EPS.

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

• Company reported strong Q1 results with revenue of $846M (+6% YoY), adjusted EBITDA of $105M (+28% YoY), and adjusted EPS of $0.26, with margin expansion of ~210 bps.
• Management raised full-year 2026 guidance to $3.90B–$3.975B revenue, $515M–$530M adjusted EBITDA, and $1.26–$1.30 adjusted EPS
• Demand momentum and funded backlog reached company records (17th consecutive quarter with book-to-bill ?1), driven by tactical radars, infrared sensing and a notable $533M DAIRCM production IDIQ, prompting capacity increases.
• Company is increasing organic investment in R&D and CapEx and launching products like THOR and Sage Core while pursuing targeted tuck-in M&A to fill technology gaps across counter?UAS, space sensing, and naval power systems.
• Q1 had a modest free cash flow outflow due to seasonality and higher working capital to fund growth, though management expects Q2 to be modestly FCF positive and improved conversion over the year.

Leonardo DRS Price Performance

DRS stock traded down $0.30 during trading on Tuesday, hitting $39.70. 263,376 shares of the stock traded hands, compared to its average volume of 1,186,536. Leonardo DRS has a one year low of $32.43 and a one year high of $49.31. The stock has a market cap of $10.56 billion, a price-to-earnings ratio of 38.82, a P/E/G ratio of 2.97 and a beta of 0.29. The company has a 50 day simple moving average of $44.57 and a 200 day simple moving average of $39.76. The company has a current ratio of 1.89, a quick ratio of 1.60 and a debt-to-equity ratio of 0.12.

Leonardo DRS Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Tuesday, March 24th. Investors of record on Tuesday, March 10th were issued a dividend of $0.09 per share. This represents a $0.36 annualized dividend and a yield of 0.9%. The ex-dividend date of this dividend was Tuesday, March 10th. Leonardo DRS’s dividend payout ratio (DPR) is currently 34.95%.

Analysts Set New Price Targets

Several brokerages have recently weighed in on DRS. Weiss Ratings upgraded shares of Leonardo DRS from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Friday, March 20th. Bank of America lifted their target price on shares of Leonardo DRS from $50.00 to $55.00 and gave the company a “buy” rating in a research report on Wednesday, March 25th. Wall Street Zen lowered shares of Leonardo DRS from a “buy” rating to a “hold” rating in a research report on Saturday. Morgan Stanley set a $47.00 target price on shares of Leonardo DRS in a research report on Wednesday, February 25th. Finally, Truist Financial upgraded shares of Leonardo DRS to a “strong-buy” rating in a research report on Friday. One equities research analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating and three have assigned a Hold rating to the company’s stock. According to MarketBeat, the company presently has an average rating of “Moderate Buy” and an average target price of $51.33.

Insiders Place Their Bets

In other Leonardo DRS news, CFO Michael Dippold sold 16,330 shares of the business’s stock in a transaction dated Monday, March 16th. The shares were sold at an average price of $45.27, for a total value of $739,259.10. Following the completion of the transaction, the chief financial officer directly owned 26,622 shares of the company’s stock, valued at approximately $1,205,177.94. The trade was a 38.02% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, EVP Sally Wallace sold 28,960 shares of the business’s stock in a transaction dated Thursday, April 2nd. The stock was sold at an average price of $46.35, for a total transaction of $1,342,296.00. Following the completion of the transaction, the executive vice president directly owned 58,353 shares of the company’s stock, valued at approximately $2,704,661.55. This represents a 33.17% decrease in their ownership of the stock. 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. Over the last three months, insiders sold 64,361 shares of company stock valued at $2,944,837. Insiders own 0.25% of the company’s stock.

Hedge Funds Weigh In On Leonardo DRS

A number of institutional investors have recently modified their holdings of the stock. State Street Corp raised its stake in shares of Leonardo DRS by 4.0% in the fourth quarter. State Street Corp now owns 3,988,403 shares of the company’s stock worth $135,965,000 after acquiring an additional 153,697 shares during the last quarter. AQR Capital Management LLC raised its stake in shares of Leonardo DRS by 77.1% in the fourth quarter. AQR Capital Management LLC now owns 2,255,400 shares of the company’s stock worth $76,887,000 after acquiring an additional 981,956 shares during the last quarter. Dimensional Fund Advisors LP raised its stake in shares of Leonardo DRS by 15.5% in the fourth quarter. Dimensional Fund Advisors LP now owns 1,995,989 shares of the company’s stock worth $68,043,000 after acquiring an additional 267,817 shares during the last quarter. Millennium Management LLC raised its stake in shares of Leonardo DRS by 6.3% in the fourth quarter. Millennium Management LLC now owns 1,887,797 shares of the company’s stock worth $64,355,000 after acquiring an additional 111,612 shares during the last quarter. Finally, Geode Capital Management LLC raised its stake in shares of Leonardo DRS by 1.1% in the fourth quarter. Geode Capital Management LLC now owns 1,610,691 shares of the company’s stock worth $54,923,000 after acquiring an additional 17,812 shares during the last quarter. 18.76% of the stock is owned by institutional investors.

Leonardo DRS Company Profile

Leonardo DRS is a U.S.-based defense technology company and wholly owned subsidiary of Italy’s Leonardo S.p.A. The firm specializes in developing and integrating mission-critical systems for military and government customers, with a primary focus on command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR). Its core offerings encompass advanced sensors, targeting systems, radars and electronic warfare solutions designed to enhance situational awareness and operational effectiveness across land, sea and air domains.

The company’s portfolio includes naval combat management systems, unmanned vehicle sensors, power generation and distribution equipment, and training and simulation solutions.

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