Leidos (NYSE:LDOS) Releases Earnings Results, Beats Expectations By $0.35 EPS

Leidos (NYSE:LDOS) announced its quarterly earnings results on Tuesday. The aerospace company reported $3.26 EPS for the quarter, topping the consensus estimate of $2.91 by $0.35, Zacks reports. Leidos had a return on equity of 31.92% and a net margin of 8.15%.During the same quarter last year, the business posted $3.21 EPS. Leidos’s quarterly revenue was up 7.2% compared to the same quarter last year. Leidos updated its FY 2026 guidance to 12.200-12.500 EPS.

Here are the key takeaways from Leidos’ conference call:

• Leidos raised its 2026 guidance, increasing the revenue midpoint by $100 million, EPS midpoint by $0.05, and operating cash flow outlook by $50 million, supported by stronger year-to-date performance.
• Defense momentum accelerated, with 6% organic revenue growth and a 2.2 book-to-bill ratio in the quarter; management highlighted expanding opportunities in munitions, counter-drone systems, maritime autonomy, and space-based missile-warning payloads.
• The company reported record second-quarter operating cash flow of $793 million and free cash flow of $761 million, while reducing leverage to 2.5x and lowering expected 2026 capital expenditures to about $250 million.
• The VA suspended incentive payments for all medical disability examination vendors through the end of 2026, creating a near-term headwind for Health; the business is expected to run around second-quarter revenue levels for the rest of the year, with longer-term economics dependent on an upcoming recompete.
• Leidos expects a continuing resolution to create potential timing risk for Intel and Digital awards, although management said customer procurement activity is accelerating and cited a $23 billion proposal pipeline awaiting adjudication.

Leidos Trading Up 8.8%

Shares of LDOS traded up $10.40 on Tuesday, hitting $129.12. 790,296 shares of the stock traded hands, compared to its average volume of 1,301,232. Leidos has a 1 year low of $98.86 and a 1 year high of $205.77. The stock’s 50 day moving average is $113.23 and its two-hundred day moving average is $145.90. The firm has a market capitalization of $16.24 billion, a P/E ratio of 11.81, a P/E/G ratio of 1.69 and a beta of 0.54. The company has a quick ratio of 1.29, a current ratio of 1.40 and a debt-to-equity ratio of 1.19.

Leidos Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Stockholders of record on Tuesday, September 15th will be given a $0.43 dividend. This represents a $1.72 dividend on an annualized basis and a dividend yield of 1.3%. The ex-dividend date of this dividend is Tuesday, September 15th. Leidos’s payout ratio is currently 15.75%.

Leidos declared that its board has authorized a share repurchase plan on Friday, July 31st that permits the company to repurchase 20,000,000 shares. This repurchase authorization permits the aerospace company to reacquire shares of its stock through open market purchases. Shares repurchase plans are usually an indication that the company’s board of directors believes its stock is undervalued.

Wall Street Analyst Weigh In

A number of analysts have commented on LDOS shares. Wells Fargo & Company set a $125.00 target price on Leidos in a research report on Wednesday, June 17th. Royal Bank Of Canada cut their price target on Leidos from $215.00 to $180.00 and set an “outperform” rating for the company in a research note on Wednesday, May 6th. BNP Paribas Exane began coverage on shares of Leidos in a research note on Wednesday, May 27th. They issued an “outperform” rating and a $165.00 price objective on the stock. Wall Street Zen upgraded shares of Leidos from a “hold” rating to a “buy” rating in a research report on Thursday, July 16th. Finally, Stifel Nicolaus lowered their price target on shares of Leidos from $205.00 to $193.00 and set a “hold” rating on the stock in a research report on Wednesday, May 6th. One equities research analyst has rated the stock with a Strong Buy rating, six have given a Buy rating and ten have issued a Hold rating to the company. Based on data from MarketBeat.com, Leidos has a consensus rating of “Hold” and an average price target of $163.80.

Leidos News Summary

Here are the key news stories impacting Leidos this week:

• Positive Sentiment: Q2 earnings beat expectations: Non-GAAP EPS was $3.26, above the $2.91 consensus estimate and up from $3.21 a year earlier. Revenue rose 7% year over year to approximately $4.6 billion, also exceeding expectations. Leidos Q2 Earnings and Revenues Top Estimates
• Positive Sentiment: Full-year revenue guidance improved: Leidos raised its fiscal 2026 revenue outlook to $18.2 billion-$18.4 billion from $18.0 billion-$18.4 billion. The EPS outlook remains $12.20-$12.50, with the midpoint slightly above the approximately $12.31 analyst consensus. Leidos Delivers Strong Second Quarter and Enhances Full-Year Guidance
• Positive Sentiment: Strong cash generation and backlog support visibility: Operating cash flow was $793 million, free cash flow was $761 million, and quarterly net bookings totaled $4.9 billion. Backlog reached $48.7 billion, including $10.2 billion funded, while the 1.1 book-to-bill ratio indicates bookings exceeded revenue. Leidos Q2 Revenue Rises 7 Percent
• Positive Sentiment: Additional defense-related contract momentum: Leidos was selected to supply infrared sensors and mission support for Sierra Space’s missile-defense satellites and received a U.S. Navy intelligence modernization contract worth up to $64.8 million. Leidos Selected for Missile Defense Satellites
• Neutral Sentiment: Dividend maintained: Leidos declared a quarterly dividend of $0.43 per share, payable September 30 to shareholders of record September 15.
• Negative Sentiment: GAAP profitability declined: Reported net income fell to $356 million from $393 million a year earlier, while net margin decreased to 7.8% from 9.2%. This contrasts with the adjusted EPS growth and may keep investors focused on cost pressures and earnings quality.

Insiders Place Their Bets

In other Leidos news, Director Gary Stephen May sold 1,484 shares of the stock in a transaction on Thursday, May 7th. The stock was sold at an average price of $132.75, for a total transaction of $197,001.00. Following the transaction, the director owned 10,137 shares of the company’s stock, valued at $1,345,686.75. This represents a 12.77% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this link. Company insiders own 0.77% of the company’s stock.

Hedge Funds Weigh In On Leidos

Several institutional investors have recently added to or reduced their stakes in the business. Pin Oak Investment Advisors Inc. grew its stake in Leidos by 125.0% during the fourth quarter. Pin Oak Investment Advisors Inc. now owns 720 shares of the aerospace company’s stock worth $139,000 after buying an additional 400 shares during the period. Colonial Trust Advisors boosted its position in Leidos by 41.5% during the 4th quarter. Colonial Trust Advisors now owns 716 shares of the aerospace company’s stock worth $129,000 after purchasing an additional 210 shares during the period. Zions Bancorporation National Association UT increased its holdings in Leidos by 34.9% in the 4th quarter. Zions Bancorporation National Association UT now owns 348 shares of the aerospace company’s stock valued at $63,000 after purchasing an additional 90 shares in the last quarter. WealthCollab LLC acquired a new position in shares of Leidos during the third quarter worth about $67,000. Finally, MUFG Securities EMEA plc purchased a new stake in shares of Leidos in the second quarter worth about $61,000. 76.12% of the stock is currently owned by institutional investors and hedge funds.

Leidos Company Profile

Leidos is an American technology and engineering company that provides services and solutions to government and commercial customers, with a strong focus on national security, defense, intelligence, and civil government markets. The company delivers systems integration, engineering, cybersecurity, software development, data analytics, cloud migration and managed IT services, as well as mission support for complex programs. Leidos’ work spans areas such as C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance), secure communications, sensors and systems engineering, and health IT solutions for public-sector healthcare programs.

Leidos traces its corporate roots to Science Applications International Corporation (SAIC) and emerged as an independent, publicly traded company following a corporate separation in 2013.