/Leidos%20Holdings%20Inc%20logo%20on%20website-by%20monticello%20via%20Shutterstock.jpg)
Valued at a market cap of almost $22 billion, Leidos Holdings, Inc. (LDOS) provides services and solutions in the defense, intelligence, civil, and health markets. The Reston, Virginia-based company’s core capabilities include providing solutions in the fields of cybersecurity, data analytics, enterprise IT modernization, operations and logistics, software development, and systems engineering.
Shares of this national security and health company have significantly outperformed the broader market over the past 52 weeks. LDOS has rallied nearly 55.9% over this time frame, while the broader S&P 500 Index ($SPX) has gained 31.1%. Moreover, the stock is up 52.2% in 2024, compared to SPX’s 24.7% gain on a YTD basis.
Zooming in further, LDOS’ outperformance becomes more evident when compared to the Technology Select Sector SPDR Fund’s (XLK) 26.9% gain over the past 52 weeks and 21.3% return on a YTD basis.
On Oct. 29, shares of LDOS soared 9.5% after its robust Q3 earnings release. The company’s revenue increased 6.9% year-over-year to $4.19 billion and surpassed the Wall Street estimates of $4.04 billion. Its adjusted EPS of $2.93 also outpaced the consensus estimates of $1.96 per share and improved 44.3% on a yearly basis. The better-than-expected performance can be primarily attributed to Leidos’ efficient cost management coupled with growth in demand across all of its customer segments, especially managed health services. The company also raised its full-year 2024 earnings and revenue guidance, which might have further bolstered investor sentiment toward the stock.
For the current fiscal year, ending in December, analysts expect LDOS’ EPS to grow 37.5% year over year to $10.04. The company’s earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 13 analysts covering the stock, the consensus rating is a “Strong Buy,” which is based on 11 “Strong Buy” and two “Hold” ratings.
The configuration is slightly less bullish than three months ago, with 12 analysts suggesting a “Strong Buy.”
On Nov. 4, Barclays maintained an “Overweight” rating on LDOS and raised its price target to $210, which indicates a 27.5% potential upside from the current levels.
The mean price target of $207.42 represents a 25.9% upside from LDOS’ current price levels. The Street-high price target of $230 suggests an upside potential of 39.6%.
