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$127.44 -$0.42 (-0.3%)

04:00 PM EST on 03/01/24

Leidos Holdings, Inc. (NYSE:LDOS)

CAPS Rating: 5 out of 5

The Company provides scientific, engineering, systems integration & technical services & solutions to all branches of the U.S. military, agencies of the U.S. Department of Defense, the intelligence community & the U.S. Department of Homeland Security etc.

Current Price $127.44 Mkt Cap $17.3B
Open $129.00 P/E Ratio 89.69
Prev. Close $127.44 Div. (Yield) $1.46 (1.2%)
Daily Range $126.79 - $129.06 Volume 834,783
52-Wk Range $76.58 - $129.06 Avg. Daily Vol. 812,181


How do you think NYSE:LDOS will perform against the market?

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720 Outperform
48 Underperform

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128 Outperform
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Top NYSE:LDOS Bull/Bear Pitches

The best Bull and Bear pitches based on recency and number of recommendations.

EnigmaDude (83.16)
Submitted March 10, 2022

Landing big contracts and will benefit from increased Defense spending due to Russia.

LucklessWonder (55.91)
Submitted March 28, 2008

Short-term, it's overpriced with regard to PEG and Price per Free Cash Flow. Downstream, if Obama wins the presidency, I have to think that defense contractors might see a reduction in revenue.

Recent Community Commentary

Read the most recent pitches from players about LDOS.


Member Avatar EnigmaDude (83.16) Submitted: 3/10/2022 12:15:55 PM : Outperform Start Price: $100.26 NYSE:LDOS Score: +5.28

Landing big contracts and will benefit from increased Defense spending due to Russia.


Member Avatar Dividends500 (85.32) Submitted: 12/31/2020 12:30:47 AM : Outperform Start Price: $92.55 NYSE:LDOS Score: -22.66

Dividends500 tracks the healthiest dividends in the S&P 500.

To qualify for the portfolio, the company must meet three simple requirements:

- Member of the S&P 500
- Payout ratio below 50%
- Dividend growth year over year


Member Avatar TMFDeej (83.65) Submitted: 11/1/2016 9:37:53 AM : Outperform Start Price: $36.99 NYSE:LDOS Score: +102.32

I was catching up on last month's Value Investor Insight this morning and I came across an interesting value investing idea in an interview with Sunjay Mishra of Tourbillon Capital Partners.

The firm likes the stock of Leidos (LDOS). There's a number of special situation aspects that attract me to this value story. The current iteration of Leidos was formed through a series of spinoffs. First back in 2013 Science Applications International Corporation or "SAIC" spun off its slower growing operations and changed the name of its remaining "good" assets to Leidos.

Flash forward to 2016 and Leidos agreed to merge through a Reverse Morris Trust with a spinoff of the Information Systems & Global Solutions division of Lockheed Martin (LMT).

There's lots of fancy investing tricks and trinkets going on here. That's the sort of thing that often leads to mispricing.

For more information on the recent merger, check out this short piece on it by the always excellent Clark Street Value:

Leidos Holdings: Reverse Morris Trust with Lockheed Martin

LDOS' stock has sold off significantly over the past year, going from $59/share last November to its current $41 and change. Mishra believes that the recent selloff was a result of a number of reasons:

The deal spooked the market, which on the surface was understandable. It appeared Leidos paid a full multiple in an immediately dilutive transaction for a business declining at a mid-teens rate, and they went from net cash to 3.5x leverage to do so. On top of that, there was technical selling pressure from the upcoming special dividend and arb-related shorting of Leidos shares from Lockheed Martin shareholders looking to tender their stock for LDOS at a discount.

According to Clark Street, Leidos is trading at approximately 8.2x EBITDA, significantly lower than its peers despite the fact that the new merger should yield significant synergies that should help to improve Leidos' performance.

In fact, Tourbillon Capital believes that Mr. Market may be underestimating the obvious synergies associated with the recent LMT - LDOS transaction:

Through our diligence we gained comfort that the guided synergies were likely substantially understated, based on precedent transactions and our benchmarking and bottoms-up analysis of what the cost structure could be. We did a lot of background work on the CEO, who had a history of success at Boeing, and on the management team overall, which had incentives in place to underpromise and overdeliver.

Add to this the fact that almost every single analyst that I've seen talk about the defense sector expects government spending on it to increase during the next President's term in office, regardless of who wins.

Now that the theory that LDOS is current undervalued has been established, the question much is the stock worth. Here's Tourbillon Capital's view on the subject:

With the stock trading at $43.90, how are you looking at valuation?

SM: We think the downside is mitigated by the fact that the shares are statistically cheap, trading at 13x consensus forward free cash flow. We consider the debt burden manageable, and the company pays the highest dividend in the peer group, approaching 3%.

Post synergies and with some growth from a cyclical uplift in defense spending, we believe Leidos can earn up to $5 per share in free cash flow in the not-distant future. At a peer multiple in the mid to high teens, that would make today’s share price an attractive entry point.

This is an interesting situation to follow. I am adding shares of LDOS in CAPS today, but do not yet own a real money position.

No position in LDOS


Find the members with the highest scoring picks in LDOS.

Score Leader


JM80 (< 20) Score: +342.19

The Score Leader is the player with the highest score across all their picks in LDOS.

Member Name Member
Call Time
Score Commentary
JM80 < 20 5/29/2012 Outperform 5Y $17.48 +627.33% +285.14% +342.19 0 Comment
DCD1253 39.87 3/31/2014 Outperform 5Y $20.68 +514.69% +174.77% +339.93 0 Comment
mkirkp49 49.39 7/27/2012 Outperform 3Y $17.79 +614.57% +274.64% +339.92 0 Comment
princeofprice 68.82 3/28/2014 Outperform 1Y $20.76 +512.22% +177.06% +335.16 0 Comment
s1f2c3 < 20 12/31/2012 Outperform 3Y $18.15 +600.49% +267.21% +333.28 0 Comment
DanPicks 53.99 5/14/2012 Outperform 3M $17.81 +613.54% +281.84% +331.70 0 Comment
EKnows3 22.22 12/7/2012 Outperform 5Y $18.47 +588.02% +259.82% +328.20 0 Comment
earningsyield < 20 6/1/2012 Outperform 5Y $17.64 +620.71% +297.16% +323.55 0 Comment
TMFAleph1 95.59 1/2/2013 Outperform 1Y $18.92 +571.90% +253.42% +318.47 0 Comment
kulls81 77.78 11/29/2012 Outperform 5Y $19.13 +564.52% +261.37% +303.15 1 Comment

Wall Street

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