Government Environment - The current environment for companies selling to the government has been described as interesting and somewhat choppy, with unexpected challenges arising throughout the year [1] - The company has demonstrated its agility and central positioning to customer missions while navigating through significant events such as the longest government shutdown in history [1]

Summary of Leidos Conference Call Company Overview - **Company**: Leidos - **Industry**: Government contracting, defense, and technology services Key Points Government Contracting Environment - The current government contracting environment has been challenging, influenced by the longest government shutdown in history and changes in administration priorities [2][3][4] - Despite these challenges, Leidos has shown resilience and has been able to increase guidance multiple times throughout the year, indicating strong earnings and margins [2][3] Funding Dynamics - There has been a strategic reprioritization in federal civilian agencies, impacting funding dynamics, but Leidos remains well-positioned with critical mission priorities [5][6] - The company expects funding dynamics to stabilize as they align with administration growth factors, particularly in defense and border security [5][6] Revenue Growth and Performance - In Q3, Leidos experienced accelerated organic revenue growth and a strong book-to-bill ratio, indicating new wins and programs that will contribute to future growth [7][8] - The company anticipates continued momentum into 2026 and beyond, despite some delays caused by the government shutdown [8][9] Key Growth Areas - **Defense Systems**: A multi-billion dollar segment that is expected to grow significantly due to strong demand signals across various product portfolios [12] - **Cybersecurity**: The cyber growth pillar is anticipated to grow rapidly, driven by evolving threats and advancements in AI [13] - **Energy Infrastructure**: This segment has been growing at a double-digit rate and is expected to become a more significant part of the portfolio due to robust demand signals [14] Health Segment - The health business has been a leading performer in terms of growth and margins, with expectations for modest growth in the near term [15][16] - There are opportunities to extend capabilities into rural and behavioral health, supported by recent funding initiatives [15][16] Competition and Recompete Landscape - Leidos is aware of the ongoing recompete landscape, particularly in the health segment, with contracts up for rebid in 2026 [17][19] - The company is focused on maintaining a competitive edge through performance-based contracts and leveraging technology to enhance service delivery [18][20] Golden Dome Initiative - Leidos is actively participating in the Golden Dome initiative, which is expected to move forward with significant resources allocated by the administration [22][24] - The company is bidding on major contracts related to this initiative and believes it has a critical role to play in various aspects of the program [24][27] FAA Modernization - Leidos has opted not to bid for the prime contractor role in the FAA modernization process but remains a key partner and expects to participate in the Common Automation Platform development [31][34] Margin Expansion - Leidos has achieved industry-leading margins, currently in the high 13% range, with a focus on sustaining these margins while exploring further improvements in specific segments [38][39] - The company is implementing internal efficiencies and leveraging AI to drive margin improvements across its portfolio [42][43] AI Integration - Leidos is committed to integrating AI into its operations to enhance efficiency and service delivery, while also partnering with customers to apply AI to mission outcomes [43][44] Additional Insights - The company is optimistic about its long-term trajectory, particularly in defense and cybersecurity, and is focused on maintaining a competitive edge through innovation and strategic positioning [12][13][14][15][16]

Core Viewpoint - Investors are evaluating Leidos (LDOS) and ExlService Holdings (EXLS) to determine which stock offers better value opportunities in the Computers - IT Services sector [1] Group 1: Zacks Rank and Earnings Outlook - Leidos has a Zacks Rank of 2 (Buy), while ExlService Holdings has a Zacks Rank of 3 (Hold) [3] - LDOS has likely experienced a stronger improvement in its earnings outlook compared to EXLS [3] Group 2: Value Metrics - LDOS has a forward P/E ratio of 16.08, whereas EXLS has a forward P/E of 20.90 [5] - LDOS has a PEG ratio of 1.38, while EXLS has a PEG ratio of 1.50, indicating LDOS's earnings growth is more favorably priced [5] - LDOS's P/B ratio is 4.86 compared to EXLS's P/B of 6.67, suggesting LDOS is more undervalued relative to its book value [6] Group 3: Overall Value Grade - LDOS has a Value grade of B, while EXLS has a Value grade of C, indicating LDOS is viewed as the superior value option based on earnings outlook and valuation metrics [6]

The Computer and Technology group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has Leidos (LDOS) been one of those stocks this year? By taking a look at the stock's year-to-date performance in comparison to its Computer and Technology peers, we might be able to answer that question.Leidos is one of 603 individual stocks in the Computer and Technology sector. Collectively, these companies sit at #2 in the Zacks Sector Rank. The Zacks Sec ...

Core Insights - Leidos' B220-HT explosive trace detection (ETD) system has achieved G1 Standard certification, ahead of the European Civil Aviation Conference's regulatory mandate for ETD systems in the EU [1][2] - The certification ensures compliance with stricter detection requirements that will be enforced starting late 2026, positioning Leidos to support existing customers without disruption [1][2] Company Overview - Leidos is a leader in the industry, providing advanced security screening and aviation solutions, with a reported annual revenue of approximately $16.7 billion for the fiscal year ending January 3, 2025 [4] - The company employs around 47,000 people globally and is headquartered in Reston, Virginia [4] Product Details - The B220-HT system utilizes advanced analysis technology for rapid detection of a wide range of explosives and narcotics, making it suitable for high-throughput airport environments [2] - Over 750 B220-HT units are currently in use at European airports, indicating a significant market presence [1]

Core Viewpoint - Leidos (LDOS) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for predicting near-term stock price movements [2][3]. - A strong correlation exists between earnings estimate revisions and stock price movements, with institutional investors using these estimates to determine fair value [3]. Leidos' Earnings Outlook - The recent upgrade for Leidos indicates an improvement in the company's underlying business, which is expected to positively influence its stock price [4]. - For the fiscal year ending December 2025, Leidos is projected to earn $11.72 per share, with a 2.9% increase in the Zacks Consensus Estimate over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [6]. - The upgrade of Leidos to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

Core Insights - Artificial intelligence is significantly transforming the defense sector, with both emerging companies like BigBear.ai and established firms like Leidos competing for federal contracts [1][2] - BigBear.ai is transitioning to a scalable AI platform model, while Leidos integrates AI into its existing services [2][9] BigBear.ai Overview - BigBear.ai is acquiring Ask Sage, a secure generative AI platform, which has over 100,000 users across 16,000 government teams, expected to drive $25 million in annual recurring revenue (ARR) by 2025 [4][8] - The company reported a record $456.6 million in cash and investments, enhancing its liquidity for strategic initiatives [5][8] - Despite a 20% year-over-year revenue decline due to lower Army program volumes and government shutdown impacts, BigBear.ai's backlog reached $376 million, indicating potential for future growth [6][7] Leidos Overview - Leidos reported $4.47 billion in Q3 revenue, a 7% increase year-over-year, with a total backlog of $47.7 billion [9][10] - The company secured several significant contracts, including a $2.2 billion classified intelligence award and a $540 million AI-enabled counterterrorism software contract [10] - Leidos is focusing on AI-driven mission software and digital modernization, embedding AI across various solutions [11][13] Stock Performance Comparison - BigBear.ai shares surged 180% over the past year, outperforming the broader technology sector and S&P 500 [14] - Leidos shares increased by 16.1%, slightly exceeding the S&P 500 but lagging behind the technology sector [15] Valuation Insights - BigBear.ai trades at a forward price-to-sales multiple of 15.53, significantly higher than Leidos' multiple of 1.37, reflecting market expectations for high growth [18] - Analyst estimates for BigBear.ai show a narrowing loss per share outlook, while Leidos' EPS estimates indicate stable growth [19][21] Investment Considerations - Leidos offers stability and consistent profitability, supported by a large backlog and expanding AI capabilities [25] - BigBear.ai presents greater near-term upside potential due to its transformation and strengthened liquidity position [25][26]

Core Viewpoint - Leidos Holdings (LDOS) was previously considered undervalued at a stock price of approximately $143 following their Q4 earnings release earlier this year, leading to a buy rating for the stock [1]. Company Analysis - The stock of Leidos Holdings was trading at about $143, indicating a minimal undervaluation at that time [1]. - The analysis is based on the company's Q4 earnings release, which provided insights into its financial performance [1]. Analyst Background - The analyst has a master's degree in Analytics from Northwestern University and a bachelor's degree in Accounting, with over 10 years of experience in the investment arena, starting as an analyst and progressing to a management role [1]. - Dividend investing is highlighted as a personal interest of the analyst, indicating a focus on income-generating investments [1].

Core Viewpoint - Leidos Holdings (LDOS) was previously considered undervalued at a stock price of approximately $143 following their Q4 earnings release earlier this year, leading to a buy rating for the stock [1]. Company Analysis - The stock of Leidos Holdings was trading at about $143, indicating a minimal undervaluation [1]. - The analysis is based on the company's Q4 earnings release, which provided insights into its financial performance [1]. Analyst Background - The analyst has a master's degree in Analytics from Northwestern University and a bachelor's degree in Accounting, with over 10 years of experience in the investment arena [1]. - The analyst has progressed from an analyst role to a management position, indicating a strong background in investment analysis [1]. - Dividend investing is highlighted as a personal interest of the analyst, suggesting a focus on income-generating investments [1].

Group 1: Walmart Inc. (NYSE: WMT) - Walmart reported better-than-expected third-quarter financial results on November 20, raising its fiscal year 2026 revenue and adjusted EPS outlook [1] - The company is experiencing growth in e-commerce and its membership model, with management providing strong forward guidance [1] - Walmart is set to transfer its listing from NYSE to Nasdaq, effective December 9 [1] Group 2: Vistra Corp. (NYSE: VST) - Vistra has seen a 25% pullback over the past few months, but analysts maintain an Outperform rating [2] - BMO Capital raised the price target for Vistra from $236 to $245, while Evercore ISI Group increased the price target from $237 to $243 [2] Group 3: Leidos Holdings, Inc. (NYSE: LDOS) - Leidos reported better-than-expected third-quarter results on November 4, with quarterly revenue growth of 7% year over year to $4.47 billion, surpassing the analyst consensus estimate of $4.28 billion [3] - The company also raised its full-year EPS guidance [3] Group 4: Zoom Communications Inc. (NASDAQ: ZM) - Zoom is scheduled to report quarterly earnings on Monday, with analysts expecting earnings of $1.44 per share, up from $1.38 per share in the previous year [4] - The consensus estimate for Zoom's quarterly revenue is $1.21 billion, compared to $1.18 billion a year earlier [4] Group 5: Price Action - Vistra shares fell 3% to close at $168.59 [6] - Leidos shares rose 0.5% to close at $186.49 [6] - Walmart shares fell 1.7% to settle at $105.32 [6] - Zoom shares gained 0.3% to close at $78.63 [6]