Company Overview - Leidos Holdings, Inc. operates as an IT services company, focusing on defense, intelligence, civil, and health markets with a market cap of $23.4 billion [1][2] Stock Performance - Leidos touched its all-time high of $202.90 on Nov. 22, 2024, and is currently trading 9.4% below that peak, with a 23% increase over the past three months, outperforming the Technology Select Sector SPDR Fund's (XLK) 12.5% surge during the same period [3] - Year-to-date, Leidos' stock has gained 27.6% and 19.1% over the past 52 weeks, surpassing XLK's 16.7% gains in 2025 but lagging behind XLK's 23.8% surge over the past year [4] Financial Performance - Following the release of robust Q2 results on Aug. 5, Leidos' stock prices rose 7.5% in the trading session and maintained positive momentum for six subsequent sessions [5] - Q2 revenues increased 2.9% year-over-year to $4.3 billion, exceeding expectations, while non-GAAP EPS soared by 22.1% year-over-year to $3.21, significantly surpassing consensus estimates [5] - Free cash flows increased by 27.7% year-over-year to $457 million, boosting investor confidence [5] Competitive Position - Leidos has significantly outperformed Booz Allen Hamilton Holding Corporation, which experienced a 21.1% decline year-to-date and a 34.7% plunge over the past 52 weeks [6]

Core Thesis - Leidos Holdings, Inc. is viewed positively due to its stable cash flows, significant backlog, and potential for re-rating in stock value, contrasting with the higher-risk profile of competitors like Palantir [1][4]. Company Overview - Leidos operates as a mission services and systems integrator, primarily serving the Pentagon and U.S. government, with 44% of its revenue derived from National Security & Digital programs and 30% from Health & Civil contracts [2]. - The company offers comprehensive solutions including secure networks, sensors, cloud migrations, cyber defense, health IT systems, and long-term mission operations, leveraging applied AI for enhanced decision-making [2]. Financial Performance - Leidos generates approximately $17 billion in annual revenue and has an earnings per share (EPS) of $10.7, characterized by thin but stable profit margins [3]. - The company trades at a forward P/E ratio of 15 and an EV/EBITDA of 11, indicating a modest valuation compared to competitors [4]. Market Positioning - Leidos is positioned as a service-heavy provider, focusing on integration and operations, while competitors like Palantir are product-heavy, monetizing software platforms [3]. - The company has a substantial backlog of $46 billion, suggesting strong future revenue potential [4]. Investment Outlook - Analysts suggest that Leidos could see a re-rating towards a fair value of $250–300 per share, representing a potential upside of 25–30% [4]. - In terms of risk/reward, Leidos is considered a more stable and underappreciated investment opportunity compared to Palantir, which is priced for high growth and carries more risk [4].

Group 1 - Leidos closed at $185.26, with a +2.71% change from the previous day, outperforming the S&P 500's gain of 0.85% [1] - Over the last month, Leidos shares decreased by 0.87%, while the Computer and Technology sector gained 4.39% and the S&P 500 gained 2.38% [1] Group 2 - Leidos is forecasted to report an EPS of $2.62, reflecting a 10.58% decrease from the same quarter last year, with expected revenue of $4.28 billion, up 2.06% year-over-year [2] - For the full year, earnings are projected at $11.22 per share and revenue at $17.15 billion, indicating increases of +9.89% and +2.95% respectively from the prior year [3] Group 3 - Recent changes in analyst estimates for Leidos can indicate shifts in near-term business trends, with positive revisions seen as favorable for the business outlook [3] - The Zacks Rank system, which incorporates estimate changes, has shown a track record of outperformance, with 1 stocks returning an average of +25% annually since 1988 [4][5] Group 4 - Leidos has a Forward P/E ratio of 16.07, which is below the industry average of 17.33, indicating it is trading at a discount [6] - The current PEG ratio for Leidos is 1.72, compared to the industry average of 2.09, suggesting a more favorable valuation relative to expected earnings growth [7] Group 5 - The Computers - IT Services industry, which includes Leidos, has a Zacks Industry Rank of 95, placing it in the top 39% of over 250 industries [7][8]

Core Insights - Leidos Holdings Inc. is recognized as a top IT stock by hedge funds, with a focus on its new-generation autonomous maritime technology [1] - The company has commenced local production of the Sea Archer, an uncrewed surface vessel, in Australia, aligning with the AUKUS security partnership [1][3] Group 1: Sea Archer USV Details - The Sea Archer is designed for high-speed missions, achieving speeds of up to 40 knots and a range of 1,500 nautical miles [2] - It features a payload capacity exceeding 900 kg, enabling various mission types including strike, logistics, ISR, and electromagnetic deception [2] - The vessel is powered by Leidos' LAVA advanced autonomy platform, enhancing its operational capabilities [2] Group 2: Local Production and Supply Chain - Local production in Australia aims to utilize domestic supply chains for construction, payload integration, and maintenance, fostering a sovereign ecosystem [3] - The first aluminum vessel is being constructed by Oceans Rivers Lakes, based on the NSW Central Coast, with production already in progress [3] - The Sea Archer is currently undergoing sea trials in the U.S. and is projected to be mission-ready by 2026 [3]

Core Insights - Leidos Holdings, Inc. has been recognized as one of the 10 Best Space Exploration Stocks to Buy Now, highlighting its strong position in the industry [1] - The company has achieved Amazon Web Services' Trusted Secure Enclave Vetted Partner certification, underscoring its commitment to secure cloud architecture [1][2] - Leidos supports AUKUS Pillar 2, emphasizing the importance of secure cooperation among allies in defense and research [3] Company Performance - Leidos Holdings, Inc. reported $16.7 billion in revenue for FY2024, indicating robust financial performance [3] - The company employs approximately 47,000 individuals globally, reflecting its significant operational scale [3] Industry Position - Leidos is ranked fifth among the Best Space Stocks, showcasing its competitive standing in the space exploration sector [3]

Core Insights - Leidos Holdings (NYSE: LDOS) has experienced a nearly 20% increase in share price since the initial buy recommendation was published, indicating strong market confidence in the company's growth and profitability [1]. Company Performance - The company continues to demonstrate robust growth and high profitability, which is a positive indicator for potential investors [1].

Core Insights - Leidos Holdings (NYSE: LDOS) has seen its shares increase by nearly 20% since the initial buy recommendation was published, indicating strong market confidence in the company's growth and profitability [1]. Company Performance - The company continues to demonstrate robust growth and high profitability, which is a positive indicator for potential investors [1].

Core Insights - Stock markets are reaching new records as investor confidence grows regarding potential Federal Reserve rate cuts due to a softening labor market and rising inflation from tariffs [1] Company Summaries - **Halozyme Therapeutics, Inc. (HALO)**: A biopharmaceutical company focused on oncology treatments and drug delivery technology. Expected earnings growth of 46.1% in 2025, with a 9.1% increase in broker ratings over the past four weeks. Currently holds a Zacks Rank 1 [7][8][10] - **Leidos Holdings, Inc. (LDOS)**: A global leader in science and technology serving defense, intelligence, civil, and health markets. Projected earnings growth of 9.2% in 2025, with a 5.6% increase in broker ratings over the past four weeks. Currently holds a Zacks Rank 2 [9][11][10] - **TransUnion (TRU)**: A leading provider of risk and information solutions. Expected earnings growth of 4.1% in 2025, with a 5% increase in broker ratings over the past four weeks. Currently holds a Zacks Rank 2 [11][12][10]

Core Insights - The article discusses the importance of a hybrid investment strategy, specifically GARP (Growth at a Reasonable Price), which combines elements of both value and growth investing to navigate market uncertainties [1][2][3] GARP Investment Strategy - GARP investing prioritizes the price/earnings growth (PEG) ratio, which relates a stock's P/E ratio to its future earnings growth rate [5][6] - A lower PEG ratio, ideally below 1, indicates both undervaluation and future growth potential [6] - The article highlights that while P/E ratios can indicate discounts, the PEG ratio adds a growth perspective, making it a more comprehensive metric for investors [6][7] Screening Criteria for GARP Investments - Successful GARP investments should meet several criteria, including: - PEG Ratio less than the industry median - P/E Ratio (using F1) less than the industry median - Zacks Rank of 1 (Strong Buy) or 2 (Buy) - Market Capitalization greater than $1 billion - Average 20-Day Volume greater than 50,000 - Percentage Change F1 Earnings Estimate Revisions greater than 5% - Value Score of less than or equal to B [8][9][10] Featured GARP Stocks - **Halozyme Therapeutics (HALO)**: A biopharmaceutical company with a discounted PEG and an expected growth rate of 31% [11][12] - **Phibro Animal Health (PAHC)**: A diversified animal health company with a discounted PEG and P/E, and a long-term growth rate of 15% [13][14] - **Leidos (LDOS)**: A global science and technology leader with a discounted PEG and P/E, and a historical growth rate of 14.6% [15][16] - **PDD Holdings Inc. (PDD)**: A multinational commerce group with a discounted PEG and P/E, and a long-term expected growth rate of 9.7% [17][18]

Core Insights - Leidos has introduced Sea Dagger, a next-generation Commando Insertion Craft designed for the Royal Navy, which combines speed, range, vehicle delivery, and modular mission systems into a single platform, setting a new standard in maritime autonomy and operational agility [1][3] Group 1: Product Development - Sea Dagger is developed under the UK Commando Force programme, aiming to deliver 24 medium surface insertion craft for deploying Commando Strike teams and other tactical platforms from long range [2] - The craft can exceed speeds of 40 knots and is a result of collaboration between Leidos Naval Architects, military experts, and the Royal Navy, leveraging over 30 years of fast-craft expertise [3] Group 2: Technological Features - Sea Dagger incorporates advanced technologies such as Trusted Mission AI, autonomous systems, and integrated weaponry, focusing on operational resilience, readiness, and maintainability [3] - The design addresses challenges faced by specialized units in coastal and shallow-water environments, combining naval architecture with high-tech sensors and command-and-control capabilities [5] Group 3: Strategic Alignment - The development of Sea Dagger aligns with AUKUS Pillar 2 maritime autonomy objectives and the UK Strategic Defence Review, enhancing the UK Commando Force's ability to respond to modern threats [4] - The initiative reflects a commitment to equipping military forces with resilient, future-ready platforms that can adapt to the complexities of modern warfare [6] Group 4: Company Overview - Leidos is a leader in industry and technology, serving government and commercial customers with innovative digital and mission solutions, reporting annual revenues of approximately $16.7 billion for the fiscal year ended January 3, 2025 [8]