Core Insights - Leidos (LDOS) is currently viewed as a more attractive investment compared to ServiceNow (NOW) for value investors due to its stronger earnings outlook and better valuation metrics [3][6]. Valuation Metrics - Leidos has a forward P/E ratio of 16.22, significantly lower than ServiceNow's forward P/E of 54.27, indicating that LDOS may be undervalued [5]. - The PEG ratio for Leidos is 2.11, while ServiceNow's PEG ratio is 2.28, suggesting that LDOS offers a better balance between price and expected earnings growth [5]. - Leidos has a P/B ratio of 4.93 compared to ServiceNow's P/B of 17.34, further highlighting the relative undervaluation of LDOS [6]. Investment Ratings - Leidos holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while ServiceNow has a Zacks Rank of 3 (Hold), suggesting a less favorable outlook [3][6]. - The Value grade for Leidos is B, whereas ServiceNow has received an F, reinforcing the notion that LDOS is the superior value option at this time [6].

Key Takeaways Leidos Holdings, Inc. (LDOS) , with rising earnings estimates, robust ROE, a solid backlog and valuable return to its shareholders, offers a great investment opportunity in the Zacks Computers IT Services industry. Let's focus on the reasons that make this Zacks Rank #2 (Buy) stock an attractive investment pick at the moment. Growth Outlook & Surprise History of LDOS The Zacks Consensus Estimate for LDOS' 2025 earnings per share (EPS) has increased 2.8% to $11.07 in the past 30 days. The Zacks ...

Company Overview - Leidos Holdings, Inc. is a global science and technology leader founded in 1969, serving defense, intelligence, civil, and health markets [11] - The company specializes in cybersecurity, data analytics, enterprise IT modernization, operations and logistics, sensors, software development, and systems engineering [11] Investment Ratings - Leidos is currently rated 2 (Buy) on the Zacks Rank, indicating a favorable investment outlook [12] - The company has a VGM Score of A, suggesting strong overall performance across value, growth, and momentum metrics [12] Performance Metrics - Leidos has a Momentum Style Score of B, with shares increasing by 9.3% over the past four weeks [12] - Five analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate rising by $0.37 to $11.07 per share [12] - The company boasts an average earnings surprise of +25.1%, indicating strong performance relative to expectations [12] Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Leidos is recommended for investors' consideration [13]

Core Viewpoint - Investors are evaluating Leidos (LDOS) and ServiceNow (NOW) for potential undervalued stock opportunities, with LDOS currently appearing as the more favorable option based on various valuation metrics [1][7]. Valuation Metrics - LDOS has a forward P/E ratio of 16.12, significantly lower than NOW's forward P/E of 50.67, indicating that LDOS may be undervalued relative to its earnings potential [5]. - The PEG ratio for LDOS is 2.10, while NOW's PEG ratio is slightly higher at 2.13, suggesting that LDOS offers a better balance between price and expected earnings growth [5]. - LDOS has a P/B ratio of 4.86 compared to NOW's P/B of 16.19, further supporting the argument that LDOS is more attractively valued [6]. Zacks Rank and Value Grades - LDOS holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to recent estimate revisions, while NOW has a Zacks Rank of 3 (Hold) [3]. - In terms of value grades, LDOS has a Value grade of B, whereas NOW has a Value grade of F, highlighting LDOS's stronger position in terms of value investing metrics [6]. Conclusion - Based on stronger estimate revision activity and more attractive valuation metrics, LDOS is positioned as the superior choice for value investors compared to NOW [7].

Group 1 - Leidos (LDOS) is currently outperforming its peers in the Computer and Technology sector, with a year-to-date return of 26.3% compared to the sector average of 14.3% [4] - The Zacks Rank for Leidos is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions, with a 7% increase in the consensus estimate for full-year earnings over the past 90 days [3] - Leidos belongs to the Computers - IT Services industry, which has seen an average loss of 16.8% this year, further highlighting its strong performance relative to its industry [5] Group 2 - The Computer and Technology sector includes 605 individual stocks and is currently ranked 5 in the Zacks Sector Rank [2] - Another stock in the sector, Crexendo (CXDO), has also shown strong performance with a year-to-date return of 15.7% and a Zacks Rank of 2 (Buy) [4][5] - The Internet - Services industry, to which Crexendo belongs, has a year-to-date increase of 8.3% and is ranked 97 among 34 stocks [6]

Group 1 - Leidos has achieved Trusted Secure Enclave (TSE) Vetted Partner status from Amazon Web Services (AWS), enhancing its capabilities in secure information sharing across agencies and allied nations, particularly in relation to AUKUS Pillar 2 [1][3] - The Leidos Secure Environment (LSE) is a cloud-based platform that facilitates secure collaboration for sensitive workloads and data across multiple organizations and international teams [2][3] - This designation validates Leidos' leadership in developing secure cloud architectures for complex missions, supporting rapid and secure infrastructure deployment while maintaining high standards of verification and compliance [3][5] Group 2 - AUKUS is a trilateral security partnership involving Australia, the United Kingdom, and the United States, focusing on defense cooperation and advanced military technology sharing [4] - The partnership has two main pillars: Pillar 1 involves Australia acquiring nuclear-powered submarines, while Pillar 2 emphasizes collaboration on advanced technologies such as artificial intelligence and cyber capabilities [4] - Leidos, headquartered in Reston, Virginia, reported annual revenues of approximately $16.7 billion for the fiscal year ended January 3, 2025, and employs around 47,000 people globally [5]

Core Insights - Leidos recognized several companies for their excellence in technology, collaboration, partnership, and innovation at the 8th Leidos Supplier Innovation & Technology Symposium [1][2] Group 1: Award Winners - Amazon Web Services was named Innovation Partner of the Year for consistently providing new ideas and solutions that enhance customer efficiency [2] - Ask Sage received the Emerging Technology Partner of the Year award for outstanding product design and engineering in cutting-edge technology [3] - Carahsoft was awarded Channel Partner of the Year for facilitating efficient market entry and demonstrating a collaborative relationship with Leidos [3] - Moveworks was recognized as Alliance Partner of the Year for supporting customer success through long-term relationships [4] - Sterling was named Small Business Channel Partner of the Year for helping Leidos with innovative solutions that resulted in savings and increased performance [4] Group 2: Individual Recognitions - Doug Huber from Hewlett Packard Enterprise was awarded OEM Account Manager of the Year for excellent service and fostering partnerships [5] - John Peters from CDW-G received the Channel Partner Account Manager of the Year award for his contributions to collaborative partnerships [5] Group 3: Company Overview - Leidos is headquartered in Reston, Virginia, and serves government and commercial customers with digital and mission innovations [6] - The company reported annual revenues of approximately $16.7 billion for the fiscal year ending January 3, 2025, and employs around 47,000 globally [6]

Core Insights - Leidos and Second Front Systems have formed a strategic partnership aimed at streamlining the approval process for commercial and government software, thereby reducing costs and risks for government customers [1][2]. Company Overview - Leidos is a leading technology and industry player serving government and commercial clients, with approximately $16.7 billion in annual revenues for the fiscal year ending January 3, 2025, and a workforce of 47,000 employees globally [5]. - Second Front Systems (2F) is a public-benefit software company focused on accelerating secure software development and deployment across government and regulated networks, leveraging expertise from national security veterans [6]. Partnership Details - Leidos will act as the preferred services partner for 2F, managing the Game Warden platform in both classified and unclassified environments, which is designed to enhance the efficiency of secure software deployment [2][4]. - The Game Warden platform automates development and security processes across multiple cloud environments, facilitating compliance and reducing deployment timelines from years to weeks [4][6]. Strategic Goals - The partnership aims to deliver secure, production-ready software solutions to government teams more rapidly, addressing the urgent need for such capabilities in defense, intelligence, and civilian sectors [3][5].

Group 1 - The article emphasizes the value of contrarian investing, suggesting that going against prevailing market sentiments can be beneficial [1] - In February, concerns about government spending cuts from the Department of Government Efficiency (DOGE) negatively impacted market sentiment, leading to a decline in stock prices [1] Group 2 - The author expresses a preference for investing in high-quality stocks and businesses that are managed by disciplined capital allocators [1] - The focus is on companies that generate exceptional returns on capital and have the ability to compound invested capital over long periods [1]

Core Insights - Leidos Holdings, Inc. (LDOS) reported second-quarter 2025 adjusted earnings of $3.21 per share, exceeding the Zacks Consensus Estimate of $2.63 by 22.1% and improving 22.1% from the prior-year quarter's $2.63 [1] - Total revenues reached $4.25 billion, surpassing the Zacks Consensus Estimate of $4.23 billion by 0.5% and reflecting a year-over-year increase of 2.9% driven by strong demand in Defense Systems [2] - The company raised its 2025 EPS guidance to $11.15-$11.45, higher than the previous projection of $10.35-$10.75, with the Zacks Consensus Estimate for earnings at $10.81, below the new guidance [11] Financial Performance - GAAP earnings were reported at $3.01 per share, an increase from $2.37 in the prior-year quarter [1] - Adjusted operating income rose to $605 million from $524 million year-over-year, with an adjusted operating margin of 14.2%, up from 12.7% [4] - Cash and cash equivalents totaled $930 million as of July 4, 2025, compared to $849 million as of January 3, 2025 [10] Revenue Breakdown - National Security and Digital segment revenues increased by 3.3% year-over-year to $1.87 billion, with adjusted operating income improving to $195 million [5] - Health & Civil segment revenues were $1.27 billion, up 0.7% year-over-year, with adjusted operating income totaling $317 million [6] - Defense Systems segment revenues amounted to $543 million, reflecting a 9.7% year-over-year increase driven by higher volumes in space sensing and integrated air defense [8] Backlog and Guidance - Total backlog stood at $46.21 billion, slightly down from $46.30 billion at the end of the first quarter of 2025, with $7.12 billion funded [3] - The company expects 2025 revenues to be in the range of $17.00-$17.25 billion, compared to the prior guidance of $16.90-$17.30 billion [12] - Operating cash flow outlook was raised to approximately $1.65 billion, up from the previous guidance of $1.45 billion [12]