Leidos Holdings, Inc. (LDOS) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Leidos Holdings, Inc.

Updated on October 3, 2026 · accounts published on August 4, 2026

Reading of October 3, 2026: A profitable business with record margins and fast-rising earnings

Leidos trades at a P/E of 11.0× over the last 12 months, 47 % below its ten-year median and lower than 99 % of the time in the last decade.

• Is Leidos expensive or cheap? Its P/E has been lower only 1 % of the time in the last decade and sits 69 % below the sector median.
• How is the business doing? Operating margin hit 12.3 % in fiscal 2025, the highest in 12 years and nearly double the 6.7 % average.
• How strong is the balance sheet? Net debt was 2.0× EBITDA in fiscal 2025, right at the limit for IT services, with a safe-zone Altman Z of 4.2.
• What to expect from the next earnings? Leidos reports on November 3, 2026; analysts expect EPS of $3.00 after eight straight quarterly beats.
• Does Leidos grow with real cash or by diluting shareholders? Stock-based pay was just 0.6 % of revenue in fiscal 2025, but a 17.7 % gross margin trails the 30 % IT services bar.

Is Leidos expensive or cheap?

Leidos trades at a P/E of 11.0× over the last 12 months. That is 47 % below its ten-year median of 20.6× and close to the decade low of 9.5×. The sector's median P/E is 35.5×, which puts Leidos 69 % below its peers. Its EV/EBITDA of 9.0× compares with a five-year average of 13.9×, well under the 90 % line that marks a cheap multiple in technology. A free cash flow yield of 16 % over the last 12 months supports the low multiples. The market is clearly doubtful: the stock is down 35 % over 12 months and sits 38 % below its 52-week high of $199.55.

How is the business doing?

Revenue grew just 3.1 % over the last 12 months while EPS rose 21 %, so margins are driving earnings. The operating margin is 11.5 % over the last 12 months, against a 2014-2025 average of 6.7 %. The 12.3 % reached in fiscal 2025 was the best of those 12 years. ROIC of 14.4 % is 6.5 points above the sector median of 7.9 %, and ROE reaches 28 %. The weak spot is consistency: ROIC cleared 10 % in only 3 of the last 10 fiscal years, with a low of 3.3 % in 2023. A Piotroski score of 8 out of 9 shows the current quarters are solid.

How strong is the balance sheet?

Debt is the item to watch. Net debt was $37.22 per share in fiscal 2025. That equals 32 % of the current share price and 2.0× EBITDA, exactly the ceiling considered tolerable for IT services. Debt-to-equity is 1.24 over the last 12 months. Liquidity eases the concern: the current ratio is 1.63 and the Altman Z of 4.2 is in the safe zone. Shareholder returns are modest but steady. The dividend yield is 1.4 % over the last 12 months, the dividend per share has risen for five consecutive fiscal years through 2025, and the payout is only 14 % of earnings.

What to expect from the next earnings?

Leidos has beaten EPS estimates in each of the last 8 quarters. On August 4, 2026 it reported $3.26 against the $2.91 expected, a 12 % beat. For the quarter due on November 3, 2026, the consensus is $3.00, which is below that last result. Estimates are stable. Over the last 18 days the 2027 EPS consensus moved only from $12.39 to $12.38 across 10 analysts, and revenue forecasts barely changed. Of the 28 analysts covering the stock, 17 recommend buying, 11 holding and none selling. A miss would end a long streak while the stock trades near its lowest multiples of the decade.

Does Leidos grow with real cash or by diluting shareholders?

Generic multiples fall short in technology. Growth, pricing power and dilution say more about quality there. On dilution Leidos is clean: stock-based compensation was 0.6 % of revenue in fiscal 2025, far below the 10 % healthy ceiling. The other tests are weaker. Revenue per share grew 7.3 % a year over fiscal 2022-2025, half the 15 % benchmark. The gross margin was 17.7 % in fiscal 2025, well below the 30 % expected of IT services, which points to limited pricing power. Free cash flow was 9.5 % of revenue, short of the 20 % benchmark. These gaps help explain the discount to a sector with a median P/E of 35.5×.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.