Leidos, a major player in the defense and information technology sector, has recently received a Neutral rating from UBS, with a price target of $182.00. The firm's analysis shows a strong book-to-bill ratio over the past three years, indicating solid growth for the company.
Leidos has seen a 54% year-to-date return and has a market capitalization of $22 billion. Nine analysts have revised their earnings estimates upward, reflecting confidence in the company's financial health. The UBS analyst mentioned that new claims from the Veterans Benefits Administration (VBA) are expected to contribute to sustainable volume and potentially favorable margins for Leidos. However, the company anticipates slower growth in 2025 and faces above-average exposure to the Federal Civilian sector, which could impact its valuation.
Leidos has been awarded a contract worth up to $235 million by the U.S. Department of Health and Human Services to modernize the Organ Procurement and Transplant Network (OPTN). The company reported strong financial results in Q3 2024, with a record adjusted EBITDA margin of 14.2% and a 44% increase in adjusted diluted EPS. Leidos has raised its 2024 revenue guidance and has a positive sentiment from analysts. The company has increased its dividend and has a total backlog of $40.6 billion.
Leidos is currently trading at a slightly undervalued P/E ratio of 18.6x. The company's future prospects depend on its ability to navigate government efficiency measures and adapt to changing market conditions.