LDOS - Embedded Expectations Analysis - 2020 03 25
Leidos Holdings, Inc. (LDOS:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 14.0x Uniform P/E, implying bearish expectations for the firm. However, management is confident about their Defense Solutions segment growth, the Navy NextGen contract, and their capital allocation planSpecifically, management is confident that revenues in their Defense Solutions segment accelerated throughout the year, that they invested in their employees through improved benefits, and that they are taking on no hardware implementation risk in the Navy NextGen contract. In addition, they are confident that their balance between share repurchases, dividends, M&A, and capex is consistent with their capital allocation plan and that companies need to have already done prerequisite work in order to bid on opportunities in their space
Leidos Holdings is a holding company. Through its subsidiaries, the company is engaged in a science, engineering and information technology that provides services and solutions in the defense, intelligence, civil and health markets. The company's defense solutions segment deploys solutions in the areas of intelligence surveillance and reconnaissance, enterprise information technology, integrated systems, cybersecurity and global services. The company's civil segment integrates and protects physical, digital and data domains. The company's health segment delivers solutions to federal and commercial customers that are responsible for the health and well-being of people including service members and veterans.
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