LDOS - Embedded Expectations Analysis - 2020 10 13
Leidos Holdings, Inc. (LDOS:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 16.8x Uniform P/E. At these levels, the market has bullish expectations for the firm, and management may have concerns about the Navy NextGen contract, revenue declines, and their aviation systems engineering expertiseSpecifically, management may have concerns about disruptions with the Navy NextGen and Reserve Health Readiness programs, and may lack confidence in the Health segment's recovery. Furthermore, they may be downplaying concerns about the 2021 federal budget and their reliance on the Navy NextGen program for growth. In addition, management may lack confidence in their ability to mitigate revenue declines and execute the U.S. Customs and Border Protection software contract. Moreover, they may be exaggerating their focus on the customer and their expertise in aviation systems engineering. Finally, management may have concerns about the Health segment costs not covered by the CARES act
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.