Value
9.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.0 |
| P/S | 9.8 |
| EV/EBITDA | 6.8 |
| Fwd P/E | 9.5 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 8.3x
- ▸PEG: 0.41
- ▸Attractively valued
LDOS · Why this verdict
Why Leidos Holdings (LDOS) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Trading at a forward price-to-earnings of 8.7 times and a PEG ratio of 0.43, the stock screens as inexpensively priced relative to its earnings growth, with roughly 44% headroom remaining to the analyst consensus price target. Valuation breakdown | Forward P/E expands toward 12x within 12 months as the technical downtrend resolves and fundamental re-rating takes hold. | →Stable |
| CounterGovernment IT contractors often trade at compressed multiples due to budget appropriation uncertainty and procurement cycle delays; a cheap multiple can persist or compress further if federal spending headwinds intensify. | ||
With approximately 87% of revenue sourced from U.S. government agencies and nearly half tied to a single department-level cluster, the company's top-line is highly sensitive to budget appropriations, continuing resolutions, and program-level decisions outside management's control. Bear case | Non-government revenue grows to exceed 20% of total for 2 consecutive quarters, reducing dependence on federal spending below 80%. | →Stable |
| CounterDeeply embedded government relationships often provide long-term contract visibility and high switching costs that make concentration a source of stable recurring revenue rather than a source of fragility. | ||
The company has beaten consensus estimates in each of the last four quarters, with an average positive surprise of about 12% across the trailing year, reflecting a management team that consistently delivers above initial guidance. Earnings | The beat streak extends for at least 3 of the next 4 quarters, maintaining an average positive EPS surprise above 5%. | →Stable |
| CounterThe most recent beat of 7.6% is the smallest in the trailing four quarters, suggesting that estimate accuracy is improving and the cushion for future outperformance may be narrowing toward a ceiling. | ||
The company generates a 31% return on equity, reflecting disciplined capital deployment and above-average profitability relative to the asset base it manages — a quality metric that typically supports valuation durability over time. Quality breakdown | Return on equity stays above 20% for the next four quarters, confirming sustained capital efficiency. | →Stable |
| CounterFinancial leverage at a debt-to-equity of 1.4 amplifies the ROE figure; if revenue contracts and debt-service requirements remain fixed, the same leverage that flatters ROE in favorable conditions can compress it sharply in a shortfall. | ||
A death cross pattern, positioning below all major moving averages, and a 200-day moving average slope declining at 3.6% per month confirm an active downtrend — making this a technically constrained setup that warrants patience before any new commitment. Momentum breakdown | Stock reclaims the 200-day moving average and the trend slope turns flat or positive for more than 30 consecutive days. | →Stable |
| CounterAn RSI of 21 marks extreme oversold territory, and a volume surge at twice the average daily rate during the recent selloff can signal capitulation rather than continuation; if selling exhausts, a mean-reversion rally may materialize quickly. | ||
Trading at a forward price-to-earnings of 8.7 times and a PEG ratio of 0.43, the stock screens as inexpensively priced relative to its earnings growth, with roughly 44% headroom remaining to the analyst consensus price target.
→StableValuation breakdown
- Expectation
- Forward P/E expands toward 12x within 12 months as the technical downtrend resolves and fundamental re-rating takes hold.
CounterGovernment IT contractors often trade at compressed multiples due to budget appropriation uncertainty and procurement cycle delays; a cheap multiple can persist or compress further if federal spending headwinds intensify.
With approximately 87% of revenue sourced from U.S. government agencies and nearly half tied to a single department-level cluster, the company's top-line is highly sensitive to budget appropriations, continuing resolutions, and program-level decisions outside management's control.
→StableBear case
- Expectation
- Non-government revenue grows to exceed 20% of total for 2 consecutive quarters, reducing dependence on federal spending below 80%.
CounterDeeply embedded government relationships often provide long-term contract visibility and high switching costs that make concentration a source of stable recurring revenue rather than a source of fragility.
The company has beaten consensus estimates in each of the last four quarters, with an average positive surprise of about 12% across the trailing year, reflecting a management team that consistently delivers above initial guidance.
→StableEarnings
- Expectation
- The beat streak extends for at least 3 of the next 4 quarters, maintaining an average positive EPS surprise above 5%.
CounterThe most recent beat of 7.6% is the smallest in the trailing four quarters, suggesting that estimate accuracy is improving and the cushion for future outperformance may be narrowing toward a ceiling.
The company generates a 31% return on equity, reflecting disciplined capital deployment and above-average profitability relative to the asset base it manages — a quality metric that typically supports valuation durability over time.
→StableQuality breakdown
- Expectation
- Return on equity stays above 20% for the next four quarters, confirming sustained capital efficiency.
CounterFinancial leverage at a debt-to-equity of 1.4 amplifies the ROE figure; if revenue contracts and debt-service requirements remain fixed, the same leverage that flatters ROE in favorable conditions can compress it sharply in a shortfall.
A death cross pattern, positioning below all major moving averages, and a 200-day moving average slope declining at 3.6% per month confirm an active downtrend — making this a technically constrained setup that warrants patience before any new commitment.
→StableMomentum breakdown
- Expectation
- Stock reclaims the 200-day moving average and the trend slope turns flat or positive for more than 30 consecutive days.
CounterAn RSI of 21 marks extreme oversold territory, and a volume surge at twice the average daily rate during the recent selloff can signal capitulation rather than continuation; if selling exhausts, a mean-reversion rally may materialize quickly.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Leidos Holdings is a fundamentally sound government technology franchise — with a perfect four-quarter earnings beat streak, attractive valuation at 8.7 times forward earnings, and a 31% return on equity — currently in a confirmed price downtrend that warrants caution before adding, with heavy federal customer concentration representing the key structural risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 6.2 |
| Gross margin | 0.0 |
| Op margin | 4.9 |
| Net margin | 4.1 |
| Current ratio | 5.2 |
| FCF quality | 6.2 |
| Moat | 4.9 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 31%
- ▸No competitive moat
Growth
4.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.4 |
| EPS growth | 6.0 |
Momentum
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 4.3 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.2%/30d — confirmed downtrend
Sentiment
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 7.3 |
| Price target | 9.6 |
- ▸Analyst upside: 55%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $514,561 (0.004% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.9 |
| quality rank | 6.5 |
| growth rank | 3.6 |
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.8 |
| support resistance | 6.5 |
| 52w position | 0.7 |
| gap | 5.0 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 7.3 |
| volatility | 2.3 |
| put call | 4.3 |
| implied vol | 3.7 |
| beta | 9.7 |
| debt equity | 4.3 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.3 |
| dividend safety | 7.0 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 158.0%
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (6)
- MOMENTUM:5.8>=5.5
- ASYMMETRY:4.3>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:23d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=5.8>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
4.27
Upside
+39.1%
Downside
9.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 23d with 4/4 beat streak
SuitabilitySpeculative — Drawdown -47% (>40% off 52w high)
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:5.8>=5.5. Top dim: Value at 9.1; weakest: Peer rank at 4.3. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Value at 9.1, Sentiment at 7.7, and Catalyst at 6.7; the weakest are Peer rank at 4.3, Technical at 4.5, and Growth at 4.7. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 4.27 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Delivery
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Attractive Valuation Deep Discount
Trip ifForward P/E expands above 14x from the current 8.7x without a commensurate upward revision in earnings estimates.
- P3Strong Return On Equity
Trip ifReturn on equity falls below 20% for 2 consecutive quarters.
- P4Confirmed Downtrend Blocks Entry
Trip ifStock reclaims the 200-day moving average and the trend slope turns positive for more than 30 consecutive days.
- P5Government Customer Concentration
Trip ifNon-government revenue exceeds 20% of total for 2 consecutive quarters, reducing federal customer dependence below 80%.