Despite its impressive fundamentals, NYSE:LDOS remains undervalued.

Last update: Jan 27, 2025

Take a closer look at LEIDOS HOLDINGS INC (NYSE:LDOS), a remarkable value stock uncovered by our stock screener. NYSE:LDOS excels in fundamentals and maintains a very reasonable valuation. Let's break it down further.

Valuation Analysis for NYSE:LDOS

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:LDOS was assigned a score of 7 for valuation:

LDOS's Price/Earnings ratio is a bit cheaper when compared to the industry. LDOS is cheaper than 78.48% of the companies in the same industry.
When comparing the Price/Earnings ratio of LDOS to the average of the S&P500 Index (28.58), we can say LDOS is valued slightly cheaper.
LDOS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LDOS is cheaper than 78.48% of the companies in the same industry.
LDOS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.47.
Based on the Enterprise Value to EBITDA ratio, LDOS is valued a bit cheaper than 75.95% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, LDOS is valued cheaply inside the industry as 81.01% of the companies are valued more expensively.
LDOS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of LDOS may justify a higher PE ratio.
LDOS's earnings are expected to grow with 17.03% in the coming years. This may justify a more expensive valuation.

Analyzing Profitability Metrics

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:LDOS has achieved a 6:

Looking at the Return On Assets, with a value of 8.99%, LDOS is in the better half of the industry, outperforming 78.48% of the companies in the same industry.
With a decent Return On Equity value of 25.99%, LDOS is doing good in the industry, outperforming 79.75% of the companies in the same industry.
LDOS's Return On Invested Capital of 11.98% is fine compared to the rest of the industry. LDOS outperforms 73.42% of its industry peers.
The last Return On Invested Capital (11.98%) for LDOS is above the 3 year average (8.10%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 7.37%, LDOS is in the better half of the industry, outperforming 77.22% of the companies in the same industry.
With a decent Operating Margin value of 10.83%, LDOS is doing good in the industry, outperforming 75.95% of the companies in the same industry.
In the last couple of years the Operating Margin of LDOS has grown nicely.

How do we evaluate the Health for NYSE:LDOS?

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:LDOS has earned a 5 out of 10:

LDOS has an Altman-Z score of 3.41. This indicates that LDOS is financially healthy and has little risk of bankruptcy at the moment.
LDOS has a Altman-Z score of 3.41. This is in the better half of the industry: LDOS outperforms 60.76% of its industry peers.
LDOS has a debt to FCF ratio of 3.72. This is a good value and a sign of high solvency as LDOS would need 3.72 years to pay back of all of its debts.

Growth Examination for NYSE:LDOS

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:LDOS boasts a 6 out of 10:

LDOS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 38.01%, which is quite impressive.
Measured over the past years, LDOS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.68% on average per year.
LDOS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.65% yearly.
Based on estimates for the next years, LDOS will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.77% on average per year.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of LDOS

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.