Leidos Holdings Intrinsic Value Calculation – Leidos Holdings Reports Revenue Beat but Earnings Miss Estimates
May 3, 2023
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Leidos Holdings ($NYSE:LDOS) Inc. (LEI), a publicly traded science, engineering, and information technology company, recently reported its third-quarter earnings results. While the company reported a revenue beat of $3.69B, which exceeded estimates by $40M, it posted a Non-GAAP EPS of $1.47, falling short of the expectations by $0.12. Leidos Holdings is a provider of scientific, engineering, and information technology services, with a focus on the defense, intelligence, civilian and health markets. It operates through two segments: Defense and Intelligence and Civil.
Overall, Leidos Holdings reported mixed third-quarter results with both revenue and earnings surpassing and falling short of analysts’ expectations respectively. The company’s strong performance in defense and intelligence markets is likely to help drive growth in the coming quarters.
Earnings
LEIDOS HOLDINGS recently reported its financial results for FY2022 Q4 as of December 31 2022. The company earned 3697.0M USD in total revenue and 177.0M USD in net income. Compared to the same period last year, total revenue increased by 5.9% and net income increased by 1.7%.
Over the past three years, LEIDOS HOLDINGS’ revenue has grown from 3252.0M USD to 3697.0M USD. Although the company reported a revenue beat, earnings missed estimates.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Leidos Holdings. More…
| Total Revenues | Net Income | Net Margin |
| 14.4k | 685 | 5.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Leidos Holdings. More…
| Operations | Investing | Financing |
| 986 | -313 | -865 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Leidos Holdings. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 13.07k | 8.72k | 31.38 |
Key Ratios Snapshot
Some of the financial key ratios for Leidos Holdings are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 9.1% | 9.7% | 7.5% |
| FCF Margin | ROE | ROA |
| 6.0% | 16.2% | 5.2% |
Stock Price
This sent their stock tumbling as it opened at $90.2 and closed at $80.6, a plunge of 14.5% from the previous day’s closing price of 94.3. This is the biggest one-day drop the company has experienced in over two years, causing the share price to be lower than it has been since the beginning of June. The disappointing earnings results outweighed the positive news that the company’s revenue was higher than expected. Analysts suggest that this could be a sign of a weaker outlook for the company in the near future. Live Quote…
Analysis – Leidos Holdings Intrinsic Value Calculation
At GoodWhale, we conducted an analysis of LEIDOS HOLDINGS‘s wellbeing. Our proprietary Valuation Line showed that the fair value of the LEIDOS HOLDINGS stock should be around $107.6. However, currently, it is traded at $80.6, which is 25.1% lower than the estimated fair value. This suggests that there could be potential opportunities to invest in LEIDOS HOLDINGS at relatively low prices. More…
Peers
Leidos Holdings Inc is an American technology company that provides products and services for the national security, health, and engineering sectors. The company operates in three segments: National Security Solutions, Health Solutions, and Engineering Solutions. Leidos Holdings Inc’s competitors include Vama Industries Ltd, STS Evermedia Corp, and Societe Pour L’Informatique Industrielle.
– Vama Industries Ltd ($BSE:512175)
Vama Industries Ltd is an Indian company that manufactures automotive components and parts. It has a market cap of 370.93M as of 2022 and a Return on Equity of 3.33%. The company was founded in 1963 and is headquartered in Mumbai, India. Vama Industries Ltd manufactures a variety of automotive components and parts, including engine parts, suspension parts, and electrical parts.
– STS Evermedia Corp ($OTCPK:SEVM)
Societe Pour L’Informatique Industrielle is a France-based company that provides software solutions and services for industrial applications. The Company operates in three segments: Software Solutions, Services and Maintenance, and Hardware. The Software Solutions segment offers software products, including design and development tools, manufacturing execution systems, and industrial connectivity solutions. The Services and Maintenance segment provides services, such as consulting, training, and support, as well as maintenance and support services for software products. The Hardware segment offers hardware products, such as programmable logic controllers, human machine interfaces, and industrial PCs.
Summary
Leidos Holdings is a publicly traded American defense and technology company. Investors have recently reacted negatively to the company’s fourth-quarter earnings report, which showed that the company’s non-GAAP earnings per share (EPS) of $1.47 missed analysts’ expectations by $0.12.
However, the company’s revenue of $3.69 billion beat estimates by $40 million. The stock price dropped on the day following the release of the earnings report. Analysts and investors will be closely monitoring the company’s future performance, as this could influence their decisions regarding whether to hold or sell Leidos stock.
Additionally, they will be keeping an eye out for how management plans to address the recent earnings miss and whether any action gets taken in order to improve the company’s future financial performance.
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