Leidos Shares Slide as Security Firm Lags Broader Tech Market
Leidos stock declined 2.5% to $127.69, underperforming the S&P 500 and Nasdaq indices despite positive revenue outlooks.
Leidos (LDOS) shares closed at $127.69 in the latest session, marking a 2.5% decrease from the previous day. This performance lagged the S&P 500, which rose 0.17%, and the Nasdaq, which gained 0.4%. In the prior trading day, Leidos had already dropped 7.36%, a decline that contrasted with the Computer and Technology sector’s 0.37% increase and the S&P 500’s 1.29% loss, highlighting the company’s recent underperformance relative to broader market trends.
According to data cited by GN stocks/sp500, investors are focused on the upcoming earnings report where consensus estimates predict an earnings per share (EPS) of $3.00. This figure implies a 1.64% year-over-year decline. However, the same consensus projects total revenue of $4.72 billion for the quarter, representing a 5.52% increase compared to the same period in the prior fiscal year. This divergence suggests that while revenue growth is accelerating, margin pressures or one-time costs may be affecting bottom-line profitability.
Full-Year Revenue Growth Outlook
Looking at the full fiscal year, analysts expect Leidos to report earnings of $12.27 per share, a 2.34% increase from the previous year. Concurrently, the forecasted annual revenue stands at $18.29 billion, indicating a 6.52% year-over-year expansion. These figures position the company for modest top-line growth, although the modest EPS increase indicates that operating leverage may not significantly improve net income margins in the near term.
Valuation Metrics Compare Favorably
Leidos currently trades at a forward P/E ratio of 10.67, which is at a discount to the industry average of 13.72. The company’s Price/Earnings to Growth (PEG) ratio is 1.47, slightly above the industry mean of 1.39. Despite the higher PEG ratio, the lower forward P/E suggests that the market is pricing in conservative growth expectations relative to its peers in the Computer and Technology sector.
Recent estimate revisions have been negative, with the consensus EPS estimate moving 0.9% lower over the past month. This downward adjustment reflects cautious sentiment among analysts regarding the company’s short-term profitability trends. Consequently, Leidos holds a neutral rating in the Zacks Rank system, reflecting mixed signals from recent earnings revisions and current valuation metrics.
Sector Ranking Indicates Lagging Performance
The Computers and IT Services industry, to which Leidos belongs, is currently ranked 149th out of more than 250 industries. This places the sector in the bottom 40% of the market. The industry’s lower ranking underscores a broader trend of underperformance in technology services, which may be contributing to the pressure on Leidos’ stock price despite its specific revenue growth projections.
