Have you ever been taking note of shares of Leidos (LDOS)? Shares have been on the transfer with the refill 3.1% over the previous month. The inventory hit a brand new 52-week excessive of $160.33 within the earlier session. Leidos has gained 47.5% for the reason that begin of the yr in comparison with the 6% transfer for the Zacks Aerospace sector and the -1% return for the Zacks Aerospace – Protection business.
What’s Driving the Outperformance?
The inventory has an amazing report of optimistic earnings surprises, because it hasn’t missed our earnings consensus estimate in any of the final 4 quarters. In its final earnings report on July 30, 2024, Leidos reported EPS of $2.63 versus consensus estimate of $2.26 whereas it beat the consensus income estimate by 2.23%.
For the present fiscal yr, Leidos is predicted to put up earnings of $8.95 per share on $16.27 billion in revenues. This represents a 22.6% change in EPS on a 5.39% change in revenues. For the following fiscal yr, the corporate is predicted to earn $9.40 per share on $16.97 billion in revenues. This represents a year-over-year change of 5.06% and 4.28%, respectively.
Valuation Metrics
Leidos could also be at a 52-week excessive proper now, however what would possibly the longer term maintain for the inventory? A key side of this query is having a look at valuation metrics with the intention to decide if the corporate is due for a pullback from this degree.
On this entrance, we will have a look at the Zacks Fashion Scores, as these give traders quite a lot of methods to comb by means of shares (past trying on the Zacks Rank of a safety). These types are represented by grades operating from A to F within the classes of Worth, Development, and Momentum, whereas there’s a mixed VGM Rating as properly. The thought behind the type scores is to assist traders decide probably the most acceptable Zacks Rank shares primarily based on their particular person funding type.
Leidos has a Worth Rating of B. The inventory’s Development and Momentum Scores are B and D, respectively, giving the corporate a VGM Rating of B.
By way of its worth breakdown, the inventory at the moment trades at 17.8X present fiscal yr EPS estimates, which isn’t in-line with the peer business common of 21.2X. On a trailing money move foundation, the inventory at the moment trades at 11.4X versus its peer group’s common of 16.7X. Moreover, the inventory has a PEG ratio of 1.43. This is not sufficient to place the corporate within the high echelon of all shares we cowl from a price perspective.
Zacks Rank
We additionally want to have a look at the Zacks Rank for the inventory, as this supersedes any pattern on the type rating entrance. Happily, Leidos at the moment has a Zacks Rank of #2 (Purchase) due to rising earnings estimates.
Since we suggest that traders choose shares carrying Zacks Rank of 1 (Sturdy Purchase) or 2 (Purchase) and Fashion Scores of A or B, it seems to be as if Leidos meets the listing of necessities. Thus, it appears as if Leidos shares might have a bit extra room to run within the close to time period.
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Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.
