RESTON, Va. - Leidos Holdings , Inc. (NYSE: NYSE:LDOS), a company specializing in national security and health, has been awarded a substantial $738 million contract to continue providing IT and telecommunications support to various U.S. Air Force and Space Force components. This contract includes a focus on cybersecurity for operations within the national capital region.
The deal, announced today, is a follow-on indefinite delivery, indefinite quantity contract with a one-year base period and potential extensions totaling up to five and a half years. Leidos will deliver enterprise IT operations, cybersecurity, asset management, and engineering services, among others, to support the Air Force's mission-critical endeavors, including the National Military Command Center.
Steve Hull, president of Leidos' digital modernization sector, emphasized the company's longstanding relationship with the Air Force, which dates back to 2003. Hull stated, "We take great pride in securing critical, no-fail missions essential to our national security and we are excited to keep advancing the Air Force mission together."
Leidos, a Fortune 500® company, has reported annual revenues of approximately $15.4 billion for the fiscal year ended December 29, 2023. The firm employs about 47,000 people who support vital missions for government and commercial entities.
In other recent news, Leidos Holdings has been making significant strides in both contract acquisitions and artificial intelligence (AI) integration. The company secured a $631 million contract with the U.S. Army's DIABLO program, a $206 million contract with the National Geospatial-Intelligence Agency, and demonstrated its AI capabilities at its Trusted Mission AI Investor Day. RBC Capital Markets maintained its 'Sector Perform' rating on Leidos, noting the potential for a reevaluation of the company's stock value due to its engagement in AI technologies.
Leidos also posted strong quarterly results that led to upward revisions in its full-year guidance. In response, both Truist Securities and Baird increased their price targets for the company's stock, with Truist raising its target to $165 and Baird to $180. These revisions reflect the confidence of both firms in Leidos' continued growth and its ability to meet the revised targets.
InvestingPro Insights
As Leidos Holdings, Inc. (NYSE: LDOS) secures a significant contract to bolster IT and cybersecurity for the U.S. Air Force, the company's financial health and market position offer additional insights for investors. With a market capitalization of $19.55 billion and a track record of consistent dividend growth, Leidos stands out as a prominent player in the Professional Services industry. Notably, Leidos has raised its dividend for 5 consecutive years and maintained dividend payments for 13 consecutive years, showcasing its commitment to shareholder returns.
Analyzing the company's performance metrics, Leidos has demonstrated a solid revenue growth of 7.62% over the last twelve months as of Q1 2024. The company's gross profit margin stands at a healthy 15.19%, indicating its ability to maintain profitability amidst its operational costs. With analysts having revised their earnings upwards for the upcoming period, Leidos is poised for continued growth, underpinned by expectations of net income growth this year.
Investors seeking to delve deeper into Leidos' financials and market potential can explore additional InvestingPro Tips that highlight the company's prospects. For instance, Leidos' stock generally trades with low price volatility, providing a relatively stable investment opportunity. Moreover, the company is trading at a high earnings multiple, which could be indicative of market confidence in its future earnings capacity. For those interested in unlocking comprehensive analyses and tips, InvestingPro offers a wealth of resources, including 14 additional tips for Leidos. To access these insights and enhance your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
With a forward-looking approach, Leidos' latest contract and its robust financial standing present a compelling narrative for investors monitoring the defense and technology sectors. The company's engagement in securing national security missions aligns with its financial trajectory, as reflected in the real-time data and expert analysis provided by InvestingPro.
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