LDOS US S&P 500Russell 1000 Earnings call · transcribed from the recording
Leidos (LDOS) · Q3 2026 results and valuation
Share price: $133.89 · 2026-11-11
Results Q3 2026 vs Q2 2026 · previous quarter · published 3 Nov 2026 and 4 Aug 2026
Net income up 15.2% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
+15.2%
Net income vs Q2 2026
Outlook given
Net income 410.0M vs 356.0M
Revenue +1.6%
Against the same quarter last year (Q3 2025) it is +11.7%, so it is not just seasonal.
2 · How management spoke
Typical
More upbeat than 54% of company calls
Answers to analysts: upbeat, in line with the script.
Similar to last call.
3 · What stood out
Guidance
Prior to the close, Leidos forecasts SES revenue in the fourth quarter to be approximately $200 million, which is directly reflected in the new…
Valuation
Is Leidos undervalued?
Reverse DCF on net income from the last full fiscal year (no meaningful free cash flow: a bank, insurer or a year of negative cash flow) (2026-01-02), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 6.1% growth a year (3-year revenue growth), the model's fair value is $204.40 a share — the stock trades 34% below it. Today's price assumes 0.2% growth a year.
Current price
$133.89
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+0.2% for 10 yrs
Fair value / share
$204.40
Buy below
$153.30
Price vs fair value
Undervalued 34%
Price vs buy-below price
Undervalued 13%
Read between the lines
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Key theme
Leidos is leaning into that and it has a pathway for its munitions side of its defense tech business to be a billion…
Source quote
“We're leaning into that and we have a pathway for our munitions side of our defense tech business to be a billion... and around the nation about our weapons stockpile and the magazine depth of the country and the urgency to create new sources of supply for munitions. So we're very excited about where that business is going.”
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Guidance
Leidos expects Q4 health segment margins to be in the high teens, driven mostly by the VBA contract changes it previously discussed, and it isn't assuming the same level...
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Figure
The new JV is now a scaled market leader, well positioned to grow in the $5 billion global security products...
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Fading
Yes, as I said on my prepared remarks, Leidos was informed in It's one of the first ones that was asked this morning.
Source quote
“Yes, as I said on my prepared remarks, we were informed in It's one of the first ones that was asked this morning. As I said, that's driven by some administrative issues they have that their auditability and how those incentive payments have been given is in question.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Also, while third quarter bookings were solid, there were some delays and some decisions that didn't go our way, which will temper our growth momentum in Q4 and into 2027.”
“And so we're very proud of our team there and very proud of the fact that it's coming in even stronger than we had anticipated in our financial planning.”
“As such, you can expect us to continue to invest in our differentiated capabilities and deploy capital strategically to accelerate growth and create lasting value.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-10-02)
| Metric | Q3 2026period end 2026-10-02 | Q2 2026period end 2026-07-03 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 4.63B | 4.56B | +1.6% | 4.47B | +3.6% |
| Gross profit | 820.0M | 817.0M | +0.4% | 821.0M | −0.1% |
| Operating income | 553.0M | 514.0M | +7.6% | 535.0M | +3.4% |
| Net income | 410.0M | 356.0M | +15.2% | 367.0M | +11.7% |
| EPS | 3.28 | 2.81 | +16.7% | 2.82 | +16.3% |
| P/E today 11.9 | 10.5 | 10.2 | +0.3 | 18.3 | −7.8 |
Topics
Most discussed now
- New Total backlog is also a great news story, where it's up to $49.6 billion, 4% year on year.
- New Leidos is spending it as the opportunities actually trigger and they actually unfold.
- Leidos maintains a significant equity share in this JV, so Leidos' shareholders will share in the venture's long-term upside.
- As MySDR will run in the customer's cloud, Leidos also looks forward to adding new capabilities and functionality over time.
- At the same time, frankly, there are procurement decisions that continue to slide around, but Leidos doesn't see that as...
Faded since Q2 2026
- Fading Profitability increased significantly in Defense and Homeland from Q1 levels through strong program execution.
- Fading I'm pretty sure incentives will be a part of it.
- Fading That's why what I said, Gavin, about indications clear indications from the customer that Leidos can expect an extension of...
Latest announcements
Official filings, newest first.
- Results of operations · SEC 8-K
- Material agreement; Regulation FD disclosure · SEC 8-K
- Director or officer change · SEC 8-K
- Results of operations · SEC 8-K
- Director or officer change; Shareholder vote results · SEC 8-K
- Results of operations · SEC 8-K
- Material agreement; Regulation FD disclosure · SEC 8-K
- Acquisition or disposal; Regulation FD disclosure · SEC 8-K