Defense contractor Leidos (NYSE: LDOS) will be reporting earnings this Tuesday before market open. Here’s what investors should know.
Leidos beat analysts’ revenue expectations last quarter, reporting revenues of $4.56 billion, up 7.2% year on year. It was a very strong quarter for the company, with a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
Is Leidos a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Leidos’s revenue to grow 5.9% year on year, in line with the 6.7% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Leidos rarely misses Wall Street’s revenue estimates.
Looking at Leidos’s peers in the defense contractors segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Huntington Ingalls delivered year-on-year revenue growth of 10.8%, beating analysts’ expectations by 5.3%, and RTX reported revenues up 11.1%, topping estimates by 3.3%. Huntington Ingalls traded up 13.5% following the results while RTX’s stock price was unchanged.
Read our full analysis of Huntington Ingalls’s results here and RTX’s results here.
In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the defense contractors stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3% on average over the last month. Leidos is up 19.1% during the same time and is heading into earnings with an average analyst price target of $151.73 (compared to the current share price of $142.25).
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