Leidos Hld (LDOS) Stock Forecast & Price Target

Leidos Holdings Inc. has demonstrated substantial growth, particularly in its Health & Civil segment, where increased exam volumes have enhanced margins, aided by scale efficiencies. The company reported a notable rise in national security revenues, which increased by 8% year-over-year to $2.02 billion, surpassing expectations due to strong contract awards and ongoing IT/mission support. Additionally, the robust growth of defense systems revenues, which rose 11% year-over-year to $582 million, combined with impressive EBIT margin improvements from 14.5% in 2023 to an expected 24.3% in the first half of 2025, all contribute to a positive outlook on Leidos Holdings's financial performance.

Leidos Holdings Inc. faces significant challenges that contribute to a negative outlook regarding its stock, primarily driven by the projected decline in margins for the second half of 2025 compared to the first half. The company is also at risk of reduced medical exam volumes, particularly in its managed health services sector, which could further pressure margins, compounded by uncertainties surrounding future defense spending and the potential impact of governmental budget constraints. Moreover, ongoing protests and legal challenges against major contract awards, coupled with possible international regulatory risks and the threat of government shutdowns, increase the financial uncertainty surrounding the company’s operations.