Telos (TLS) Stock Forecast & Price Target

Telos Corp has demonstrated a robust revenue trajectory, with the Security Solutions segment contributing over 83% of total revenue, reflecting a significant increase from 50% a year ago. In the fourth quarter, Security Solutions generated $21.9 million in revenue, marking a 6% year-over-year growth and exceeding analyst expectations, driven by the strong ramp-up of the TSA PreCheck program and the introduction of significant revenue from the DMDC program. Additionally, expected improvements in gross margins, with GAAP gross margins projected to rise 150-215 basis points year-over-year, underline the company’s efficient operational performance and growing profitability in its security solutions.

Telos Corp's negative outlook is primarily influenced by a revised revenue forecast for CY25, now projected at $139 million, reflecting a slight decline from previous estimates amid cautious demand. The Security Solutions segment has also experienced a significant decrease in gross margins, dropping 730 basis points year-over-year due to unfavorable cost dynamics and product mix. Additionally, the Secure Networks segment faced a substantial revenue decline of 78% year-over-year, highlighting operational challenges that complicate the company’s overall financial stability and growth prospects.