Telos (TLS) Stock Forecast & Price Target

Telos Corp has demonstrated a positive financial trajectory with significant revenue growth in its Security Solutions segment, which accounted for over 83% of total revenue in the most recent quarter, an increase from 50% a year earlier. The company's existing contracts are anticipated to contribute approximately $70 million in calendar year 2025, reflecting an upgrade from previous estimations driven by contract extensions and scope expansions. Additionally, Security Solutions revenue reached $21.9 million, representing a 6% year-over-year increase and exceeding market expectations, bolstered by robust performance in TSA PreCheck and a successful resolution of the DMDC program.

Telos Corporation's revenue forecast for CY25 has been modestly reduced to $139 million, reflecting a 28% year-over-year growth, which is lower than previous expectations due to cautious demand and unfavorable contract dynamics. The Security Solutions segment saw a significant year-over-year decline in gross margins to 44.1%, exacerbated by rising costs and a less favorable product mix, while the Secure Networks segment experienced a dramatic 78% decline in revenue compared to the previous year, indicating serious operational challenges. Additionally, guidance for revenue in the first quarter fell short of consensus expectations, with delayed revenue recognition in specific programs further impacting the overall growth outlook.