RESTON, Va. - Leidos Holdings , Inc. (NYSE: NYSE:LDOS), a Fortune 500® information technology, engineering, and science solutions company with a market capitalization of $22 billion, has been awarded three new contracts totaling over $30 million by the Defense Information Systems Agency (DISA). These contracts are a continuation of the Defense Enclave Services (DES) program, aimed at transitioning users to the modernized Department of Defense Network (DoDNet). According to InvestingPro analysis, Leidos appears undervalued based on its Fair Value metrics, with 9 analysts recently revising their earnings expectations upward.
The first task order under these awards will support the DoDNet Generation 2 Release 2. This initiative is designed to prepare the network for large-scale migrations of Fourth Estate Defense Agencies and Field Activities (DAFAs), providing cloud-based management services, automation, Zero Trust cybersecurity enhancements, and an improved user experience. The goal is to ensure DoDNet can offer reliable, secure, and scalable operations to support the unique missions of its user community.
The subsequent two awards will commence the migration process for two specific DAFAs: the Defense Contract Management Agency and the Defense Contract Audit Agency. These migrations are part of the larger effort to integrate a total of 14 DAFAs onto the DoDNet platform.
Leidos, which has been leading operations for the DES DoDNet program since February 2022, is working in close collaboration with DISA. They expect to have migrated approximately 100,000 users to DoDNet by the end of 2025, with the network projected to support around 370,000 DAFA users and endpoints upon full implementation.
The recent awards build upon Leidos' significant contract win earlier this year, an $823 million, five-year task order from DISA for the operations and sustainment of DoDNet. Leidos' involvement in the DES program and its continued partnership with DISA underscore the company's commitment to enhancing the IT infrastructure that supports the nation's defense agencies and warfighters.
Leidos, headquartered in Reston, Virginia, reported annual revenues of about $15.4 billion for the fiscal year ended December 29, 2023, with current trailing twelve-month revenue reaching $16.28 billion. The company employs a global workforce of 48,000, focusing on creating technology solutions for highly regulated industries such as national security and health. InvestingPro data shows the company has achieved impressive year-to-date returns of 53.7%, maintaining strong financial health with a GOOD overall score. Discover more insights about Leidos and 1,400+ other stocks through comprehensive Pro Research Reports, available exclusively on InvestingPro.
The information reported is based on a press release statement from Leidos Holdings, Inc.
In other recent news, Leidos Holdings has been the focus of several noteworthy developments. The company reported a robust financial performance for Q3 2024, marking its sixth consecutive quarter of growth. Leidos posted a record adjusted EBITDA margin of 14.2%, a 44% increase in adjusted diluted EPS, and a 7% revenue increase from the previous year, reaching $4.19 billion. Consequently, Leidos raised its 2024 revenue guidance to between $16.35 billion and $16.45 billion.
Leidos also secured a significant contract, potentially worth up to $235 million, to modernize the Organ Procurement and Transplant Network (OPTN). This effort aims to enhance the transparency, performance, governance, and efficiency of the organ donation and transplantation process. Furthermore, the company announced a quarterly dividend increase to $0.40 per share and secured $8.1 billion in net bookings, resulting in a total backlog of $40.6 billion.
In terms of analyst feedback, UBS initiated coverage on Leidos with a Neutral rating, highlighting the company's strong book-to-bill ratio and potential for sustainable volume from new claims from the Veterans Benefits Administration. However, concerns were raised about Leidos' above-average exposure to the Federal Civilian sector. Meanwhile, JPMorgan (NYSE:JPM) revised its price target for Leidos to $205, up from $185, citing strong performance trends in the Federal IT sector, particularly in the Health & Civil sector.
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