Is Leidos Holdings, Inc. (LDOS) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $135.76, Leidos Holdings, Inc. (LDOS) trades 33% below TickerWorth's blended fair value of $202.45 per share — a discounted-cash-flow model cross-checked against peer multiples and asset value — meaning the market currently prices LDOS undervalued vs our estimate of what the business is intrinsically worth. Our fair value sits above the market, an implied +49.1% move to close the gap if the business performs in line with our assumptions. This is an educational model, not a price target or a recommendation — the value moves with the inputs, which you can test yourself using the WACC slider below.
One of the lenses behind that blended figure is a discounted-cash-flow model, which on its own values LDOS at about $192.01 per share. The rest of this page walks through that DCF — its assumptions, reverse-DCF and discount-rate sensitivity — because it is the auditable anchor of the blend.
The valuation discounts Leidos Holdings, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 7.7%, with a long-run terminal growth rate of 2.5%. About 79% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly -5.7% annual revenue growth for LDOS. Our base case instead compounds to about 3.6% a year over the same forecast, so the market is pricing in slower growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, LDOS's modeled DCF value ranges from about $122.36 to $391.58 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Leidos Holdings, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of LDOS's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind LDOS's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $17,174,000,000 | Leidos FY2025 10-K (accession 0001336920-26-000030, filed 2026-02-17), fiscal year ended 2026-01-02: us-gaap:Revenues, FY2025 (52 weeks to 2026-01-02). +3.1% on FY2024's $16,662M, which was a 53-week year, so underlying growth was a little better than 3%. Leidos runs a calendar-style fiscal year (ends on the Friday nearest 31 December). TWO PORTFOLIO MOVES SINCE THIS BASE, AND THEY ROUGHLY CANCEL ON REVENUE: (1) ENTRUST Solutions (~$2.4B, closed 2026-03-27) is NOT in this base; the 10-Q pro forma puts it at ~$274M per half-year (H1 2025 pro forma $8,772M vs reported $8,498M), i.e. ~$550-560M a year, and it booked $141M in Q2 2026. (2) The Security Enterprise Solutions (SES) business IS in this base and LEFT on 2026-10-05 into the Analogic joint venture (Leidos keeps 41.5%); Leidos put SES at '$625 million in projected 2026 revenue'. Both are handled in the forecast, not by restating the base. CROSS-CHECK: H1 2026 revenue $8,958M, +5.4% on H1 2025 ($8,498M), of which organic growth in Q2 was 4%. |
| Base EBIT margin | 12.3% | Leidos FY2025 10-K (accession 0001336920-26-000030): us-gaap:OperatingIncomeLoss $2,109M / revenue $17,174M = 12.28%, GAAP, as reported. It is AFTER $130M of acquired-intangible amortization, $18M of acquisition/integration/restructuring costs and $5M of impairments, and INCLUDES $32M of equity earnings of non-consolidated subsidiaries (Leidos reports these inside operating income). THIS BASE IS A PEAK FOR THE HEALTH BUSINESS AND THE FORECAST STEPS DOWN FROM IT DELIBERATELY: the old Health & Civil segment earned 23.7% in FY2025, lifted by 'a net increase in write-ups ... within the managed health services business'. In 2026 the VA added a fourth medical-disability-exam vendor and suspended incentive payments for all vendors for the rest of the year, and management guides the new Health segment to ~20% non-GAAP margin in H2 2026 (from 25.0% in H1 2025). CROSS-CHECK: H1 2026 GAAP operating margin 11.4% ($1,022M / $8,958M), including $64M of acquisition/restructuring costs (mostly Entrust and the NorthStar 2030 realignment) and $70M of amortization; adjusted EBITDA margin 13.9% vs FY2026 guidance of 'mid 13%'. |
| Forecast revenue growth | 6% → 3% → 2% → 4% → 4% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; shared by every researched model in this tracker. |
| Beta | 0.72 | Assumption — yfinance published beta (5Y monthly) 0.59, Blume-adjusted: Published 5Y-monthly beta is 0.59. Peers read the same or lower on the same feed (CACI 0.59, PSN 0.71, KBR 0.47, BAH 0.37, SAIC 0.31), so the low number is a property of the sector, not a data error. NORMALIZED UP to 0.72 with the standard Blume adjustment (0.67 x 0.59 + 0.33 = 0.725), which raises the discount rate and LOWERS the value. Reason: a beta of 0.59 measures how little Leidos co-moves with the market, but this stock fell from ~$158 in April to ~$103 in July and is down ~34% year to date on a single customer decision (the VA's exam program) — the risk that matters here is concentration in one budget, which a 60-point monthly regression does not see. Using the published 0.59 instead adds roughly $22/share (engine: $214.53); this is a judgement and it is stated. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. Reasonable for a contractor whose revenue tracks US national-security and civil budgets: Leidos grew from $13.7B (FY2021) to $17.2B (FY2025), ~5.7% a year including acquisitions. Must remain < WACC of ~7.66%. |
| Diluted shares | 126M | Leidos Q2 2026 10-Q (accession 0001336920-26-000246, filed 2026-08-04): Q2 2026 weighted-average diluted shares 126M (Leidos reports in whole millions; H1 2026 was 127M, FY2025 130M). The count is FALLING: 143M (FY2021) to 126M, from steady buybacks ($315M in H1 2026; the 2022 authorization was exhausted in Q2 and a new one is in place). 125,492,013 shares were outstanding at 2026-07-03. No credit is given for future buybacks. |
| Market price | $135.76 | Delayed quote · as of 2026-11-10 04:57 UTC |
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