LDOS
Leidos Holdings, Inc.
Technology · Information Technology Services · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Strong bottom-line acceleration, with net income up +15.5% and EPS up +20.8%, and a high dividend score driven by consistent per-share growth and a 14.6% payout ratio, anchor the composite score.
- Solid profitability metrics including a 12.3% operating margin and 10.7% return on assets in FY2026 contributed positively to the overall assessment.
- The theme factor contributed zero points under the current model methodology, and modest top-line growth of +3.2% and a Q4 momentum pullback tempered the total score to 60.8/100.
Why Not Higher
- Top-line revenue growth of only +3.2% from FY2025 to FY2026 and a clear deceleration across revenue, operating income, and net income in 2026Q4 prevented a higher momentum and growth score.
- The theme assignment to Defense Spending did not translate into any model score points, and a net margin of 8.5% versus a 12.3% operating margin highlights persistent below-the-line cost drag.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2025's $16,576,000,000 to FY2026's $17,107,000,000, a gain of +3.2%, while net income rose +15.5% over the same period and diluted EPS expanded +20.8% from FY2025 to FY2026.
The model rewarded the strong bottom-line and per-share acceleration, but the modest top-line growth of +3.2% from FY2025 to FY2026 likely tempered the overall score, placing it in the middle of the range.
In FY2026, Leidos posted a net margin of 8.5%, an operating margin of 12.3%, and a return on assets of 10.7%, reflecting solid earnings conversion and asset efficiency.
The model rewarded the double-digit operating margin and the above-average return on assets in FY2026, though the net margin of 8.5% suggests meaningful below-the-line costs that kept the score from reaching the top tier.
Filing evidence currently available does not support a more specific explanation for this factor.
Quarterly revenue rose from $4,228,000,000 in 2026Q1 to a peak of $4,449,000,000 in 2026Q3 before pulling back to $4,197,000,000 in 2026Q4; operating income followed a similar arc, peaking at $571,000,000 in 2026Q2 and declining to $473,000,000 in 2026Q4, while net income ranged from $363,000,000 in 2026Q1 to $327,000,000 in 2026Q4.
The model recognized a mid-year surge in both revenue and profitability metrics, but the deceleration in 2026Q4 across all three measures likely prevented a higher score, reflecting a pattern of partial rather than sustained acceleration.
Leidos maintained a low dividend payout ratio of 14.6% in FY2026, and dividends per share have grown steadily from $1.44 in FY2022 to $1.46 in FY2023, $1.54 in FY2025, and $1.63 in FY2026.
The model rewarded the consistent multi-year dividend growth trend alongside a conservative payout ratio in FY2026, which signals both commitment to returning capital and ample retained earnings to sustain future increases.
Leidos is assigned to the Defense Spending macro theme.
Although the Defense Spending theme is assigned, this assignment did not translate into a score under the model's current methodology; the theme classification reflects the company's business alignment, not a scoring outcome.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Leidos Holdings delivered modest top-line growth of +3.2% from FY2025 to FY2026, but bottom-line performance was considerably stronger, with net income rising +15.5% and diluted EPS expanding +20.8% over the same period. Profitability metrics in FY2026 were solid, including a 12.3% operating margin and a 10.7% return on assets, though a net margin of 8.5% points to meaningful below-the-line costs. Quarterly momentum showed a mid-year surge peaking in 2026Q3 before a notable pullback in 2026Q4 across revenue, operating income, and net income. The dividend profile is a relative bright spot, with per-share dividends growing steadily from $1.44 in FY2022 to $1.63 in FY2026 at a conservative 14.6% payout ratio.
Plain English
Leidos is a defense-aligned company that grew its profits much faster than its sales last year, pays a steadily rising dividend it can easily afford, but saw its quarterly results cool off toward the end of the fiscal year, which keeps it from being a top-tier pick.
Bull Case vs. Bear Case
Bull Case
- Net income surged +15.5% and diluted EPS jumped +20.8% from FY2025 to FY2026, showing that Leidos is converting revenue into shareholder value at an accelerating pace.
- A 12.3% operating margin and 10.7% return on assets in FY2026 demonstrate solid operational efficiency and effective use of the company's asset base.
- Dividends per share have grown every measured year from $1.44 in FY2022 to $1.63 in FY2026, supported by a very low 14.6% payout ratio that leaves ample room for continued increases.
Bear Case
- Revenue growth was only +3.2% from FY2025 to FY2026, suggesting limited top-line expansion that could constrain future earnings growth if margin improvement slows.
- Quarterly results deteriorated in 2026Q4, with revenue falling to $4,197,000,000, operating income dropping to $473,000,000, and net income declining to $327,000,000 from mid-year peaks, signaling a loss of near-term momentum.
- A net margin of 8.5% in FY2026, despite a strong operating margin of 12.3%, indicates meaningful below-the-line costs that compress ultimate profitability.
What Could Change the Picture
Bullish Triggers
- A sustained reacceleration in quarterly revenue and operating income beyond the 2026Q3 peak levels would signal that the Q4 pullback was temporary rather than a trend reversal.
- Continued double-digit EPS growth alongside further dividend increases would reinforce the thesis that Leidos is compounding shareholder value efficiently.
Bearish Triggers
- If the Q4 deceleration in revenue and operating income deepens into subsequent quarters, it would undermine the mid-year momentum narrative and raise concerns about the durability of earnings growth.
- A meaningful rise in below-the-line costs that further compresses the net margin below 8.5% would suggest the gap between operating and net profitability is widening in an unfavorable direction.
Risk Profile
High RiskThe Q4 2026 pullback — with revenue declining to $4,197,000,000, operating income falling to $473,000,000, and net income dropping to $327,000,000 from mid-year peaks — introduces uncertainty about near-term trajectory. While specific financial health details from filings are limited in available evidence, the overall High risk rating reflects the combination of this momentum deceleration and the structural gap between operating and net margins.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.