Defense contractor Leidos (NYSE:LDOS) will be reporting results tomorrow before market hours. Here’s what to expect.
Leidos beat analysts’ revenue expectations by 2.9% last quarter, reporting revenues of $4.19 billion, up 6.9% year on year. It was a stunning quarter for the company, with an impressive beat of analysts’ backlog estimates and a solid beat of analysts’ EPS estimates.
Is Leidos a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Leidos’s revenue to grow 3.8% year on year to $4.13 billion, slowing from the 7.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.27 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Leidos has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 2.9% on average.
Looking at Leidos’s peers in the defense contractors segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Mercury Systems delivered year-on-year revenue growth of 13%, beating analysts’ expectations by 23.9%, and CACI reported revenues up 14.5%, topping estimates by 3.4%. Mercury Systems traded up 18.3% following the results while CACI was down 9.3%.
Read our full analysis of Mercury Systems’s results here and CACI’s results here.
There has been positive sentiment among investors in the defense contractors segment, with share prices up 2.6% on average over the last month. Leidos is down 6.3% during the same time and is heading into earnings with an average analyst price target of $184.38 (compared to the current share price of $142.27).
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
