I’ve been looking at Leidos (LDOS) and think it might be an interesting value play.
Leidos is a government IT / defense / cyber contractor. Not exciting, but the business is tied to DoD, intelligence agencies, civil government, aviation, and health programs.
Current snapshot:
* Price: **\~$108.67**
* Market cap: **\~$14.4B**
* TTM P/E: **\~10.8x**
* EV/EBITDA: **\~9.3x**
* ROE: **\~29%**
* ROIC: **\~12.8%**
TTM free cash flow is around **$1.86B**, which means the stock is trading at roughly **7.7x TTM FCF**.
Analyst estimates show revenue moving from about **$18.23B in 2027** to **$20.02B by 2029**, with EPS going from **$12.33** to **$14.51** over that period. So this is not a hyper-growth story, but it does look like a stable cash-flow compounder.
My take: LDOS is not going to get software multiples, and it shouldn’t. Debt is a real consideration, government contracting can be lumpy, and margins are capped. But at \~11x TTM earnings and under 8x TTM FCF by my rough math, the market seems to be pricing this like a no-growth contractor, while the cash flow and backlog suggest something better.
See my [dcf analysis](https://intrinsicalpha.com/stocks/nyse/ldos/information-technology-services/leidos-holdings-inc-intrinsic-value/dcf/MIYF0Kcp9w)