DCF Studio

    LDOS · NYQ · Technology

    Leidos Holdings, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 219.73

    Market price

    USD 144.16

    Implied upside

    +52.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedReported capital expenditure averages just 0.96% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 219.73+52.4%
    Exit multiple
    USD 169.08+17.3%
    Market price
    USD 144.16

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 18.3bnUSD 19.1bnUSD 19.8bnUSD 20.5bnUSD 21.2bnUSD 21.9bnUSD 22.6bnUSD 23.2bnUSD 23.9bnUSD 24.5bn+3.3%
    EBITUSD 1.8bnUSD 1.9bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.4bn+3.3%
    NOPATUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 1.9bn+3.3%
    Add depreciation & amortisationUSD 361.1mUSD 375.6mUSD 390.0mUSD 404.3mUSD 418.2mUSD 431.9mUSD 445.2mUSD 458.0mUSD 470.3mUSD 482.1m+3.3%
    Less capital expenditureUSD -183.1mUSD -220.6mUSD -260.3mUSD -302.2mUSD -346.2mUSD -392.1mUSD -439.8mUSD -489.2mUSD -540.1mUSD -592.2m+13.9%
    Capex, % of revenue1.0%1.2%1.3%1.5%1.6%1.8%1.9%2.1%2.3%2.4%-
    Less increase in working capitalUSD -87.7mUSD -56.8mUSD -56.3mUSD -55.6mUSD -54.6mUSD -53.3mUSD -51.9mUSD -50.1mUSD -48.1mUSD -45.9m-6.9%
    Free cashflow to firmUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.7bn+1.6%
    Discount factor0.96670.90330.84410.78880.73710.68880.64370.60150.56210.5253-
    Present valueUSD 1.5bnUSD 1.4bnUSD 1.4bnUSD 1.3bnUSD 1.2bnUSD 1.2bnUSD 1.1bnUSD 1.0bnUSD 977.8mUSD 918.1m-
    Present Value Of The ForecastUSD 12.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.694Reported 0.544, pulled toward 1.0 (Blume)
    Cost of equity7.83%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 10.3x interest cover. Book interest / average debt was lower, at 3.9%.
    Market capitalisationUSD 18.1bn77.6% of capital
    Total debtUSD 5.2bn22.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.01%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 219.73

    63% of EV

    Forecast FCFF, final year
    USD 1.7bn
    Capex at depreciation, working capital in reinvestment
    USD 2.1bn
    Less reinvestment at g/ROIC (18.3% of NOPAT)
    USD -388.0m
    Capitalised
    USD 1.7bn
    ROIC (reported)
    13.7%
    Terminal value, undiscounted
    USD 39.4bn
    Terminal value, discounted
    USD 20.7bn
    Enterprise value
    USD 32.7bn
    Less net debt
    USD 4.1bn
    Equity value
    USD 28.6bn

    Exit at 9.3x EBITDA

    Value per shareUSD 169.08

    54% of EV

    Terminal value, undiscounted
    USD 26.9bn
    Terminal value, discounted
    USD 14.1bn
    Enterprise value
    USD 26.1bn
    Less net debt
    USD 4.1bn
    Equity value
    USD 22.0bn

    Spread between methods: 26%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.01%336.94367.60411.11477.03587.60
    6.01%256.11269.98288.24313.06348.36
    7.01%204.61211.27219.73230.65245.09
    8.01%168.93172.06176.00181.01187.42
    9.01%142.75144.00145.65147.78150.54

    Outlined: this model. Green text: above today's price of 144.16. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year6.1%3.6%-0.8%
    EBIT margin12.2%9.9%6.6%
    Discount rate-7.0%9.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.