Leidos Holdings , Inc. (NYSE:LDOS), a company specializing in national security and health solutions, has secured an $86.4 million contract from the National Geospatial-Intelligence Agency (NGA) for lifecycle management of analytics systems. The contract, known as Chinook, is an indefinite delivery, indefinite quantity (IDIQ) agreement with a potential five-year duration if all task orders are executed.
The contract tasks Leidos with providing a range of services including software development, systems engineering, integration, and operations and sustainment. The systems under Chinook encompass various tools such as the Commercial-Joint Mapping Tool Kit, Target Coordinate Mensuration Validation, Advanced Analyst Augmentation Analytical Cloud Enablement System, and the Tearline open-source intelligence system. Leidos plans to apply DevSecOps software development practices and Zero Trust cybersecurity methodologies to maintain and enhance these systems.
Roy Stevens, President of Leidos National Security Sector, emphasized the importance of these tools for geospatial intelligence analysts and the company's commitment to supporting NGA's mission.
Leidos, a Fortune 500® company, employs approximately 48,000 people worldwide and focuses on creating technology solutions for heavily regulated industries. The company reported annual revenues of around $15.4 billion for the fiscal year ending December 29, 2023. The contract with NGA is expected to contribute to Leidos's continued involvement in national security services.
Leidos reported a record quarter with a 7.7% year-over-year increase in revenue, reaching $4.13 billion. Adjusted EBITDA also saw a substantial rise, hitting $559 million, a 33% increase from the previous year. Following these robust results, Leidos raised its full-year guidance. The company's Health & Civil revenues saw a notable increase of 22%, while National Security and Digital revenues grew by 1%.
In addition to strong financial performance, Leidos secured a $191 million contract to provide the U.S. Army with integrated lifecycle software and management solutions. This contract, awarded by the Army Contracting Command, will support over seven mission software systems critical for the Army's precision and long-range countermeasures. These recent developments underline the company's ongoing success and strategic focus. The company's revenue guidance for 2024 has been raised to a range of $16.1 billion to $16.4 billion, with adjusted EBITDA expected to be around 12%.
InvestingPro Insights
As Leidos Holdings, Inc. (NYSE:LDOS) secures a significant contract with the National Geospatial-Intelligence Agency, investors and industry observers are keenly watching the company's financial metrics and market performance. According to InvestingPro data, Leidos has a market capitalization of $19.51 billion, reflecting its substantial presence in the technology solutions sector for regulated industries. The company's commitment to innovation and cybersecurity is underscored by its application of DevSecOps and Zero Trust methodologies, aligning with its role as a prominent player in the Professional Services industry.
InvestingPro Tips suggest that Leidos has a history of financial stability and growth potential. The company has raised its dividend for 5 consecutive years and has maintained dividend payments for 13 consecutive years, indicative of its consistent performance and shareholder value creation. Furthermore, analysts predict that the company will remain profitable this year, which could contribute positively to investor confidence as Leidos continues to expand its national security services portfolio.
InvestingPro data also highlights that Leidos trades at a high earnings multiple, with a P/E ratio of 44.94, and a forward P/E ratio for the last twelve months as of Q2 2024 at 20.52. While some analysts have revised their earnings expectations downwards for the upcoming period, the company's stock generally trades with low price volatility, which may appeal to investors looking for stable investments in the technology sector.
For those interested in further insights, InvestingPro offers additional tips on Leidos Holdings, Inc., which can be found at https://www.investing.com/pro/LDOS. These tips provide in-depth analysis and could serve as a valuable resource for investors seeking to make informed decisions.
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