Buffett Brain · Research note
Score updated 5 Oct 2026 · analysis from 13 Jul 2026
LDOS· Technology
Leidos Holdings
Leidos Holdings operates in a complex market with moderate growth and weak margins, raising questions about its long-term durability and moat strength.
Buffett fit
Weak fit
Owner
17
Durability
61
Management
54
Price
96
Score updated 5 Oct 2026 · analysis from 13 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of Leidos, I'd focus on improving margins and expanding the Defense Solutions segment, which is critical for revenue growth.
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Leidos has been profitable for the last five years, but the maximum EPS decline of 71% indicates vulnerability to market changes.
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Management has reduced the share count by 1.56% over the last five years, indicating a commitment to returning value to shareholders.
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The current of 10.9 and yield of 10.51% suggest the stock is reasonably valued.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 15-year EPS CAGR of 20.4% indicates strong earnings growth potential.
- 2 growth of 30.73% YoY demonstrates good cash generation.
- 3Interest coverage ratio of 10.0 suggests strong ability to meet debt obligations.
- 4Share count has decreased by 1.56% over the last five years, showing commitment to shareholder returns.
Concerns
5- 1 of 17.5% is significantly below the sector top-quintile cutoff of 61%.
- 2 of 12.8% is below the sector's top-quintile cutoff of 13.4%, indicating weak capital efficiency.
- 3Net debt/EBITDA of 2.77 suggests potential concerns in a downturn.
- 4The maximum EPS decline of 71% raises red flags about durability during economic stress.
Price history
$118+19.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Leidos generates revenue primarily from defense and intelligence services, with $17.17B in TTM revenue. The Defense Solutions segment is a major contributor, providing critical systems to government clients. Despite a diverse offering, the of 17.5% suggests limited in a competitive environment.
What other investors would say
The same company, judged by three other documented playbooks.
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