LDOS Should I Buy
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Leidos Holdings Inc (LDOS) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company shows solid financial performance with growth in net income, EPS, and gross margin, the technical indicators and analyst sentiment suggest limited upside in the near term. Additionally, the lack of strong positive catalysts and mixed news sentiment around the defense sector weigh against a buy recommendation.
The technical indicators are mixed to slightly bearish. The MACD is positive but contracting, RSI is neutral at 47.368, and moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot level of 174.856, with resistance at 179.815 and support at 169.898. This suggests limited momentum in either direction.
Hedge funds are significantly increasing their positions in LDOS, with a 348.79% increase in buying over the last quarter. The company has shown strong financial performance in Q4 2025, with net income up 15.14% YoY and EPS up 20.57% YoY.
Additionally, the news around Anthropic being designated as a supply chain risk could indirectly impact LDOS, given its ties to the defense sector.
In Q4 2025, Leidos reported a revenue decline of 3.62% YoY to $4.207 billion. However, net income increased by 15.14% YoY to $327 million, EPS grew by 20.57% YoY to 2.52, and gross margin improved by 10.64% to 17.57%. This indicates strong profitability despite a slight revenue decline.
Analyst sentiment is mixed. Jefferies, RBC Capital, and Citi maintain Buy or Outperform ratings with price targets ranging from $195 to $215, while Stifel and Baird have downgraded or maintained Neutral ratings, citing growth moderation concerns in key contracts. The average price target has been lowered, reflecting cautious optimism.
