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Leidos (LDOS) Wins a $738M Deal to Provide Cybersecurity Support

Leidos Holdings, Inc. LDOS recently clinched a contract to offer the U.S. Air Force enterprise information technology (IT) and telecommunications support, including cybersecurity.  The agreement is valued at $738 million.  

Per the terms of the contract, Leidos will provide cybersecurity, enterprise IT operations, IT asset management, program management and engineering services to all components of the Air Force in the national capital region, including the National Military Command Center.

What’s Favoring LDOS?

Amid escalating geopolitical tensions worldwide, cyber security threats have been posing as a major risk factor to a nation’s security. The necessity for secure and dependable networks to link fighters in the air and the operating base has become crucial as countries invest more in military cybersecurity.

Consequently, as defense sectors across the board are focusing more on making their data transmission more secure, defense contractors like Leidos are witnessing solid contract flows involving the strengthening of cybersecurity capabilities. The latest contract win is a bright example of that.

The growth potential of the Defense Cybersecurity industry is very strong due to the ever-changing and increasingly complex nature of cyberattacks. In light of this, the Mordor Intelligence firm projects that the global Defense Cybersecurity market will grow at a CAGR of 12.8% during the 2024-2029 period.

Such a solid market prediction offers strong growth opportunities to Leidos, which is a renowned provider of cybersecurity solutions to the federal government, boasting more than 30 years of experience in defending global cyber interests.

Leidos’ PACKIT (Proven, Analytic-Centric Kill Chain Implementation and Transformation) is a threat-based strategy for strengthening cyber security. This approach uses people, processes and technology to improve an organization's cybersecurity posture by using an analytical framework.

Peer Prospects

Apart from Leidos Holdings, other defense contractors that are expected to enjoy the perks of the growing defense cybersecurity market are as follows:

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Northrop Grumman NOC: It offers resilient, full-spectrum cyber solutions across every domain for a decisive advantage, giving cyber warfighters the defensive and offensive edge they need against evolving threats. Its products include the Cyberdefense Platform for Weapon Systems, which uses advanced AI/ML algorithms to detect threats in mission and weapon systems that are currently undetected by typical network-based IDS solutions.

Northrop has a long-term (three to five years) earnings growth rate of 8.7%. The Zacks Consensus Estimate for NOC’s 2024 sales suggests growth of 4.6% from the prior-year reported figure.

Lockheed Martin LMT: It remains a leading provider of defense technology in comprehensive cyber systems for its defense and global security customers. LMT’s MR2 platform allows cyber operators to get a full view of capability and skill levels across the entire workforce, removing the need to consult multiple systems and networks. It helps the U.S. military digitally transform with real-time reports on employee training and readiness.

Lockheed has a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for LMT’s 2024 sales implies growth of 3.2% from the prior-year reported figure.

BAE Systems BAESY: It designs and develops a range of cutting-edge cybersecurity technology. Its product range includes one-way transfer devices, guards and Field Programmable Gate Arrays, such as the Data Diode Solution, which allows for secure unidirectional data transport between networks.

BAESY has a long-term earnings growth rate of 12.2%. The Zacks Consensus Estimate for BAESY’s 2024 sales implies growth of 34.1% from the prior-year reported figure.

Price Movement

In the past three months, shares of Leidos have risen 12.7% against the industry’s decline of 5.1%.

Zacks Investment Research
Zacks Investment Research


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Zacks Rank

Leidos Holdings currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Northrop Grumman Corporation (NOC) : Free Stock Analysis Report

Bae Systems PLC (BAESY) : Free Stock Analysis Report

Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report

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