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Leidos Holdings, Inc. (LDOS) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Leidos Holdings, Inc. (LDOS)

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Intrinsic Value (DCF)

Current$195.96
→
Intrinsic$187.61
-4%
$117.85$187.61$320.13
Market implies 16% growth for 5 years
LDOS appears fairly valued — current price aligns with our DCF estimate.
At $196, the market prices in continued high-teens cash flow growth (16%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $118 → Bull $320. Current price implies expectations near the base case.
Discount ↓Growth →11%13%15%17%
8%$233$256$280$306
10%$155$171$188$206
12%$112$124$136$150
14%$85$94$104$114

Bull Case

  • Bull case ($320) offers 63% upside at 18% growth, 9% discount
  • Conservative 15% growth assumption is achievable based on track record

Bear Case

  • Bear case ($118) implies 40% downside at 12% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$1.43B
Year 2$1.64B
Year 3$1.89B
Year 4$2.17B
Year 5$2.49B
Terminal$36.66B

📐 Model Inputs

Growth Rate14.9%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.24BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is LDOS stock undervalued or overvalued?
🟡 FAIRLY VALUED

LDOS trades at $195.96, within 10% of our $187.61 intrinsic value estimate. At 10.0% WACC and 14.9% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $117.95 (bear) to $286.43 (bull).

What is LDOS's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.24B, projected at 14.9% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $4.35B net debt and dividing by 0.14B shares: Bear $117.95 | Base $187.61 | Bull $286.43. Current price $195.96 implies -5% to base case.

How is LDOS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 14.9% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($29.86B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 24.0x.