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Leidos - AI Stock Analysis

Analysis generated October 27, 2024

Leidos Holdings, Inc. (Leidos) is a leading provider of scientific, engineering, systems integration, and technical services. Operating primarily in the defense, aviation, information technology, and biomedical research sectors, Leidos is headquartered in Reston, Virginia. The company boasts a robust portfolio of contracts with government and private entities, offering solutions ranging from IT modernization to cybersecurity. Leidos is known for its innovative approaches, offering a competitive edge in the market.

Fundamental Analysis

Leidos reported revenue of $3.98 billion for the last quarter. Though this represents a slight decrease of 0.13% compared to the previous quarter, it shows a notable year-over-year growth of 7.46%. This indicates that while short-term headwinds may exist, the company is still experiencing positive long-term growth.

Net income for the last quarter stood at $284 million, marking a substantial increase of 24.02% compared to the previous quarter and an impressive 75.31% when compared to the same quarter last year. This significant increase in profitability is a positive indicator of the company's operational efficiency and financial health.

The company's EBITDA for the last quarter was $452 million, reflecting a 5.61% increase from the previous quarter and a 42.59% rise year-over-year. This steady increase in EBITDA signifies strong operating performance.

However, the current Price-to-Earnings (P/E) ratio of 52.89 may be considered high, potentially indicating that the stock is overvalued. Investors should take this into account when considering the company's future growth potential.

Technical Analysis

The current stock price of Leidos stands at $168.71, marking a 5.63% increase compared to a month ago, which indicates a positive short-term trend. Over the past year, the stock has appreciated by 88.61%, suggesting a robust long-term bullish trend.

The current Simple Moving Average (SMA10) is 168.90, which is marginally higher than the previous SMA10 of 168.87. This slight increase indicates a potential upward trend in price movement.

The Relative Strength Index (RSI) is currently at 90, which typically indicates an overbought condition. This could suggest that the stock might face some downward pressure in the near term as investors might see it as overvalued and take profits.

Alternative Data Analysis

Leidos has 2,191 open job positions, showing a stable hiring trend which is generally a positive sign of the company’s stability and growth potential. Employee sentiment towards business outlook is neutral, which might indicate neither strong optimism nor pessimism within the company.

The company's website had an estimated 920,000 visitors, but this figure has decreased by 13% in the last couple of months. This worrisome trend may indicate a potential loss in customer engagement and interest.

On social media, Leidos has 7,100 followers on Instagram, with a 4% increase in the last few months, indicating growing interest from the community. Meanwhile, the Twitter page holds steady with 17,000 followers.

The AltIndex AI score, which aggregates various analytical parameters, gives Leidos a score of 66. This score signals a "buy", synthesizing fundamental, technical, and alternative data to render an investment recommendation.

Conclusion and Recommendation

Leidos demonstrates strong fundamentals with significant year-over-year increases in revenue, net income, and EBITDA. Despite a minor quarter-over-quarter decline in revenue, the company's profitability metrics show robust growth. The high P/E ratio and RSI indicate potential overvaluation and an overbought condition, which could pose near-term risks.

Considering the positive trends in price movement, coupled with stable hiring and rising social media engagement, the outlook remains optimistic. However, the decline in web traffic and neutral employee sentiment warrant careful monitoring.

Based on a comprehensive analysis including fundamental, technical, and alternative data, Leidos currently cements itself as a promising investment. Given its AI score of 66, I would recommend a cautious "buy," with the advisement to keep an eye on valuation metrics and any significant changes in alternative data indicators.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.