Leidos Holdings (LDOS) has moved into focus after securing a US$2.7b U.S. Army contract for hypersonic weapons and an agreement to deliver 3,000 Low Cost Containerized Munitions, highlighting its role in U.S. defense modernization.

Despite the hypersonic weapons award and new munitions framework agreement, Leidos Holdings' share price has come under pressure, with the 30 day share price return down 22.23% and the year to date share price return down 32.58%. At the same time, the 3 year total shareholder return of 63.37% indicates much stronger longer term performance, suggesting recent momentum has faded even as long term holders remain ahead.

If you are looking beyond defense contracts and want to see what else is moving in markets tied to national security and infrastructure, this could be a good moment to review 38 power grid technology and infrastructure stocks

With Leidos trading well below both analyst targets and one estimate of intrinsic value, yet facing weaker recent returns and mixed sentiment, are you looking at a genuine discount or a stock where future growth is already priced in?

Most Popular Narrative: 37.9% Undervalued

Against a last close of $123.69, the most followed narrative puts Leidos Holdings’ fair value around $199, which frames the recent share price slide in a very different light.

Leidos is positioned to benefit from increased, multi-year government funding focused on national security, defense modernization, border protection, and infrastructure, particularly through the One Big Beautiful Bill and related initiatives (e.g., FAA air traffic modernization, Golden Dome, maritime autonomy), which are expected to drive robust future revenue growth across core projects.

Curious what sits behind that valuation gap? The narrative leans heavily on steady contract wins, firm margin assumptions, and a future earnings multiple that is anything but cautious.

Result: Fair Value of $199.21 (UNDERVALUED)

However, the story can change quickly if U.S. federal spending priorities shift, or if acquisitions and integrations like Dynetics and Kudu do not deliver as expected.

Next Steps

With sentiment clearly split between concern and optimism, this is a good time to look through the data yourself and decide how the risk reward trade off really stacks up. Start with 5 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.