If you’ve been watching the defense sector lately, you know things are getting weird. Usually, these big contractors move like glaciers—slow, predictable, and frankly, a bit boring. But Leidos Holdings stock price has been doing something different. As of mid-January 2026, the ticker LDOS is hovering around $191.62, coming off a wild ride where it touched a 52-week high of $205.77.
Honestly, if you bought in a year ago when it was languishing near $123, you’re probably feeling like a genius right now. But for the rest of us looking at the current charts, the question is whether we missed the boat or if the "NorthStar 2030" strategy is just starting to kick into high gear.
What is Driving the Leidos Holdings Stock Price Right Now?
Investors aren't just throwing darts at a board. There’s a specific reason Leidos is outperforming some of its more "famous" peers like Lockheed or Raytheon. It comes down to one word: Backlog.
By the end of 2025, Leidos was sitting on a mountain of promises. We’re talking about a total backlog of roughly $47.7 billion. That is not a typo. To put that in perspective, their annual revenue is around $17 billion. They basically have nearly three years of work already lined up and waiting.
A huge chunk of this—about $9.1 billion—is already "funded," meaning the government has already set the cash aside. When the market sees that kind of "guaranteed" future revenue, it tends to get a little aggressive with the buy button.
The "Gemini for Government" Factor
You can't talk about tech in 2026 without mentioning AI. But Leidos isn't just using AI to write emails. They’ve integrated Google Cloud’s Gemini for Government into their workflow. They’re using it for everything from baggage screening at airports to predicting when a tank’s engine is going to fail before it actually happens.
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This isn't just cool tech; it's a margin play. Traditionally, defense contracting is a low-margin business. You build a widget, you get a small percentage of profit. But Leidos is shifting toward fixed-price, outcome-based contracts.
If they use AI to do the job faster and cheaper than they bid, they keep the difference. That’s why we saw their non-GAAP diluted EPS hit over $10.00 last year. Analysts are actually forecasting that EPS could grow by about 6.6% annually over the next few years.
The Numbers Nobody Is Looking At (But Should)
Most retail investors just look at the price graph and the P/E ratio. If you do that, Leidos looks "fine." Its P/E is around 18. That’s not cheap, but it’s not NVIDIA-level crazy either.
However, look at the Return on Equity (ROE). It’s forecast to be around 27.4% within the next three years. That is significantly higher than the industry average of about 21%. Basically, Leidos is much better at turning your invested dollar into profit than most of its competitors.
Dividend Growth: The Quiet Hero
Leidos isn't exactly a "dividend aristocrat" yet, but they’ve been getting aggressive. In late 2025, they bumped the quarterly dividend up to $0.43 per share.
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It’s a 7.5% increase. It’s a signal.
When a board of directors raises a dividend by that much while also spending hundreds of millions on share buybacks—specifically $406 million in the final quarter of 2025—it means they think the stock is still undervalued. Or at the very least, they have so much cash they don't know what else to do with it.
The Risks: It’s Not All Rocket Ships and Profits
I’d be lying if I said this was a risk-free bet. There are two major things that keep LDOS investors up at night:
- The Government Shutdown Hangover: We saw some volatility in late 2025 because of federal budget drama. Leidos gets the vast majority of its money from the U.S. government. If the debt ceiling or budget battles get ugly, the stock price usually takes a 5% to 10% haircut in a week.
- The "Lumpy" Contract Problem: Sometimes they win a $1.3 billion Intelligence Community contract (which they did recently), and the stock jumps. But if they lose a major "recompete"—where they have to bid to keep a job they already have—the market punishes them twice as hard.
Is the Current Price a Fair Entry Point?
Right now, the average analyst price target is sitting around $218.64. If you believe those guys, there’s about an 11% to 14% upside from where we are today.
But check out the range. Some analysts have it as low as $178, while others are screaming $235. That’s a huge gap. It tells you that the market is still debating whether Leidos is a "services company" (low multiple) or a "technology company" (high multiple).
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What You Should Actually Do Now
If you’re holding, honestly, there isn't much reason to sell unless you need the cash. The backlog alone provides a safety net that most tech companies would kill for.
If you're looking to buy, you might want to wait for a "red day." Historically, LDOS has a weird habit of dropping a few percentage points right after good news is announced—sort of a "buy the rumor, sell the news" situation. For example, when they announced their new CTO Ted Tanner (an AI heavyweight) back in December, the stock actually dipped.
Here is the game plan:
- Watch the $185 level: This has acted as a support floor recently. If it dips there, it's a much more attractive entry.
- Check the Feb 17 Earnings Call: This is the big one. They’ll be announcing the full-year 2025 results. If they raise the 2026 guidance, the $200 ceiling will probably vanish.
- Focus on the "Health" segment: Everyone watches the defense stuff, but Leidos’ work with the VA and NASA (like that $760 million astronaut health contract) is where the real margin growth is happening.
The bottom line is that Leidos is no longer just "the company that runs the scanners at the airport." They are becoming a massive software-and-AI engine for the Department of Defense. If you think the world is getting more stable, don't buy this stock. But if you think global tensions and technological warfare are the "new normal," the Leidos Holdings stock price might still have plenty of room to run.