GET DAILY SIGNALSWhy Is Leidos Holdings (LDOS) Stock Down -5.36% Today?
Key Takeaways
- Shares of LDOS fell 5.36% on Tuesday, trading near $136.43 versus a prior close of $144.16.
- The primary catalyst was third-quarter revenue that missed consensus estimates, alongside a lowered full-year revenue outlook.
- The company beat on adjusted earnings per share ($3.62 vs. $3.04 expected) and raised EPS guidance, but investors focused on slowing top-line momentum.
- Weakness in the Health segment (revenue down 12%) and near-flat organic growth of just 0.6% compounded the sell-off.
- The move extended a challenging 2026 for the stock, which has underperformed the broader market significantly year to date.
- Traders are watching next for commentary on the Health segment restructuring, cash-flow recovery, and contract conversion from a nearly $50 billion backlog.
- For deeper analysis, explore Price Targets, Earnings, and Forecast pages on Tickeron.
- Discover the top-performing automated strategies for this and other tickers through Trending AI Robots.
Opening Summary
Leidos Holdings, Inc. (LDOS), a Reston, Virginia-based defense, technology, engineering, and health-services contractor, saw its shares slide sharply on Tuesday following the release of its third-quarter 2026 results. The stock traded down 5.36% to approximately $136.43, retreating from Monday's close of $144.16. The decline was driven by a revenue shortfall and a reduction in the company's full-year sales guidance, which outweighed an otherwise strong earnings beat and an upward revision to its profit outlook.
Earnings Results and Guidance
The market reaction centered on Leidos' top-line performance. Third-quarter revenue rose 3.6% year over year to $4.63 billion, but fell short of Wall Street's consensus estimate of roughly $4.73 billion. More consequential for sentiment was the company's decision to lower its full-year 2026 revenue guidance to a range of $18.0 billion to $18.2 billion, down from a prior range of $18.2 billion to $18.4 billion. The new midpoint of roughly $18.1 billion sits below analyst expectations, signaling slower growth than investors had anticipated.
On profitability, the picture was brighter. Adjusted earnings per share came in at $3.62, well above the $3.04 consensus and up 19% from $3.05 a year earlier, helped by improved program execution, cost controls, and a lower effective tax rate. Management also raised its full-year adjusted EPS guidance to a range of $12.50 to $12.70 from $12.20 to $12.50. Despite this, the revenue revision dominated the narrative, as investors tend to discount profit beats that are not backed by durable sales momentum.
Segment Weakness and Slowing Organic Growth
A key drag was the company's Health segment, where revenue declined 12% to $1.07 billion amid reduced volumes and program changes in managed healthcare services, and where operating income fell sharply. This offset strength elsewhere in the portfolio: the Homeland segment jumped 32% to $1.02 billion, boosted by air traffic management and electric-power distribution engineering work, while Defense revenue rose 3% and Intelligence & Digital grew 1%.
Analysts also flagged a concerning signal in the quality of growth. While total backlog climbed 4% to a record $49.6 billion and the book-to-bill ratio reached 1.2, organic revenue increased only 0.6% during the quarter, suggesting that acquisitions accounted for much of the reported sales growth. A decline in free cash flow to $476 million from $680 million a year earlier added to the cautious tone.
Market Context and Trading Activity
The decline in LDOS reflects a company-specific reaction to its earnings report rather than broad sector momentum. Government-services and defense-technology names have faced scrutiny over their ability to convert record backlogs into faster revenue growth, and Leidos' results reinforced those concerns. The move also extended a difficult year for the stock, which had already fallen roughly 20% in 2026 through Monday's close, contrasting with solid gains in the broader equity market. Trading volume was elevated as investors repriced the shares following the pre-market earnings announcement.
What Comes Next for LDOS
Investors will be watching whether Leidos can stabilize its Health segment and reaccelerate organic growth in the coming quarters. Key areas of focus include the restructuring of the managed healthcare portfolio, the pace of contract awards and backlog conversion, and any recovery in free cash flow generation. The company's raised EPS guidance and disciplined cost management provide a counterbalance, but the path forward will hinge on demonstrating that revenue can grow without relying on acquisitions. Macro conditions, federal budget priorities, and defense-technology spending trends remain important external factors that could influence the stock's trajectory.
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Financial writer and active order flow futures trader with a focus on fundamental analysis, macroeconomic factors, and equity research. I make in-depth blogs on stocks and ETFs, bridging the gap between raw market data and real-world trading decisions.
LDOS in upward trend: price rose above 50-day moving average on October 22, 2026
LDOS moved above its 50-day moving average on October 22, 2026 date and that indicates a change from a downward trend to an upward trend. In 24 of 30 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are 80%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 15, 2026. You may want to consider a long position or call options on LDOS as a result. In 43 of 70 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 61%.
The Moving Average Convergence Divergence (MACD) for LDOS just turned positive on October 12, 2026. Looking at past instances where LDOS's MACD turned positive, the stock continued to rise in 27 of 42 cases over the following month. The odds of a continued upward trend are 64%.
The 10-day moving average for LDOS crossed bullishly above the 50-day moving average on October 27, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 8 of 14 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 57%.
Following a +2.23% 3-day Advance, the price is estimated to grow further. Considering data from situations where LDOS advanced for three days, in 216 of 330 cases, the price rose further within the following month. The odds of a continued upward trend are 65%.
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 7 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 12 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where LDOS declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 56%.
LDOS broke above its upper Bollinger Band on October 26, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for LDOS entered a downward trend on October 16, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 35 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 43 (best 1 - 100 worst), indicating steady price growth. LDOS’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 62 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.424) is normal, around the industry mean (2.802). P/E Ratio (13.250) is within average values for comparable stocks, (18.164). Projected Growth (PEG Ratio) (0.970) is also within normal values, averaging (2.284). Dividend Yield (0.012) settles around the average of (0.195) among similar stocks. P/S Ratio (0.943) is also within normal values, averaging (139.965).
The Tickeron Profit vs. Risk Rating rating for this company is 64 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 93, placing this stock slightly better than average.
The Tickeron PE Growth Rating for this company is 77 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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