Reston, Virginia-based Leidos Holdings, Inc. (LDOS) provides services and solutions in the defense, intelligence, engineering, civil, and health markets. With a market cap of $21.2 billion, the company provides scientific, engineering, systems integration, and technical services and solutions. The global science and technology leader is expected to announce its fiscal second-quarter earnings for 2025 before the market opens on Tuesday, Aug. 5. 

Ahead of the event, analysts expect LDOS to report a profit of $2.63 per share on a diluted basis, unchanged from the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in its last four quarterly reports. 

For the full year, analysts expect LDOS to report EPS of $10.75, up 5.3% from $10.21 in fiscal 2024. Its EPS is expected to rise 6.6% year over year to $11.46 in fiscal 2026. 

LDOS stock has slightly underperformed the S&P 500 Index’s ($SPX) 11.7% gains over the past 52 weeks, with shares up 11.4% during this period. However, it outperformed the Technology Select Sector SPDR Fund’s (XLK) 9.3% gains over the same time frame.

Despite strong demand and long-term growth prospects, Leidos continues to face challenges with its supply chain and labor shortages. Global shortages of critical materials, like semiconductors and rare earth elements, are impacting production and delivery of defense systems. Dependence on key suppliers, geopolitical tensions, and rising raw material costs are further straining operations. Labor shortages, with a 13% attrition rate in the aerospace-defense sector, are also impacting production timelines and quality control. These factors may limit Leidos' operational efficiency and profitability in the near term.

On May 6, LDOS shares closed up more than 4% after reporting its Q1 results. Its adjusted EPS of $2.97 surpassed Wall Street expectations of $2.47. The company’s revenue was $4.2 billion, exceeding Wall Street forecasts of $4.1 billion. LDOS expects full-year adjusted EPS in the range of $10.35 to $10.75, and expects revenue in the range of $16.9 billion to $17.3 billion.

Analysts’ consensus opinion on LDOS stock is reasonably bullish, with a “Moderate Buy” rating overall. Out of 16 analysts covering the stock, nine advise a “Strong Buy” rating, and seven give a “Hold.” LDOS’ average analyst price target is $174.06, indicating a potential upside of 7.4% from the current levels.