NASDAQ · DRS

Leonardo DRS, Inc.

Industrials · Aerospace & Defense

$37.19▲ 0.35% ($0.13)at close

After hours$37.20▲ 0.04%7:30 PM ET

52-week

$32.43$50.59

What the market price implies · Reverse DCF

To support a price of $37.19, this model requires revenue to grow by 8.18%/yr over the next 10 years, compounded annually.

Historical revenue grew by 6.1%/yr over the past 4 years. The required annual growth rate is 2.08 percentage points higher.

Selected forecast · Base scenario

6.18%/yr · actual 10-year annualized revenue growth

Year 1 growth: 9.68%

Market-implied · Base operating assumptions + edited margins

8.18%/yr · flat 10-year annualized revenue growth

Reverse DCF solves revenue growth itself using Base operating assumptions and your edited margins. Changing forecast growth alone does not change the implied rate. This is a model-implied requirement, not an analyst forecast.

Valuation

Recommended · Revenue & margin DCF

Price used

$37.19

Estimated value / share

$32.07

Base scenario

This estimate is 13.76% below the price used.

USD · TTM ending 2026-06-30

Year 1 growth 9.68% · Ending margin 9.87% · Discount rate 7.67%

Assumption scenarios, not statistical confidence intervals.

Method, dates & sources

Estimated from future revenue, operating margins, and the investment needed to support them.

Price timestamp: Sep 18, 2026, 8:00 PM UTC
Financial statement period: TTM ending 2026-06-30
Data refreshed: Sep 20, 2026, 10:18 AM UTC · provider

Why this method?

FCFF is positive, but the series is too unstable to anchor a direct cash-flow CAGR and the business still fails the steady-state comparability checks. Use a revenue-and-margin transition model instead of normalizing and compounding current FCFF.

Is FCFF positive and has it been for 3+ consecutive years? 11 consecutive positive FCFF years are available.

Is FCFF stable (not swinging >30% year to year)? The largest recent FCFF swing is 205.8%. Latest capex is 2.2x the prior median, which points to a capex supercycle that should be normalized first.

Do you have 5+ years of positive FCFF history? 11 consecutive positive FCFF years are available.

Is the business model structurally similar to what it should be in 10 years? Operating margin moved 12.7 percentage points across the last five years, above the 10.0-point stability threshold, so steady-state FCFF is not a reliable anchor yet.

Price vs Fundamentals

Why The Stock Is Moving

Likely multiple compressionHigh confidence

1Y Price: -12.66%Revenue (TTM): 10.46%FCF (TTM): 54.47%P/FCF: 45th pct

What changed

The stock fell 12.66% over the last year. Revenue grew 10.46% over the trailing twelve months. Operating margin moved from 9.47% to 10.53%. Free cash flow grew 54.47% over the trailing twelve months.

What the market seems to be pricing

Visible fundamentals weakened far less than the stock price. The market appears to be discounting durability, risk, or trust rather than just the latest reported numbers.

What would invalidate this read

This read changes if operating margin (currently 10.53%) continues to decline, or if revenue growth turns negative. The bull case requires the business to hold its current trajectory.

Performance

Return analysis

Company profile

Established in Arlington, Virginia, in 1969, Leonardo DRS, Inc. is a leading supplier of advanced defense products and technologies.

CEOJohn A. Baylouny

SectorIndustrials

IndustryAerospace & Defense

Employees7,300

IPO dateJun 24, 1985

https://www.leonardodrs.com

Market multiples

Forward P/E—

EV/EBITDA20.29

Enterprise value$8.87B

Stock splits

Sep 14, 2016↓ Reverse

Every 2 shares became 1

-50%

Feb 14, 2007↓ Reverse

Every 3 shares became 1

-67%

Apr 4, 2001↓ Reverse

Every 5 shares became 2

-60%

Oct 23, 1990↓ Reverse

Every 5 shares became 2

-60%

Profitability & growth

Revenue growth10.13%

Gross margin (FY2025)23.82%▲1.1ppvs FY2024

Operating margin (FY2025)9.54%▲0.5ppvs FY2024

ROE11.92%▲1.4ppvs FY2025

Analyst consensus

RatingBuy

Target price$52.50▲41.17%

Buy

Hold

Sell

Analyst ratings tend to be lagging indicators. Use as one signal among many.

Earnings

Full quarter-by-quarter history of actuals vs estimates. Switch into compare mode to inspect one metric year-over-year.

Next report

Oct 29, 2026

Q4 FY26 · EPS est $0.35 · Revenue est $1.03B

View

Dividends

$0.36/shareQuarterlySafe

DRS pays a dividend with a 0.97% dividend yield, covered 2.4× by free cash flow.

Dividend Yield

0.97%

Annual Div / Share

$0.36

CAGR

—

Payout Ratio

29.81%

Safe

Dividend Growth Rate

Dividend Safety

10/10Safe

Income Projection

Invest

USD

Growth rate:

Reinvest dividends

Today

$10/yr

$1/mo

In 5 yrs

$10/yr

$1/mo

In 10 yrs

$10/yr

$1/mo

Today	In 5 yrs	In 10 yrs
$10/yr $1/mo	$10/yr $1/mo	$10/yr $1/mo

Analysis

Dividend Strengths

Well-covered by free cash flow

The dividend is covered 2.4× by free cash flow, indicating the company generates sufficient cash to sustain and potentially grow the payout without straining its finances.

Risks to Watch

No strong risk signal stands out from the latest period pair.

NASDAQ · DRS

Leonardo DRS, Inc.

Industrials · Aerospace & Defense

$37.19▲ 0.35% ($0.13)at close

After hours$37.20▲ 0.04%7:30 PM ET

52-week

$32.43$50.59

What the market price implies · Reverse DCF

To support a price of $37.19, this model requires revenue to grow by 8.18%/yr over the next 10 years, compounded annually.

Historical revenue grew by 6.1%/yr over the past 4 years. The required annual growth rate is 2.08 percentage points higher.

Selected forecast · Base scenario

6.18%/yr · actual 10-year annualized revenue growth

Year 1 growth: 9.68%

Market-implied · Base operating assumptions + edited margins

8.18%/yr · flat 10-year annualized revenue growth

Valuation

Recommended · Revenue & margin DCF

Price used

$37.19

Estimated value / share

$32.07

Base scenario

This estimate is 13.76% below the price used.

USD · TTM ending 2026-06-30

Year 1 growth 9.68% · Ending margin 9.87% · Discount rate 7.67%

Assumption scenarios, not statistical confidence intervals.

Method, dates & sources

Estimated from future revenue, operating margins, and the investment needed to support them.

Price timestamp: Sep 18, 2026, 8:00 PM UTC
Financial statement period: TTM ending 2026-06-30
Data refreshed: Sep 20, 2026, 10:18 AM UTC · provider

Why this method?

Is FCFF positive and has it been for 3+ consecutive years? 11 consecutive positive FCFF years are available.

Is FCFF stable (not swinging >30% year to year)? The largest recent FCFF swing is 205.8%. Latest capex is 2.2x the prior median, which points to a capex supercycle that should be normalized first.

Do you have 5+ years of positive FCFF history? 11 consecutive positive FCFF years are available.

Price vs Fundamentals

Why The Stock Is Moving

Likely multiple compressionHigh confidence

1Y Price: -12.66%Revenue (TTM): 10.46%FCF (TTM): 54.47%P/FCF: 45th pct

What changed

The stock fell 12.66% over the last year. Revenue grew 10.46% over the trailing twelve months. Operating margin moved from 9.47% to 10.53%. Free cash flow grew 54.47% over the trailing twelve months.

What the market seems to be pricing

Visible fundamentals weakened far less than the stock price. The market appears to be discounting durability, risk, or trust rather than just the latest reported numbers.

What would invalidate this read

This read changes if operating margin (currently 10.53%) continues to decline, or if revenue growth turns negative. The bull case requires the business to hold its current trajectory.

Performance

Return analysis

Company profile

Established in Arlington, Virginia, in 1969, Leonardo DRS, Inc. is a leading supplier of advanced defense products and technologies.

CEOJohn A. Baylouny

SectorIndustrials

IndustryAerospace & Defense

Employees7,300

IPO dateJun 24, 1985

https://www.leonardodrs.com

Market multiples

Forward P/E—

EV/EBITDA20.29

Enterprise value$8.87B

Stock splits

Sep 14, 2016↓ Reverse

Every 2 shares became 1

-50%

Feb 14, 2007↓ Reverse

Every 3 shares became 1

-67%

Apr 4, 2001↓ Reverse

Every 5 shares became 2

-60%

Oct 23, 1990↓ Reverse

Every 5 shares became 2

-60%

Profitability & growth

Revenue growth10.13%

Gross margin (FY2025)23.82%▲1.1ppvs FY2024

Operating margin (FY2025)9.54%▲0.5ppvs FY2024

ROE11.92%▲1.4ppvs FY2025

Analyst consensus

RatingBuy

Target price$52.50▲41.17%

Buy

Hold

Sell

Analyst ratings tend to be lagging indicators. Use as one signal among many.

Earnings

Full quarter-by-quarter history of actuals vs estimates. Switch into compare mode to inspect one metric year-over-year.

Next report

Oct 29, 2026

Q4 FY26 · EPS est $0.35 · Revenue est $1.03B

View

Dividends

$0.36/shareQuarterlySafe

DRS pays a dividend with a 0.97% dividend yield, covered 2.4× by free cash flow.

Dividend Yield

0.97%

Annual Div / Share

$0.36

CAGR

—

Payout Ratio

29.81%

Safe

Dividend Growth Rate

Dividend Safety

10/10Safe

Income Projection

Invest

USD

Growth rate:

Reinvest dividends

Today

$10/yr

$1/mo

In 5 yrs

$10/yr

$1/mo

In 10 yrs

$10/yr

$1/mo

Today	In 5 yrs	In 10 yrs
$10/yr $1/mo	$10/yr $1/mo	$10/yr $1/mo

Analysis

Dividend Strengths

Well-covered by free cash flow

The dividend is covered 2.4× by free cash flow, indicating the company generates sufficient cash to sustain and potentially grow the payout without straining its finances.

Risks to Watch

No strong risk signal stands out from the latest period pair.