Leidos Holdings Inc (LDOS)

History and Background

Leidos was formed in 1969 as Science Applications International Corporation (SAIC) by Dr. J. Robert Beyster. SAIC split into two companies in 2013, with the national security, health, and engineering businesses forming Leidos. The name change became effective in 2013, and Leidos has grown through acquisitions and organic expansion, focusing on technology and engineering solutions for government and commercial customers.

Core Business Areas

• Defense Solutions: Provides systems integration, engineering, and advanced technology solutions to support U.S. and international defense agencies and military services. This includes areas like C4ISR, cybersecurity, and maritime solutions.
• Civil Solutions: Offers services and solutions to government agencies in areas such as air traffic management, energy, and infrastructure. Includes IT modernization, data analytics, and digital transformation.
• Health Solutions: Provides healthcare IT solutions, including electronic health records, data analytics, and research and development support to healthcare providers and government health agencies.

Leadership and Structure

Leidos is led by CEO Thomas Bell. The organizational structure consists of various operating groups focused on specific markets and technologies. These groups are supported by corporate functions such as finance, human resources, and legal.

Key Offerings

• Electronic Health Records (EHR): Leidos provides customized EHR solutions to the Department of Veteran's Affairs. The market share is difficult to assess specifically, but Leidos is one of the major EHR providers to the US government. Competitors: Oracle Cerner, Epic Systems.
• Air Traffic Management Solutions: Leidos provides automation, simulation and air navigation services to customers like the FAA. Competitors: Thales, Indra Sistemas.
• Cybersecurity Solutions: Leidos delivers cybersecurity services to the DoD and other U.S. Government agencies. Competitors: RTX, Booz Allen Hamilton.

Industry Overview

The industry is characterized by high demand for technology and engineering services, particularly from government clients. Trends include increased spending on cybersecurity, digital transformation, and IT modernization.

Positioning

Leidos is a major player in the government services market, holding a strong position due to its size, technical expertise, and long-standing relationships with government agencies. Its competitive advantages include its broad service portfolio and its ability to deliver complex, integrated solutions.

Total Addressable Market (TAM)

The total addressable market is in the hundreds of billions of dollars, encompassing government IT spending, defense spending, and healthcare IT. Leidos is positioned to capture a significant portion of this market due to its established presence and comprehensive service offerings.

Key Competitors

• RTX (RTX)
• Booz Allen Hamilton (BAH)
• General Dynamics (GD)
• Northrop Grumman (NOC)

Competitive Landscape

Leidos competes with larger and smaller companies, leveraging its scale and diversified service offerings. It distinguishes itself through its deep technical expertise and its ability to deliver complex, integrated solutions. However, it faces challenges from companies with even larger scale or more specialized expertise.

Gibbs & Cox

• Year: 2021
• Acquisition Price (USD millions): 380
• Strategic Rationale: Enhanced Leidos' maritime capabilities and expanded its presence in the naval architecture and marine engineering market.

1901 Group

• Year: 2021
• Acquisition Price (USD millions): 215
• Strategic Rationale: Expanded Leidos' IT capabilities and its presence in the cloud services market.

Historical Growth: Leidos has grown both organically and through acquisitions. Its revenue growth has been steady, driven by increased government spending on technology and defense.

Future Projections: Analyst estimates suggest continued growth for Leidos, driven by its strong position in key markets such as cybersecurity and IT modernization.

Recent Initiatives: Recent initiatives include strategic acquisitions to expand its service offerings and investments in research and development to drive innovation.

Leidos is a strong player in the government services market, benefiting from long-standing relationships and diversified service offerings. Its growth is driven by government spending on technology and defense, particularly in areas like cybersecurity and IT modernization. Leidos needs to manage its reliance on government contracts, integration challenges from acquisitions, and competition to continue its growth trajectory. Overall, Leidos maintains a solid position with growth potential.

• BAH
• GD
• NOC
• CACI
• LHX

Data Sources:

• Company Filings (SEC), Investor Relations, Market Research Reports, Analyst Reports

Disclaimers:

The data provided is for informational purposes only and should not be considered financial advice. Investment decisions should be based on thorough research and consultation with a financial professional. Market share data is estimated and may vary depending on the source.