Quality Investor

Leonardo DRS, Inc.

Rank #341Op. Leverage

DRS · Nasdaq · Industrials

Leonardo DRS, Inc. (DRS) — Rank #341 by gross profitability (GP/assets 0.21) · ROE 9.9% · Piotroski F-Score 7 / 9.

As-of 2026-09-15 · CIK 0001833756 · all metrics point-in-time as of the filing date.

About

Leonardo DRS, Inc., together with its subsidiaries, provides defense electronic products and systems, and military support services worldwide.

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It operates through Advanced Sensing and Computing and Integrated Mission Systems segments. The Advanced Sensing and Computing segment designs, develops, and manufacture sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution; and offers sensing capabilities span applications, such as missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared, signals intelligence, and other intelligence systems including electronic warfare, ground vehicle sensing, active electronically scanned array tactical radars, dismounted soldier, and space sensing. This segment also provides network computing, which are utilized across a range of mission applications, such as platform computing on ground and shipboard for advanced battle management, combat systems, radar, command and control, tactical networks, tactical computing, and communications. The Integrated Mission Systems segment offers electrical propulsion systems, which includes power conversion, control, distribution, and propulsion systems, as well as power dense permanent magnet motors, energy storage systems, associated rugged and compact power conversion, electrical actuation systems, as well as advanced thermal management technologies, motor controllers, and instrumentation and control equipment. Leonardo DRS, Inc. was incorporated in 1968 and is based in Arlington, Virginia. Leonardo DRS, Inc. operates as a subsidiary of Leonardo US Holding, LLC

Industry
Aerospace & Defense
Sector
Industrials
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
December 31

Price History

DRS+222.9% · +26.4% CAGRSPY+80.5% · +12.5% CAGR

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

$9.76B

P/E (annual)

35.5

P/S (annual)

2.7

P/B

3.5

P/OCF (annual)

26.7

Shareholder Yield

-0.4%

Employees

7,300

Industry

Aerospace & Defense

Exchange

Nasdaq

Signal Flags

3 green1 yellow
Operating leverage expandingOperating income growing faster than revenue
Deferred revenue growingRevenue and deferred revenue both growing — retention signal
Sequential beat (rev + EPS)Both revenue and EPS exceeded prior quarter — 2-quarter streak
Disclosure regressionA previously-disclosed line item is no longer reported — worth checking the filing for why

Quality Profile

Profitability

1/1 pass
GP / assets
0.21
Return on equity
9.9%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.50
Current ratio
1.92×
Net cash
-$88.00M

Cash Flow

2/3 pass
Positive FCF
PASS
Cash-backed earnings
WARN
Accruals healthy
PASS
SBC / revenue
0.9%

Growth

2/2 pass
Revenue growth
12.8%
Piotroski F-Score
7 / 9
Share dilution
0.4%

Terry Smith quality gate

Passes 0/5 Terry Smith thresholds

1 of 5 threshold not computable from filed data.

What Growth Is Priced In

Implied revenue growth (10Y)

18.2%

fairly valued

The annual FCF growth rate today's price requires over a 10-year horizon (discount rate 10%, terminal growth 2.5%).

Dilution drag: 0.4% — per-share value needs a total required return of 18.6% once share-count change is priced in.

vs. own 6-year median revenue growth: 4.3%

priced above its own history

Cost-of-equity sensitivity (implied growth at different discount rates)

r = 8%

13.3%

r = 10% (base)

18.2%

r = 12%

22.5%

Net debt / market cap: 0.9%

Base FCF: $227M3Y mean FCF: $186M

Valuation History

Current multiple vs historical range at each filing date. Band spans 25th-75th percentile.

P / E

Price / diluted EPS

42.1xExpensive
6.2xmed 31.1x42.1x

P / S

Price / revenue per share

3.2xExpensive
0.8xmed 1.5x3.2x

P / B

Price / book value per share

4.3xExpensive
1.2xmed 2.1x4.3x

P / GP

Price / gross profit per share

13.4xExpensive
4.3xmed 7.0x13.4x

P / FCF

Price / free cash flow per share

51.4xExpensive
19.9xmed 41.0x51.4x

Operating margin expansion and free cash flow are the primary reads at this stage.

Profitability

Gross profitability (GP / assets)

0.21

Primary signal (Novy-Marx).

14th pctl of 37 SIC 38 peers

Return on equity

9.9%

Gross margin

23.8%

3rd pctl of 37 SIC 38 peers

Revenue growth (YoY)

12.8%

RPO growth (YoY)

-0.7%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2022202320242025
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

10.6%

Revenue CAGR (5Y)

5.6%

Earnings CAGR (3Y)

-11.8%

FCF CAGR (3Y)

Anti-fragile safety

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.50

74th pctl of 35 SIC 38 peers (best = lowest)

Current ratio

1.92×

29th pctl of 36 SIC 38 peers

Quick ratio

0.55×

Net cash

-$88.00M

Cash & equivalents minus total debt.

Cash-flow health

Free cash flow

$227.00M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF / net income

-0.18

Cash-backing of earnings.

FCF/NI divergence

Unfavorable divergence (yellow flag).

WARN

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

0.9%

Stock-based comp intensity.

Piotroski F-Score

F-Score

7 / 9

Fundamental-strength score (0-9).

Lifecycle Phase History

20202025
Value
Op. Leverage