Quality Investor

Leonardo DRS, Inc.

Rank #325Op. LeverageWatchlistCompare with other stocks

DRS · Nasdaq · Industrials

Leonardo DRS, Inc. (DRS) — Rank #325 by gross profitability (GP/assets 0.21) · ROE 9.9% · Piotroski F-Score 7 / 9.

As-of 2026-10-30 · 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

Company Snapshot

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

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

7,300

Industry

Aerospace & Defense

Exchange

Nasdaq

11/12

Flags passed

DRS passes 11/12 quality flags

1 caution to review

  • CAUTION
    Disclosure regression

    A previously-disclosed line item is no longer reported — worth checking the filing for why

  • PASS
    Gross margin holding
  • PASS
    Dilution within 2%
  • PASS
    FCF not negative from investment
  • PASS
    Revenue not declining
  • PASS
    Operating margin holding
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    Balance sheet stable
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Operating leverage expanding · Deferred revenue growing · Sequential beat (rev + EPS)

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

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%

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

Profitability

Does it make money well?

No warning flags · GP/assets 12th percentile of 41 SIC 38 peers

Gross profitability (GP / assets)

0.21

Primary signal (Novy-Marx).

12th pctl of 41 SIC 38 peers

Return on equity

9.9%

Gross margin

23.8%

2nd pctl of 41 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)

—

Cash Flow Health

Is the cash real?

No warning flags · FCF 18% below net income

Free cash flow

$227.00M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

-18.3%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

WARN

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

0.9%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net debt $88.00M, F-Score 7/9

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.50

62nd pctl of 40 SIC 38 peers (best = lowest)

Current ratio

1.92×

21st pctl of 40 SIC 38 peers

Quick ratio

0.55×

Net cash

-$88.00M

Cash & equivalents minus total debt.

Piotroski F-Score

7 / 9

Fundamental-strength score (0-9).

Valuation

Is the price reasonable?

No warning flags

Capital allocation quality

Composite score

2.7 / 5

Fair
Share count trend
0.4%2/5 Fair
Buyback timing
N/AN/A
Dividend growth consistency(non-payer or broken streak)
0 yr3/5 Good
Net debt trajectory(deleveraging)
1.5%3/5 Good

Lifecycle Phase History

20202025
Value
Op. Leverage

Price History

DRS+264.4% · +29.4% CAGRSPY+82.9% · +12.8% CAGR