Quality Investor

Telos Corporation

Rank #112HypergrowthWatchlistCompare with other stocks

TLS · Nasdaq · Technology

Telos Corporation (TLS) — Rank #112 by gross profitability (GP/assets 0.44) · ROE -39.1% · Piotroski F-Score N/A.

As-of 2026-10-30 · CIK 0000320121 · all metrics point-in-time as of the filing date.

About

Telos Corporation, together with its subsidiaries, provides cyber, cloud, and enterprise security solutions in the United States and internationally.

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It operates through two segments: Security Solutions and Secure Networks. The company offers Xacta, a platform delivering automated cyber risk management and compliance processes for systems based in the cloud, on-premises, and in hybrid environments; Xacta.ai, an artificial intelligence capability at Xacta cyber GRC platform; and risk management framework consulting services, security assessment and compliance, engineering and evaluation, operations, penetration testing, and digital forensics. It also provides Telos Automated Message Handling System, a web-based organizational message distribution and management for mission-critical communications used by military field operatives. In addition, the company offers Telos Identity Solutions, a portfolio of identity solutions that support secure identity verification, biometric enrollment, and trusted identity services for government and commercial customers; TSA PreCheck enrollment services, IDVetting, and Aviation Channeling Services, which provide identity enrollment, FBI background check submission, and biometric services for government agencies, transportation security programs, and regulated industries; and ONYX, a proprietary touchless fingerprint biometric technology designed to enable secure and scalable biometric authentication across mobile and enterprise environments. Further, the company provides secure mobility solutions that enable work off-premise and minimize operational and security concerns across and beyond the enterprise; and network management and defense services for operating, maintaining, and defending complex enterprise networks. It serves the United States federal government, large commercial businesses, state and local governments, and international customers.

Telos Corporation was founded in 1968 and is headquartered in Ashburn, Virginia.

Industry
Software - Infrastructure
Sector
Technology
State
MD
Filer Category
Accelerated filerSmaller reporting company
Fiscal Year End
December 31
Website
telos.com

Company Snapshot

P/S is the primary valuation lens — earnings are reinvested, not available for P/E.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

509

Industry

Software - Infrastructure

Exchange

Nasdaq

10/11

Flags passed

TLS passes 10/11 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
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Revenue growth accelerating · Deferred revenue growing

No data Balance sheet — not counted as a pass.

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
0.44
Return on equity
-39.1%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.50
Current ratio
2.38×
Net cash
$50.65M

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
18.3%

Growth

2/2 pass
Revenue growth
52.2%
Piotroski F-Score
N/A
Share dilution
1.4%

Revenue growth and the path to profitability (margin trend) are the primary reads at this stage.

Profitability

Does it make money well?

No warning flags · GP/assets 0.44

Gross profitability (GP / assets)

0.44

Primary signal (Novy-Marx).

2nd of 8 SIC 7373 peers

Return on equity

-39.1%

Gross margin

37.0%

5th of 7 SIC 7373 peers

Revenue growth (YoY)

52.2%

RPO growth (YoY)

34.4%

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)

-8.7%

Revenue CAGR (5Y)

-1.7%

Earnings CAGR (3Y)

—

FCF CAGR (3Y)

23.8%

Cash Flow Health

Is the cash real?

No warning flags · FCF 181% above net income

Free cash flow

$29.44M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

180.6%

(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).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

18.3%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net cash $50.65M

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.50

3rd of 8 SIC 7373 peers (best = lowest)

Current ratio

2.38×

1st of 8 SIC 7373 peers

Quick ratio

1.69×

Net cash

$50.65M

Cash & equivalents minus total debt.

Piotroski F-Score

N/A

Only 8/9 components determinable.

Valuation

Is the price reasonable?

No warning flags

Capital allocation quality

Composite score

2.7 / 5

Fair
Share count trend
1.4%2/5 Fair
Buyback timing
N/AN/A
Dividend growth consistency(non-payer or broken streak)
0 yr3/5 Good
Net debt trajectory
-1.0%3/5 Good

Lifecycle Phase History

20202025
Op. Leverage
Hypergrowth
Decline

Price History

TLS-87.7% · -34.2% CAGRSPY+82.9% · +12.8% CAGR