Quality Investor

Telos Corporation

Rank #113Hypergrowth

TLS · Nasdaq · Technology

Telos Corporation (TLS) — Rank #113 by gross profitability (GP/assets 0.44) · ROE -39.1% · Piotroski F-Score N/A.

As-of 2026-09-15 · 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

Price History

TLS-88.5% · -35.1% CAGRSPY+80.5% · +12.5% CAGR

Company Snapshot

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

Market Cap

$312.03M

P/E (annual)

P/S (annual)

1.9

P/B

3.3

P/OCF (annual)

10.3

Shareholder Yield

-1.4%

Employees

509

Industry

Software - Infrastructure

Exchange

Nasdaq

Signal Flags

2 green1 yellow
Revenue growth acceleratingGrowth rate increasing year over year
Deferred revenue growingRevenue and deferred revenue both growing — retention signal
Disclosure regressionA previously-disclosed line item is no longer reported — worth checking the filing for why

Quality Profile

Profitability

1/1 pass
GP / assets
0.44
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%

Terry Smith quality gate

Passes 0/5 Terry Smith thresholds

2 of 5 thresholds not computable from filed data.

What Growth Is Priced In

Implied revenue growth (10Y)

-1.4%

incredible deal

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

Dilution drag: 1.4% — per-share value needs a total required return of 0.0% once share-count change is priced in.

vs. own 6-year median revenue growth: 1.2%

within its own history

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

r = 8%

-5.1%

r = 10% (base)

-1.4%

r = 12%

1.9%

Net debt / market cap: -16.6%

Note: current FCF margin is 1.5σ above its historical mean — implied growth may understate valuation risk if the margin reverts.

Base FCF: $29.4M3Y mean FCF: $638K

Valuation History

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

P / S

Price / revenue per share

1.8xFair
0.7xmed 1.9x7.3x

P / B

Price / book value per share

3.1xFair
0.8xmed 2.4x10.4x

P / GP

Price / gross profit per share

4.9xCheap
1.8xmed 5.3x21.1x

P / FCF

Price / free cash flow per share

10.2xFair
9.3xmed 84.8x414.9x

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

Profitability

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%

Anti-fragile safety

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.

Cash-flow health

Free cash flow

$29.44M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF / net income

1.81

Cash-backing of earnings.

FCF/NI divergence

Unfavorable divergence (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

18.3%

Stock-based comp intensity.

Piotroski F-Score

F-Score

N/A

Only 8/9 components determinable.

Lifecycle Phase History

20202025
Op. Leverage
Hypergrowth
Decline