LEONARDO DRS INC (DRS) Stock Fundamental Analysis
NASDAQ:DRS - Nasdaq - US52661A1088 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to DRS. DRS was compared to 64 industry peers in the Aerospace & Defense industry. While DRS has a great health rating, its profitability is only average at the moment. DRS shows excellent growth, but is valued quite expensive already. This makes DRS very considerable for growth investing!
1. Profitability
1.1 Basic Checks
DRS had positive earnings in the past year.
In the past year DRS had a positive cash flow from operations.
In the past 5 years DRS has always been profitable.
DRS had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
DRS has a better Return On Assets (5.71%) than 68.75% of its industry peers.
DRS has a Return On Equity of 9.10%. This is in the better half of the industry: DRS outperforms 64.06% of its industry peers.
DRS's Return On Invested Capital of 8.58% is fine compared to the rest of the industry. DRS outperforms 73.44% of its industry peers.
DRS had an Average Return On Invested Capital over the past 3 years of 14.80%. This is significantly above the industry average of 7.94%.
The last Return On Invested Capital (8.58%) for DRS is well below the 3 year average (14.80%), which needs to be investigated, but indicates that DRS had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.71% | ||
| ROE | 9.1% | ||
| ROIC | 8.58% |
ROA(3y)6.8%
ROA(5y)7.59%
ROE(3y)11.53%
ROE(5y)11.69%
ROIC(3y)14.8%
ROIC(5y)12.07%
1.3 Margins
DRS has a better Profit Margin (7.00%) than 67.19% of its industry peers.
In the last couple of years the Profit Margin of DRS has declined.
DRS has a better Operating Margin (9.36%) than 62.50% of its industry peers.
DRS's Operating Margin has declined in the last couple of years.
DRS has a Gross Margin (22.84%) which is in line with its industry peers.
In the last couple of years the Gross Margin of DRS has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.36% | ||
| PM (TTM) | 7% | ||
| GM | 22.84% |
OM growth 3Y-18.83%
OM growth 5YN/A
PM growth 3Y-32.5%
PM growth 5YN/A
GM growth 3Y-17.5%
GM growth 5Y-8.71%
2. Health
2.1 Basic Checks
DRS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
DRS has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, DRS has more shares outstanding
DRS has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.77 indicates that DRS is not in any danger for bankruptcy at the moment.
DRS's Altman-Z score of 4.77 is fine compared to the rest of the industry. DRS outperforms 64.06% of its industry peers.
DRS has a debt to FCF ratio of 1.24. This is a very positive value and a sign of high solvency as it would only need 1.24 years to pay back of all of its debts.
DRS has a Debt to FCF ratio of 1.24. This is amongst the best in the industry. DRS outperforms 96.88% of its industry peers.
DRS has a Debt/Equity ratio of 0.13. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.13, DRS is doing good in the industry, outperforming 78.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.24 | ||
| Altman-Z | 4.77 |
ROIC/WACC0.84
WACC10.26%
2.3 Liquidity
DRS has a Current Ratio of 2.02. This indicates that DRS is financially healthy and has no problem in meeting its short term obligations.
DRS has a Current ratio (2.02) which is in line with its industry peers.
DRS has a Quick Ratio of 1.64. This is a normal value and indicates that DRS is financially healthy and should not expect problems in meeting its short term obligations.
DRS has a better Quick ratio (1.64) than 64.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.02 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.00% over the past year.
The Earnings Per Share has been growing by 23.42% on average over the past years. This is a very strong growth
Looking at the last year, DRS shows a quite strong growth in Revenue. The Revenue has grown by 13.58% in the last year.
Measured over the past years, DRS shows a very strong growth in Revenue. The Revenue has been growing by 135.87% on average per year.
EPS 1Y (TTM)25%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%42.86%
Revenue 1Y (TTM)13.58%
Revenue growth 3Y202.18%
Revenue growth 5Y135.87%
Sales Q2Q%16.13%
3.2 Future
Based on estimates for the next years, DRS will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.67% on average per year.
The Revenue is expected to grow by 6.78% on average over the next years.
EPS Next Y15.86%
EPS Next 2Y16.12%
EPS Next 3Y13.82%
EPS Next 5Y12.67%
Revenue Next Year10.2%
Revenue Next 2Y8.08%
Revenue Next 3Y7.31%
Revenue Next 5Y6.78%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 41.60, which means the current valuation is very expensive for DRS.
Compared to the rest of the industry, the Price/Earnings ratio of DRS is on the same level as its industry peers.
DRS's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.91.
With a Price/Forward Earnings ratio of 32.82, DRS can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DRS is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 21.85. DRS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.6 | ||
| Fwd PE | 32.82 |
4.2 Price Multiples
DRS's Enterprise Value to EBITDA is on the same level as the industry average.
DRS's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DRS is cheaper than 76.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.04 | ||
| EV/EBITDA | 26.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DRS has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as DRS's earnings are expected to grow with 13.82% in the coming years.
PEG (NY)2.62
PEG (5Y)N/A
EPS Next 2Y16.12%
EPS Next 3Y13.82%
5. Dividend
5.1 Amount
With a yearly dividend of 0.88%, DRS is not a good candidate for dividend investing.
DRS's Dividend Yield is rather good when compared to the industry average which is at 1.34. DRS pays more dividend than 81.25% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, DRS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
5.2 History
DRS does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DRS pays out 10.26% of its income as dividend. This is a sustainable payout ratio.
DP10.26%
EPS Next 2Y16.12%
EPS Next 3Y13.82%
NASDAQ:DRS (5/23/2025, 12:03:02 PM)
41.6
+0.88 (+2.16%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners26.88%
Inst Owner Change1.88%
Ins Owners0.21%
Ins Owner Change17.99%
Market Cap11.07B
Analysts81.67
Price Target44.01 (5.79%)
Short Float %3.22%
Short Ratio2.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP10.26%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.18%
Min EPS beat(2)6.36%
Max EPS beat(2)20.01%
EPS beat(4)4
Avg EPS beat(4)19.76%
Min EPS beat(4)6.36%
Max EPS beat(4)30.8%
EPS beat(8)8
Avg EPS beat(8)21.1%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)5.23%
Min Revenue beat(2)3.09%
Max Revenue beat(2)7.38%
Revenue beat(4)4
Avg Revenue beat(4)5.93%
Min Revenue beat(4)3.09%
Max Revenue beat(4)9.58%
Revenue beat(8)7
Avg Revenue beat(8)4.28%
Revenue beat(12)10
Avg Revenue beat(12)328.61%
Revenue beat(16)12
Avg Revenue beat(16)363.02%
PT rev (1m)13.11%
PT rev (3m)16.21%
EPS NQ rev (1m)-0.2%
EPS NQ rev (3m)-4.48%
EPS NY rev (1m)1.37%
EPS NY rev (3m)1.85%
Revenue NQ rev (1m)1.61%
Revenue NQ rev (3m)2.56%
Revenue NY rev (1m)0.99%
Revenue NY rev (3m)2.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.6 | ||
| Fwd PE | 32.82 | ||
| P/S | 3.31 | ||
| P/FCF | 38.04 | ||
| P/OCF | 27.81 | ||
| P/B | 4.31 | ||
| P/tB | 9.17 | ||
| EV/EBITDA | 26.71 |
EPS(TTM)1
EY2.4%
EPS(NY)1.27
Fwd EY3.05%
FCF(TTM)1.09
FCFY2.63%
OCF(TTM)1.5
OCFY3.6%
SpS12.57
BVpS9.66
TBVpS4.54
PEG (NY)2.62
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.71% | ||
| ROE | 9.1% | ||
| ROCE | 10.2% | ||
| ROIC | 8.58% | ||
| ROICexc | 9.79% | ||
| ROICexgc | 19.86% | ||
| OM | 9.36% | ||
| PM (TTM) | 7% | ||
| GM | 22.84% | ||
| FCFM | 8.7% |
ROA(3y)6.8%
ROA(5y)7.59%
ROE(3y)11.53%
ROE(5y)11.69%
ROIC(3y)14.8%
ROIC(5y)12.07%
ROICexc(3y)17.19%
ROICexc(5y)16.27%
ROICexgc(3y)41.83%
ROICexgc(5y)31.06%
ROCE(3y)17.68%
ROCE(5y)14.42%
ROICexcg growth 3Y5.24%
ROICexcg growth 5YN/A
ROICexc growth 3Y-19.58%
ROICexc growth 5YN/A
OM growth 3Y-18.83%
OM growth 5YN/A
PM growth 3Y-32.5%
PM growth 5YN/A
GM growth 3Y-17.5%
GM growth 5Y-8.71%
F-Score8
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 1.24 | ||
| Debt/EBITDA | 0.83 | ||
| Cap/Depr | 116.3% | ||
| Cap/Sales | 3.2% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 98.27% | ||
| Profit Quality | 124.36% | ||
| Current Ratio | 2.02 | ||
| Quick Ratio | 1.64 | ||
| Altman-Z | 4.77 |
F-Score8
WACC10.26%
ROIC/WACC0.84
Cap/Depr(3y)88%
Cap/Depr(5y)129.75%
Cap/Sales(3y)2.39%
Cap/Sales(5y)3.79%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)25%
EPS 3Y23.42%
EPS 5YN/A
EPS Q2Q%42.86%
EPS Next Y15.86%
EPS Next 2Y16.12%
EPS Next 3Y13.82%
EPS Next 5Y12.67%
Revenue 1Y (TTM)13.58%
Revenue growth 3Y202.18%
Revenue growth 5Y135.87%
Sales Q2Q%16.13%
Revenue Next Year10.2%
Revenue Next 2Y8.08%
Revenue Next 3Y7.31%
Revenue Next 5Y6.78%
EBIT growth 1Y23.23%
EBIT growth 3Y145.27%
EBIT growth 5YN/A
EBIT Next Year42.76%
EBIT Next 3Y21.39%
EBIT Next 5YN/A
FCF growth 1Y357.52%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y965.22%
OCF growth 3YN/A
OCF growth 5YN/A