Is Leidos Holdings (LDOS) Cheap Following Its Earnings Beat And Higher Guidance?

Leidos Holdings (LDOS) reported a strong Q2 2026, beating earnings and raising guidance, which, combined with new contract wins in defense and AI, led to a 9.1% stock price increase over 30 days. Despite this recent gain, the stock is down significantly year-to-date and over the last year, suggesting a potential undervaluation with a fair value estimated at $165.27 against a current price of $118.72. The company's strengths lie in accelerating demand for digital modernization and AI solutions, promising margin expansion and earnings growth, though risks like tightening federal contract spending exist.