Key Stats for Leonardo DRS Stock
- Price Change: +14.89%
- Current Price: $43.82
- Valuation Model Target: $51.75
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What Happened?
Leonardo DRS (DRS) shares surged 14.89% on February 24, 2026, closing at $43.82.
The defense contractor reported a strong fourth quarter, with revenue hitting $1.06 billion and beating the $993 million consensus estimate.
Management also issued bullish guidance for 2026, predicting total revenue between $3.85 billion and $3.95 billion.
This accelerating growth profile is driven by heavy demand for the company’s electric power components and advanced sensing technologies.
During the earnings call, the company announced that John Baylouny has officially taken over as Chief Executive Officer.
Baylouny emphasized a strict focus on execution speed and defense innovation.
Baylouny stated verbatim: “Our goal is to put innovation capabilities into the hands of our customers even faster without compromising the quality, reliability and affordability that they expect.”
The company also recently secured a major position on the SDA tracking layer Tranche 3 program, heavily expanding its footprint in space-based infrared sensing.
See analysts’ growth forecasts and price targets for Leonardo DRS stock (It’s free!) >>>
Is Leonardo DRS Undervalued Today?
The TIKR Model indicates that the market is undervaluing the company’s robust backlog and improving operational profitability.
The model projects a target price of $51.75, representing an 18.1% potential total return from current levels.
The company finished 2025 with $3.64 billion in total revenue and $441 million in EBITDA.
The business is actively leveraging its massive $8.7 billion order backlog to drive operating efficiencies across its Integrated Mission Systems segment.
CFO Mike Dippold detailed the specific operational levers driving this upside for the coming year.
Dippold stated verbatim: “The implied year-over-year margin improvement is 70 to 90 basis points, driven by improved profitability in Columbia Class, favorable program mix and operating leverage from growth.”
Read the full Leonardo DRS Transcript on TIKR to see the revenue breakdown >>>
Valuation Deep Dive
The TIKR Advanced Valuation Model identifies Leonardo DRS as a premier defense technology provider benefiting from secular spending tailwinds.
- Target Price (2030): $51.75
- Current Price: $43.82
- Annualized Return (IRR): 3.5%
Naval Power and Propulsion: The company is a central technology provider for the Columbia Class submarine program and broader surface combatant modernization efforts. By investing heavily in a new manufacturing facility in Charleston, South Carolina, Leonardo DRS is expanding its capacity to deliver highly modular electric power and propulsion architectures.
R&D and Margin Expansion: Management successfully absorbed a 40% increase in internal research and development investments in 2025 while maintaining stable profitability. The company boasts a 23.8% gross margin over the last twelve months. As these upfront investments convert into active production contracts, the company is structurally positioned to reach mid-teens adjusted EBITDA margins in the coming years.
Conclusion: A highly differentiated defense contractor benefiting from a global military modernization cycle. Leonardo DRS offers an 18.1% projected total return potential. The path to $51.75 is supported by back-to-back years of double-digit organic growth, a record backlog, and strategic expansion into space and naval markets.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
