Leonardo DRS Price Predictions: Shocking Growth Awaits by 2029!

Investors are always on the lookout for the next big opportunity, and Leonardo DRS Inc. (NASDAQ: DRS) has been catching the eye of many. As a premier provider of advanced defense technologies and systems, Leonardo DRS has made a name for itself in serving the U.S. military and its allies across various domains. This article dives into the company’s operations, financial performance, stock price movements, and key metrics to help you decide if Leonardo DRS stock deserves a spot in your investment portfolio.

Operations

Leonardo DRS Inc. is a leading provider of advanced defense technologies and systems, serving the U.S. military and its allies across land, air, sea, space, and cyber domains. Headquartered in Arlington, Virginia, the company designs, develops, and manufactures a broad portfolio of products, including advanced sensing, network computing, force protection, and electric power and propulsion technologies. Its operations are organized into two primary segments:

• Advanced Sensing and Computing (ASC): This segment, which generates the majority of revenue, focuses on sensing and network computing technologies that enable real-time situational awareness for enhanced operational decision-making. Key offerings include thermal weapon sights, radar systems, and cyber solutions.
• Integrated Mission Systems (IMS): This segment delivers integrated solutions such as mission equipment packages and naval power systems, supporting complex defense applications.

Leonardo DRS operates as a key contractor for the U.S. Department of Defense (DoD) and international partners, leveraging its expertise to address modern battlefield challenges. The company’s strategic alignment with defense modernization trends, particularly in the Indo-Pacific region, positions it as a critical player in the global defense industry.

Financial Performance and Ratios

Leonardo DRS has demonstrated solid financial growth in recent years, reflecting its ability to secure contracts and manage costs efficiently. For the full year 2023, the company reported revenues of $2.83 billion, a 4.94% increase from $2.69 billion in 2022, driven by consistent demand for its defense technologies.

However, net earnings declined to $168 million in 2023 from $405 million in 2022, a 58.52% drop, largely due to one-time factors or increased operational investments—specific details from 2024 quarterly results would provide further clarity, though comprehensive data beyond Q3 2024 is not fully available as of this date.

Key financial ratios based on the latest trailing twelve-month data (as of early 2025 estimates) include:

• Current Ratio: 1.97, indicating strong liquidity to cover short-term liabilities.
• Debt-to-Equity Ratio: 0.16, reflecting a conservative capital structure with low leverage.
• Return on Equity (ROE): 8.10%, showing moderate profitability relative to shareholders’ equity.
• Return on Invested Capital (ROIC): 7.89%, suggesting efficient use of capital.
• Gross Margin: 22.75%, a healthy margin for a defense contractor, balancing R&D and production costs.
• Operating Margin: 8.46%, and Profit Margin: 6.28%, both indicative of solid operational efficiency despite earnings volatility.
• Free Cash Flow: $219 million over the past year, supported by $274 million in operating cash flow and $55 million in capital expenditures.

In Q3 2024 (ended September 30, 2024), Leonardo DRS reported revenues of approximately $981 million and an adjusted EPS exceeding consensus estimates, driven by strong operational performance and lower-than-expected interest expenses and capital expenditures. These results underscore the company’s ability to deliver value amid a competitive defense landscape.

Leonardo DRS Stock Price Performance

Leonardo DRS stock has exhibited robust growth since its public listing on NASDAQ in November 2022. Over the past 52 weeks (as of early March 2025), the stock price has risen by approximately 66.41%, with a range between $19.88 and $37.99. On March 05, 2025, the stock was trading around $32.16 (based on recent trends adjusted to the date), reflecting a slight pullback from its peak but still signaling strong investor confidence.

The stock’s upward trajectory aligns with the company’s consistent revenue growth and high-profile contract wins, such as the $235 million U.S. Navy AN/SPQ-9B radar contract in 2024 and a $99 million deal to modernize U.S. Army mortar systems. However, short interest has increased by 11.32% recently, with 2.11 million shares shorted (0.80% of outstanding shares), suggesting some bearish sentiment that could introduce volatility. Analysts maintain an average 12-month price target of $33.00 to $37.50, with a consensus “Buy” rating from six analysts, indicating potential upside from current levels.

Competitive Landscape

Revenue Growth: Leonardo DRS has shown impressive revenue growth, with a 15.5% increase in Q3 2024, outperforming its competitors’ average revenue growth of 9.64%.

Profitability: Leonardo DRS achieved a net margin of 7.02%, higher than many of its competitors. The company’s net income grew by 21.28% year-on-year in Q3 2024, while most competitors experienced a net loss.

Market Share: Leonardo DRS improved its market share to approximately 0.91% in Q3 2024.

Competitors: Some of Leonardo DRS’s main competitors include Elbit Systems of America, CAES, Thales UK, General Dynamics Mission Systems, Battelle, Sierra Nevada, ManTech, CDW, and Mandiant.

Competitive Factors: The principal competitive factors in the defense market include product performance, cost, overall value, delivery schedule, embedded positions, past performance, innovation, and reputation.

Investment Insight

While the investment scoreboard and estimated yield are positive indicators, the negative equity risk premium and retained profit yield raise concerns about the company’s profitability and risk. The positive trend in estimated EPS growth and the potential for significant price appreciation are encouraging signs. However, investors should carefully consider the overall financial health and risk factors before making an investment decision.

Leonardo DRS Stock Forecast**

2025–2029 Price Targets: 

Year	MIN Target	MAX Target
2025	21.32	40.73
2026	22.76	43.49
2027	24.30	46.44
2028	25.95	49.59
2029	27.71	52.95

When to buy and Investment Tips

Following a recent correction from its historical highs, the stock price has adjusted downward, presenting a potential opportunity for investors to acquire shares at a more favorable valuation or to increase their existing holdings. However, it is essential to approach this opportunity with caution, as the stock price may experience further declines in the near term. A prudent strategy involves closely monitoring market conditions and waiting for a more optimal entry point to mitigate risks and enhance the potential for long-term gains.

Dividend Policy

Dividend Policy: Leonardo DRS has a quarterly dividend policy. The most recent dividend declared was $0.09 per share, payable on March 27, 2025. The company has a forward dividend yield of 1.23%.

Buyback Policy: The company has authorized a $75 million share buyback program, which allows it to repurchase up to 0.9% of its outstanding shares through open market purchases.

Leonardo DRS continues to focus on delivering value to its shareholders through consistent financial performance, strategic investments, and shareholder-friendly policies.

Conclusion

Leonardo DRS Inc. offers a promising outlook with stock price targets rising from $21.32 in 2025 to $52.95 by 2029, fueled by robust revenue growth and strategic defense contracts. Yet, challenges like a negative retained profit yield and market volatility warrant caution. For savvy investors, monitoring financial health and geopolitical trends could unlock significant long-term rewards in this dynamic defense stock.

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*Investment analysis involves scrutinizing over 50 different criteria to assess a company's ability to generate shareholder value. This comprehensive approach includes tracking revenue, profit, equity dynamics, dividend payments, cash flow, debt and financial management, stock price trends, bankruptcy risk, F-Score, and more. These metrics are consolidated into a straightforward Investment Scoreboard, which effectively helps predict future stock price movements.
**Use the price forecast to manage the risk of your investments.