Leonardo DRS, Inc.
Leonardo DRS, Inc. Fundamental Analysis
Leonardo DRS, Inc. (DRS) shows moderate financial fundamentals with a PE ratio of 38.27, profit margin of 7.43%, and ROE of 10.22%. The company generates $3.6B in annual revenue with strong year-over-year growth of 14.44%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 59.9/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze DRS's fundamental strength across five key dimensions:
Efficiency Score
WeakDRS struggles to generate sufficient returns from assets.
Valuation Score
WeakDRS trades at a premium to fair value.
Growth Score
ExcellentDRS delivers strong and consistent growth momentum.
Financial Health Score
ExcellentDRS maintains a strong and stable balance sheet.
Profitability Score
WeakDRS struggles to sustain strong margins.
Key Financial Metrics
Is DRS Expensive or Cheap?
P/E Ratio
DRS trades at 38.27 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, DRS's PEG of 7.27 indicates potential overvaluation.
Price to Book
The market values Leonardo DRS, Inc. at 3.83 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 23.49 times EBITDA. This signals the market has high growth expectations.
How Well Does DRS Make Money?
Net Profit Margin
For every $100 in sales, Leonardo DRS, Inc. keeps $7.43 as profit after all expenses.
Operating Margin
Core operations generate 9.58 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.22 in profit for every $100 of shareholder equity.
ROA
Leonardo DRS, Inc. generates $6.24 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Leonardo DRS, Inc. produces operating cash flow of $385.05M, showing steady but balanced cash generation.
Free Cash Flow
Leonardo DRS, Inc. produces free cash flow of $265.73M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.00 in free cash annually.
FCF Yield
DRS converts 2.60% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
38.27
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
7.27
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.83
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.85
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.18
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.002
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How DRS Stacks Against Its Sector Peers
| Metric | DRS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 38.27 | 26.49 | Worse (Expensive) |
| ROE | 10.22% | 1307.00% | Weak |
| Net Margin | 7.43% | -5131.00% (disorted) | Weak |
| Debt/Equity | 0.18 | 0.81 | Strong (Low Leverage) |
| Current Ratio | 2.00 | 10.48 | Strong Liquidity |
| ROA | 6.24% | -1549793.00% (disorted) | Weak |
DRS outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Leonardo DRS, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-34.55%
Industry Style: Cyclical, Value, Infrastructure
DecliningEPS CAGR
55.98%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
-5.19%
Industry Style: Cyclical, Value, Infrastructure
Declining