Leonardo DRS (NASDAQ:DRS) Announces Quarterly Earnings Results

Leonardo DRS (NASDAQ:DRS) issued its quarterly earnings results on Thursday. The company reported $0.46 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.35 by $0.11, Zacks reports. The firm had revenue of $1.07 billion for the quarter, compared to analyst estimates of $1.03 billion. Leonardo DRS had a return on equity of 12.97% and a net margin of 8.52%. The company’s quarterly revenue was up 11.0% compared to the same quarter last year. During the same period in the previous year, the company posted $0.29 earnings per share.

Here are the key takeaways from Leonardo DRS’s conference call:

• Strong third-quarter execution drove $1.1 billion of revenue, up 11% year over year, 14% adjusted EBITDA margins, and adjusted diluted EPS of $0.46, up 59%.
• Bookings exceeded $1.6 billion with a 1.5x book-to-bill ratio, lifting funded backlog to a record $5.6 billion and providing substantial revenue visibility.
• Management raised and narrowed 2026 guidance to $3.95–$3.985 billion of revenue, $545–$555 million of adjusted EBITDA, and $1.50–$1.53 of adjusted EPS; IMS margins are expected to sustain around 16%, while ASC is expected to continue expanding.
• Demand remains strong across tactical radars, counter-drone systems, space sensing, and naval electric propulsion, including a $500 million counter-drone contract framework and the KDDX destroyer award in South Korea; management expects radar growth to outpace its broader 2027 framework.
• The all-cash Raft acquisition is still expected to close in the fourth quarter and be accretive in its first full year, but is excluded from 2026 guidance; elevated fourth-quarter capital expenditures are expected to bring full-year CapEx to roughly 4% of revenue.

Leonardo DRS Price Performance

NASDAQ DRS traded up $4.14 during trading hours on Thursday, reaching $39.64. 2,301,730 shares of the company’s stock were exchanged, compared to its average volume of 1,079,600. The company has a current ratio of 1.92, a quick ratio of 1.56 and a debt-to-equity ratio of 0.05. The stock has a market cap of $10.58 billion, a PE ratio of 33.31, a price-to-earnings-growth ratio of 2.08 and a beta of 0.32. The firm has a fifty day moving average of $36.83 and a 200-day moving average of $42.20. Leonardo DRS has a one year low of $32.43 and a one year high of $50.59.

Insider Activity

In other Leonardo DRS news, EVP Jason Rinsky sold 3,864 shares of the business’s stock in a transaction dated Tuesday, August 4th. The stock was sold at an average price of $45.81, for a total value of $177,009.84. Following the completion of the transaction, the executive vice president directly owned 23,581 shares of the company’s stock, valued at approximately $1,080,245.61. The trade was a 14.08% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Michael Dippold sold 20,317 shares of the stock in a transaction that occurred on Wednesday, September 2nd. The stock was sold at an average price of $37.18, for a total value of $755,386.06. Following the sale, the chief financial officer directly owned 35,143 shares of the company’s stock, valued at approximately $1,306,616.74. The trade was a 36.63% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 0.25% of the company’s stock.

Key Leonardo DRS News

Here are the key news stories impacting Leonardo DRS this week:

• Positive Sentiment: Large earnings beat: Adjusted EPS was $0.46, above the $0.35–$0.36 consensus range and up from $0.29 a year earlier. Revenue reached $1.07 billion, exceeding the $1.03 billion estimate and growing 11% year over year. Earnings Flash: Adjusted EPS
• Positive Sentiment: Profitability accelerated: Net earnings rose 60% to $115 million, while adjusted EBITDA increased 27% to $149 million. Margin expansion reflected strong execution, favorable business mix and operating leverage. Leonardo DRS Third-Quarter Results
• Positive Sentiment: Higher outlook and strong demand: Leonardo DRS raised its 2026 revenue guidance to $3.95–$3.985 billion, adjusted EBITDA guidance to $545–$555 million and adjusted EPS guidance to $1.50–$1.53. Record quarterly bookings of $1.6 billion produced a 1.5x book-to-bill ratio, lifting funded backlog 21% to $5.6 billion. The board also declared a $0.09-per-share dividend payable November 25. Leonardo DRS Raises Guidance
• Neutral Sentiment: The improved outlook excludes the pending Raft acquisition, leaving investors to assess the deal’s eventual effect on growth, financing and integration.
• Negative Sentiment: Third-quarter free cash flow declined to $61 million from $77 million a year earlier as working-capital needs increased. Cash and equivalents also fell to $294 million from $647 million at year-end, although the company reported no borrowings under its credit facility.

Wall Street Analyst Weigh In

A number of equities research analysts have weighed in on DRS shares. Oppenheimer started coverage on shares of Leonardo DRS in a research note on Thursday, October 22nd. They set an “outperform” rating and a $45.00 price target on the stock. Guggenheim started coverage on shares of Leonardo DRS in a report on Monday, September 14th. They set a “buy” rating and a $51.00 price objective for the company. Weiss Ratings lowered shares of Leonardo DRS from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Thursday, October 22nd. Morgan Stanley lowered their target price on shares of Leonardo DRS from $47.00 to $44.00 and set an “equal weight” rating on the stock in a research note on Friday, October 16th. Finally, JPMorgan Chase & Co. increased their price target on shares of Leonardo DRS from $48.00 to $53.00 and gave the stock a “neutral” rating in a research report on Friday, July 31st. Two equities research analysts have rated the stock with a Strong Buy rating, three have given a Buy rating and four have given a Hold rating to the stock. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $51.57.

Leonardo DRS Company Profile

Leonardo DRS, Inc is a defense technology company that develops and supplies advanced products and systems for the U.S. military and government customers, as well as allied nations. The company operates as a subsidiary of Leonardo S.p.A. and focuses on technologies used in land, sea, air and space-related defense applications.

Its offerings include sensing and surveillance systems, electro-optical and infrared technologies, radar and electronic warfare products, network computing and communications systems, counter-uncrewed aircraft systems, force protection equipment, and naval power and propulsion systems.