Will the Golden Dome Program Take Leidos Holdings to New Heights?

Intensifying threat from next-generation strategic weapons, particularly cruise missiles and hypersonic missiles, over the past decade, has recently prompted the U.S administration to conceptualize the Golden Dome program. To this end, Leidos Holdings Inc. LDOS believes that it is well-positioned to contribute meaningfully to the Golden Dome mission with its next-generation sensor and missile defense capabilities like those used recently in the defense of Guam.  

Inspired by Israel's Iron Dome, the Golden Dome is expected to offer a next-generation missile defense shield for U.S. citizens, with its layered network of sensors, interceptors, and command and control technologies to counter both kinetic and non-kinetic missile attacks.  With LDOS’ extensive expertise in radar systems, threat detection, and AI-driven command-and-control platforms, the company remains confident in securing a contract from the U.S. Department of Defense (DoD) involving the Golden Dome program. 

Notably, Leidos’ next generation of cohesive mission command solutions, like the Rapid Command and Control Enhancement (RC2E) microservices, can enable making better decisions with increased speed and accuracy, while its advanced surveillance sensors, like GroundAware, can detect intrusions in real time and instantaneously provide actionable information on potential threats.

While the Golden Dome initiative remains in the exploratory phase, Leidos Holdings is poised to be a strong contender for future contracts once DoD starts offering official contracts. The company's extensive experience in developing layered air and missile defense systems, such as the Enduring Shield, designed to counter drones and cruise missiles, demonstrates its capability to contribute significantly to national defense strategies against evolving aerial threats.

Defense Stocks Competing Against LDOS for Golden Dome

LDOS apart, there remains a handful of other stocks, especially from the defense industry, like Lockheed Martin LMT and RTX Corp. RTX, that can prove to be strong contenders in winning orders involving the Golden Dome program. 

Lockheed Martin, a leading U.S. missile defense contractor, heads the Missile Defense Agency’s National Team for Command, Control, Battle Management, and Communications (C2BMC), operating the world’s most powerful missile defense software network. Its relevant systems that could position it well for potential Golden Dome contracts include the PAC-3 missile defense system, SBIRS missile warning system, Sentinel A4 surveillance radar and the Long Range Discrimination Radar — all currently used to protect the U.S. homeland.

Meanwhile, RTX poses strong competition to Leidos, particularly due to its long-standing collaboration with Rafael Advanced Defense Systems on Israel’s Iron Dome, the inspiration for the Golden Dome concept. To tap global interest in Iron Dome’s layered missile defense capabilities, RTX unveiled the SkyHunter system in 2017, co-developed with Rafael to protect against low-tier missile threats. Additionally, the RTX-Rafael David’s Sling system provides higher-tier defense, making RTX a credible contender for future U.S. missile defense contracts.

The Zacks Rundown for LDOS

Shares of Leidos have inched up 0.9% year to date against the industry’s loss of 6.1%.

From a valuation standpoint, LDOS is currently trading at a forward 12-month earnings multiple of 13.19X, a roughly 56% discount when stacked up with the industry average of 29.76X.

The Zacks Consensus Estimate for LDOS’ 2025 and 2026 sales implies a year-over-year uptick of 2.7% and 3.2%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

LDOS stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

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