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RESTON, Va. - Leidos (NYSE:LDOS), a prominent information technology service provider with a market capitalization of $17.1 billion and an impressive "GREAT" financial health score according to InvestingPro, has announced a partnership with Moveworks to deploy agentic artificial intelligence (AI) solutions aimed at enhancing the productivity of government workers in the United States, the United Kingdom, and Australia. This collaboration is set to introduce decision-making digital assistants to streamline routine administrative tasks across various government agencies.
Agentic AI, which serves as a digital personal assistant, is designed to automate daily work processes, allowing commercial organizations to operate more efficiently. The partnership with Moveworks is expected to extend these benefits to the government sector, ensuring compliance with stringent security measures. Leidos has facilitated Moveworks in achieving U.S. government security certification, positioning the company to support federal agencies with secure AI tools.
Steve Hull, president of digital modernization at Leidos, emphasized the company's longstanding commitment to aiding government agencies in achieving their objectives with precision. He stated that Leidos' expertise in AI and cybersecurity lays a robust foundation for the adoption of transformative technology within the government sector.
Government employees will be able to utilize agentic AI for various administrative functions, such as managing technology assets, navigating databases, and composing emails, thereby reallocating their time to focus on core mission-critical tasks.
Bhavin Shah, CEO and co-founder of Moveworks, expressed enthusiasm about the partnership's potential to elevate the standard of support for government employees. He highlighted the company's dedication to developing AI solutions that improve operational efficiency and quality within government agencies.
The collaboration is based on the premise that introducing intelligent solutions to government agencies will result in significant benefits, including increased efficiency and better use of resources.
Leidos, headquartered in Reston, Virginia, reported annual revenues of approximately $16.7 billion for the fiscal year ended January 3, 2025, maintaining a healthy P/E ratio of 14.24 and demonstrating consistent dividend growth for six consecutive years. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics, making it an interesting prospect for value investors. Moveworks has achieved over $100 million in annual recurring revenue as of September 2024 and serves a roster of clients that includes 10% of the Fortune 500 companies. For detailed insights and additional ProTips about Leidos's financial performance, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US equities.
This partnership announcement is based on a press release statement and contains forward-looking statements subject to risks and uncertainties, as highlighted by Leidos in its regulatory filings. With its moderate debt levels and strong return on equity of 29%, Leidos maintains a solid financial foundation for future growth initiatives. InvestingPro subscribers can access more detailed financial metrics, expert analysis, and additional ProTips to make informed investment decisions.
In other recent news, Leidos has been awarded a $390 million contract to provide the National Security Agency with signals intelligence capabilities, engineering, and analysis tools. This contract involves a range of services, including systems administration and engineering support, and is structured with a base year and four option years. Additionally, the Department of Defense has canceled a project involving Oracle's cloud HR software, which also affected Leidos, as the company was involved in services and support for the initiative. This project was significantly over budget and behind schedule, resulting in a potential revenue loss of approximately $75 million for Leidos.
Leidos has also made advancements with the UK Ministry of Defence by migrating its Support Chain Integration Platform to the Amazon Web Services cloud, enhancing the MOD's digital infrastructure. This transition aims to bolster operational flexibility and cybersecurity for the MOD. Meanwhile, Jefferies has maintained a Hold rating on Leidos, with a price target of $155.00, noting a minor setback with the cancellation of a small task order within a larger Social Security Administration contract. Despite some concerns, Jefferies forecasts a 3% organic growth for Leidos in 2025.
Furthermore, Leidos shares experienced movement amid broader defense sector optimism, although specific stock price details were not provided. Investors remain attentive to developments in government contracts and the company's strategic adaptations. These recent developments highlight Leidos's ongoing engagements and strategic shifts within the defense and technology sectors.
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