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ASHBURN, Va. - Telos Corporation (NASDAQ:TLS), a provider of cyber, cloud, and enterprise security solutions currently trading near InvestingPro’s Fair Value estimate, has announced its selection as a prime contractor for the U.S. Navy’s SeaPort Next (LON:NXT) Generation (SeaPort NxG) contract. The company maintains a strong liquidity position with a current ratio of 3.64 and holds more cash than debt on its balance sheet. As part of the indefinite-delivery/indefinite-quantity (IDIQ) contract, Telos will have the opportunity to bid on task orders for providing professional support services (PSS) to various Navy commands and the United States Marine Corps (USMC) until 2028.
The SeaPort NxG serves as an integrated and mandatory approach for the Navy to contract services such as network engineering, operational support, program management, logistics, and training. These services are aimed at supporting cyber risk assessment and other critical functions for the Navy Virtual SYSCOM Commanders, which include NAVAIR, NAVFAC, NAVSEA, NAVSUP, NAVWAR, ONR, the Military Sealift Command (MSC), and the USMC.
John B. Wood, CEO and chairman of Telos, expressed the company’s enthusiasm for joining the SeaPort NxG, emphasizing the strengthened relationship with the U.S. Navy and the forward-looking provision of essential services.
This development follows Telos’ successful acquisition of positions on several federal government blanket purchase agreements (BPAs) and IDIQ contract vehicles since 2023. Collectively, these contracts represent an addressable market of approximately $35 billion, offering Telos access to compete for new business opportunities across various defense and security sectors. According to InvestingPro data, while the company faces near-term revenue headwinds with an 18.93% decline in the last twelve months, four analysts have recently revised their earnings expectations upward for the upcoming period.
The company’s portfolio includes a range of cybersecurity solutions for IT risk management, cloud security solutions for asset protection and compliance, and enterprise security solutions covering identity and access management, secure mobility, and network management. Discover more insights about Telos’ financial health and growth prospects with InvestingPro, which offers additional exclusive ProTips and comprehensive analysis in its Pro Research Report, available for over 1,400 US stocks.
The information reported is based on a press release statement by Telos Corporation. The company’s forward-looking statements are subject to risks and uncertainties, as outlined in filings with the U.S. Securities and Exchange Commission, and do not guarantee future performance. Telos advises readers to consider these factors when relying on such statements.
In other recent news, Telos Corporation has secured a $40 million contract from the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, following the resolution of a protest. This development is projected to benefit Telos’ Security Solutions business over the next five years. In addition, the company’s Q3 results surpassed expectations, with revenue reaching $23.8 million, primarily driven by the TSA PreCheck program. Despite a significant charge in Q3, Telos improved its adjusted gross margin and reported a smaller adjusted EBITDA loss than anticipated.
DA Davidson and BMO Capital Markets have responded to these developments by upgrading their stock price targets for Telos, while maintaining neutral ratings. Furthermore, Telos has announced a restructuring plan expected to bring the company to a slightly positive EBITDA by 2025. This plan is complemented by the initiation of new programs expected to contribute approximately $60-85 million in revenue by 2025. Looking ahead, Telos projects a revenue growth in Q4, with estimates ranging from $24.5 million to $26.5 million. By 2025, the company aims to establish 500 TSA PreCheck enrollment locations and expects substantial annual revenue growth, supported by a robust business pipeline valued at approximately $4.1 billion.
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