Leidos Holdings Wins $23M FMS Contract To Support GETS-1000

Leidos Holdings, Inc. (NYSE:LDOS) recently secured a $23-million Foreign Military Sales (FMS) contract for the General Electronic Test Station (GETS-1000) for Qatar, Saudi Arabia and the United Arab Emirates. The contract was awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL.

Per the deal terms, Leidos will provide GETS-1000 test equipment along with test program set hardware and software, upgrades and repair parts, and services like equipment installation, training and engineering support. Work related to the deal will be performed in Huntsville, AL, and is expected to get completed by Dec 31, 2024.

What is GETS-1000?

Leidos' GETS-1000 is a depot test equipment supporting the military equipment in missile weapon systems such as Lockheed Martin's (NYSE:LMT) Patriot Advanced Capability-3 (PAC-3) missiles and Raytheon's (NYSE:RTN) M3 Hawk surface-to-air missiles.

What Favors Leidos?

Per a report by Mordor Intelligence, the global Electrical Test Equipment market size is expected to see a CAGR of 9.5% over the forecast period of 2019-2024. The ever-increasing need for testing equipment upgrades and providing regular technical assistance to missiles, like the PATRIOT and Hawk, are the major factors expected to
benefit this market and thereby, Leidos.

Further, the company's backlog during the third quarter of 2019 was $23.9 billion compared with $20.8 billion as of Dec 28, 2018. Such solid backlog trends indicate impressive revenue growth prospects for the company in the quarters ahead. Considering this, we expect the latest contract win to bolster Leidos’ top line.

Price Movement

In a year’s time, shares of Leidos have soared 93.9% compared with the industry’s 29.2% growth.

Zacks Rank & Another Key Pick

Leidos currently carries a Zacks Rank #2 (Buy). Another similar-ranked stock in the same space is L3Harris Technology Inc (NYSE:LHX) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

L3Harris’ long-term growth estimates currently stand at 10.4%. The company delivered average positive earnings surprise of 5.02% in the last four quarters.

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