Leonardo DRS (DRS) Could Be 36% Undervalued On Fresh Contract Wins

Leonardo DRS (DRS) has landed a fresh string of government deals, led by a 10-year NASA SEWP VI prime contract and a $500 million ceiling IDIQ with JIATF-401 that sharpen federal demand signals.

Leonardo DRS shares closed at $34.51, and despite a 3-year total shareholder return of 89.12%, the stock has given up momentum more recently. The 90-day share price return is down 29.87%, even as fresh government awards and new radar products reshape investor expectations around growth and risk.

Spot fresh contract-driven stories like Leonardo DRS by scanning our hand-picked 95 robotics and automation stocks shaping the future of defense and automation.

Fresh contracts keep stacking up for Leonardo DRS while the share price has slipped hard over the past quarter. This raises a key question: does that pullback offer a reasonable entry today, or does it argue for patience as valuation gets unpacked next?

Most Popular Narrative: 36% Undervalued

The most followed narrative on Leonardo DRS pegs fair value at $53.82 per share, comfortably above the last close of $34.51. This frames the recent pullback as a valuation gap rather than just a sentiment swing.

Leonardo DRS is materially increasing organic investment, with internal R&D and capital expenditures focused on tactical radars, infrared foundry, naval propulsion and capacity expansion. This can position the company to participate in higher value programs over time and support future earnings and margin profiles.

See why 20 investors see Leonardo DRS as 36% undervalued.

Result: Fair Value of $53.82 (UNDERVALUED)

Still, if revenue growth slows back toward the roughly 5.1% long term pace or backlog keeps slipping, the bullish Leonardo DRS valuation case could unwind quickly.

Find out about the key risks to this Leonardo DRS narrative.

Another View: Leonardo DRS Through The P/E Lens

Where the narrative leans on discounted cash flows and analyst fair values, the plain P/E math tells a cooler story. Leonardo DRS trades on 28.6x earnings, richer than close peers at 23x and above its own fair ratio of 22.3x, even though it is below the US Aerospace & Defense average of 31.5x.

That mix points to a stock that already prices in a fair amount of optimism while still carrying some valuation cushion versus the wider industry. The gap to the fair ratio suggests room for multiple compression if sentiment sours. The real question is which way investors think that P/E will drift next: toward peers or toward the fair ratio.

For a deeper look at what this price tag might mean in practice, including how peers and that fair ratio stack up, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Plenty in this Leonardo DRS story leans optimistic, so treat that as a prompt to move fast, test the numbers yourself, and pressure check the bullish angles. To see exactly what investors are excited about, go straight to the 4 key rewards

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