RESTON, VA - Leidos (NYSE:LDOS), a Fortune 500® innovation company, has secured a contract from the U.S. Department of Health and Human Services to modernize the Organ Procurement and Transplant Network (OPTN). The contract, awarded through the Health Resources and Services Administration (HRSA), stands as a multiple-award, indefinite delivery/indefinite quantity agreement with a potential value of $235 million. It includes a base period of one year, with the possibility of extension through four additional one-year option periods.
The OPTN is a pivotal system that provides essential information for organ transplants to patients, donors, and healthcare providers. The modernization effort spearheaded by Leidos aims to enhance transparency, performance, governance, and efficiency in the donation and transplantation process. This initiative is set to impact over 100,000 individuals on the national organ transplant waitlist, representing the most significant reforms of the OPTN in nearly 40 years.
Liz Porter, president of Leidos Health & Civil Sector, emphasized the importance of the modernization project, stating, "Every 10 minutes, someone is added to the transplant waiting list." She highlighted the reliance of patients, donors, families, and physicians on the OPTN for timely and accurate data to facilitate life-saving transplants. Porter added that the improved access to information and deployment of modernized tools are crucial for enabling critical decision-making in the transplantation process.
Leidos brings to the table its extensive experience in technology, health systems, and large-scale electronic health record implementations to collaborate effectively with HRSA on the OPTN upgrade.
Headquartered in Reston, Virginia, Leidos reported annual revenues of approximately $15.4 billion for the fiscal year ended December 29, 2023. The company has a global workforce of 48,000 and specializes in addressing complex challenges in national security and health for heavily regulated industries.
This article is based on a press release statement.
In other recent news, Leidos Holdings (NYSE:LDOS) has been the subject of several noteworthy developments. JPMorgan has revised its price target for the company to $205, up from $185, citing strong performance trends in the Federal IT sector, particularly in the Health & Civil sector. The firm retains an Overweight rating on the stock, indicating a potential for growth in Leidos' other business divisions.
The company has also secured a significant contract, potentially worth up to $235 million, to modernize the Organ Procurement and Transplant Network (OPTN). This effort aims to enhance the transparency, performance, governance, and efficiency of the organ donation and transplantation process.
Leidos reported robust financial performance for the third quarter of 2024, marking its sixth consecutive quarter of growth. The company posted a record adjusted EBITDA margin of 14.2%, a 44% increase in adjusted diluted EPS, and a 7% revenue increase from the previous year, reaching $4.19 billion. As a result, Leidos raised its 2024 revenue guidance to between $16.35 billion and $16.45 billion.
The company also announced a quarterly dividend increase to $0.40 per share and secured $8.1 billion in net bookings, resulting in a total backlog of $40.6 billion. Despite challenges in the National Security and Digital segment, the Health & Civil segment continues to perform strongly, particularly in managed health services. These recent developments highlight Leidos' sustained high performance and potential for continued growth.
InvestingPro Insights
Leidos' recent contract win with the U.S. Department of Health and Human Services aligns well with the company's strong market position and financial performance. According to InvestingPro data, Leidos boasts a market capitalization of $26.43 billion, reflecting its significant presence in the Professional Services industry. The company's revenue for the last twelve months as of Q3 2024 stood at $16.28 billion, with a healthy revenue growth of 7.4% over the same period.
An InvestingPro Tip highlights that Leidos has raised its dividend for 6 consecutive years, demonstrating a commitment to shareholder returns. This is particularly noteworthy given the company's involvement in large-scale, long-term government contracts like the OPTN modernization project.
Another relevant InvestingPro Tip indicates that 8 analysts have revised their earnings upwards for the upcoming period. This positive sentiment from analysts could be influenced by Leidos' recent contract wins and strong market position in critical sectors like healthcare and national security.
The company's P/E ratio of 22.38 suggests that investors are willing to pay a premium for Leidos' shares, possibly due to its strong market position and growth prospects in high-value government contracts. Additionally, Leidos' operating income margin of 10.83% for the last twelve months as of Q3 2024 indicates efficient operations and profitability.
For investors seeking more comprehensive insights, InvestingPro offers 17 additional tips for Leidos, providing a deeper understanding of the company's financial health and market position.
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