Market Pulse59Neutral

Leonardo DRS, Inc.Opportunity Rank #247(DRS) Intrinsic Value & DCF Analysis (2026)

Sector: Industrials

Current Price

$41.44

Last updated: May 08, 2026

Price vs Intrinsic Value

$41.44
Price
$35.15
Intrinsic Value
Overvalued by 15%MOS: $28.12

Fundamental Score

57/100
Neutral

Weighted across 6 signals

Narrative Score

64/100
Improving

+5 vs previous

Trend Score

47/100
Neutral

As of 2026-05-08

The intrinsic value of Leonardo DRS, Inc. (DRS) is estimated at $35.15 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $41.44, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 2.65% long-term growth rate and a 9.00% discount rate (calculated: 7.70%), reflecting expected future free cash flow and cost of capital.

The intrinsic value of Leonardo DRS, Inc. (DRS) is estimated at $35.15 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $41.44, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 2.65% long-term growth rate and a 9.00% discount rate (calculated: 7.70%), reflecting expected future free cash flow and cost of capital.

Valuation Details

$35.15
▼ -15.18% downside
20% margin of safety: $28.12
Years: 10Growth Rate: 2.65%
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Capital Efficiency

Average Quarterly ROIC
2.31%
Cost of Capital (estimated)8%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

57/100
NeutralWeighted across 6 signals
DCF Discount
15.2% premium to price
25
FCF Yield
5.5% trailing FCF yield
88
ROIC vs WACC
ROIC 2.3% vs WACC 8.0% (0.3x)
14
Net Debt / FCF
Net cash position
100
Buybacks
Share count flat
50
FCF CAGR (5Y)
27.5% 5Y FCF CAGR
100
Strengths: FCF Yield, Net Debt / FCF. Concerns: DCF Discount, ROIC vs WACC.

Narrative Details

64/100
Improving
+5 vs previous · +1 new driversVs 6-Month Baseline:High (100th pct)Weighted across 5 recent drivers
Trend: Improving upConfidence: 72%Updated: 16h ago
Sources: 23 (21 News · 2 Analyst)
Drivers(last 30 days)
Upgrade headlines+0.6
Earnings beat+0.4
17 news sentiment+0.4
2 regulatory scrutiny+0.1
2 analyst reiterations0.0

Trend Details

47/100
NeutralAs of 2026-05-08311 daily bars used
Distance from 52-Week High-14.6%
6M Relative Strength vs SPY+6.8%
Price vs 50 EMA-3.3%
Price vs 21 EMA40 · -1.7%
Price vs 50 EMA34 · -3.3%
21 EMA vs 50 EMA37 · -1.6%
3M RS vs SPY48 · -0.6%
6M RS vs SPY68 · +6.8%
Distance from 52W High71 · -14.6%

Investment Coach

Updated 20h ago
WATCHConfidence: 48%
Thesis
Leonardo DRS, Inc. shares appear fully priced with a current price above the estimated fair value, and while fundamentals are constructive with a healthy free cash flow yield of 5.5%, returns are trailing the estimated cost of capital. The narrative trend is improving, suggesting potential for future positive developments.
Key Risk
The key risk is that the company's return on invested capital remains below its weighted average cost of capital, which could limit value creation for shareholders.
Signals To Watch
  • Price moving to at least a mid-teens discount to fair value.
  • Sustained improvement in ROIC versus WACC spread.
  • Meaningful shifts in the narrative trend and score direction.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 2.65%5 Year CAGR: 20.75%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018200820072006
$611$505$356$265$98$238$181$212$145$283$251$200

How Intrinziq Estimates Fair Value

Intrinziq estimates Leonardo DRS, Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

Leonardo DRS, Inc.Industrials

Leonardo DRS, Inc., together with its subsidiaries, provides defense products and technologies in the land, air, sea, space, cyber and security, and commercial domains for military applications. It operates in two segments, Advanced Sensing and Computing, and Integrated Mission Systems. The company offers advanced sensor technologies, including infrared systems and sensors for threat detection and situational awareness; uncooled infrared systems and brownout solutions; airborne, ground vehicle mounted, and dismounted soldier electronic warfare (EW) systems; and EW software and training systems, and intelligence solutions. It also provides computing systems for ground vehicles, ships, and submarines; network and data distribution applications; sensor systems; and networked computing infrastructure on military platform. In addition, the company offers force protection systems, such as solutions for counter-unmanned aerial systems, short-range air defense systems, and active protection systems; and power control, distribution, conversion, and propulsion systems, as well as hybrid electric drive propulsion systems, energy storage, gas turbine packages, nuclear instrumentation and controls, and thermal management and refrigeration equipment. It serves the U.S. military, aerospace and defense prime contractors, government intelligence agencies, and international military customers. The company was founded in 1969 and is based in Arlington, Virginia.