Aerospace and defense company Leonardo DRS (NASDAQ:DRS) will be reporting earnings tomorrow before the bell. Here’s what investors should know.

Leonardo DRS beat analysts’ revenue expectations by 4.4% last quarter, reporting revenues of $812 million, up 15.5% year on year. It was an exceptional quarter for the company, with an impressive beat of analysts’ EBITDA estimates.

Is Leonardo DRS a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Leonardo DRS’s revenue to be flat year on year at $935.3 million, slowing from the 12.9% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.35 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Leonardo DRS has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Leonardo DRS’s peers in the defense contractors segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Mercury Systems delivered year-on-year revenue growth of 13%, beating analysts’ expectations by 23.9%, and CACI reported revenues up 14.5%, topping estimates by 3.4%. Mercury Systems traded up 18.3% following the results while CACI was down 9.3%.

Read our full analysis of Mercury Systems’s results here and CACI’s results here.

Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good 2024. An economic soft landing (so far), the start of the Fed's rate cutting campaign, and the election of Donald Trump were positives for the market, and while some of the defense contractors stocks have shown solid performance, the group has generally underperformed, with share prices down 4.2% on average over the last month. Leonardo DRS is down 20% during the same time and is heading into earnings with an average analyst price target of $37.13 (compared to the current share price of $29.39).

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