Leonardo DRS, Inc. (DRS) DCF Valuation
Why we don't show a single “fair value” for DRS
Even the optimistic scenario of a conservative trailing-FCF model ($21.81) sits far below today's price — the market is paying for growth and durability beyond what this model structure captures. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$45.74 is justified only if free cash flow grows about +33.4% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 2.1%/yr | 8.5% | $11.92 |
| Base case | 5.1%/yr | 7.5% | $15.73 |
| Optimistic | 8.1%/yr | 6.5% | $21.81 |
| Analyst DCF (FMP) | independent reference — different model | $38.40 | |
Current Price
$45.74
Market-Implied Growth
+33.4%/yr
vs +5.1% 5Y actual
Base-Case Model Value
$15.73
model output — not a price target
DRS DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for DRS (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $165.5M · 0.27B shares · net cash $395.0M
Estimated Fair Value
$17.12
-62.6% vs $45.74
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.1%/yr FCF growth and 10-year horizon fixed. Green = above today's $45.74; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $22.71 | $24.96 | $27.96 | $32.16 | $38.47 |
| 6.5% | $18.29 | $19.57 | $21.18 | $23.25 | $26.00 |
| 7.5% | $15.35 | $16.15 | $17.12 | $18.30 | $19.78 |
| 8.5% | $13.25 | $13.79 | $14.42 | $15.16 | $16.05 |
| 9.5% | $11.69 | $12.07 | $12.49 | $12.99 | $13.57 |
About Leonardo DRS, Inc.
Established in Arlington, Virginia, in 1969, Leonardo DRS, Inc. is a leading supplier of advanced defense products and technologies. The company's diverse portfolio addresses military requirements across various environments, including land, air, sea, space, and cybersecurity, with additional applications in the commercial sector. Its operations are organized into two primary divisions: Advanced Sensing and Computing, and Integrated Mission Systems. DRS provides sophisticated sensing solutions, such as infrared systems for threat identification and improving situational awareness, alongside uncooled infrared technologies and systems designed to mitigate brownout conditions. Their electronic warfare (EW) capabilities encompass airborne, vehicle-mounted, and soldier-borne systems, supported by specialized EW software, training tools, and intelligence services. Furthermore, Leonardo DRS develops essential computing systems for military platforms like ground vehicles, ships, and submarines. These offerings include robust network and data distribution applications, integrated sensor systems, and resilient networked computing infrastructure. The company also specializes in force protection, delivering solutions for counter-unmanned aerial systems (C-UAS), short-range air defense, and active protection systems. Additionally, DRS is a key provider of power management and propulsion technologies, offering systems for power control, distribution, conversion, and propulsion—including hybrid electric drive systems, energy storage solutions, gas turbine packages, nuclear instrumentation and controls, and thermal management and refrigeration equipment. Leonardo DRS serves a broad client base, which includes the U.S. military, major aerospace and defense contractors, government intelligence agencies, and international armed forces.
- Sector
- Industrials
- Industry
- Aerospace & Defense
- CEO
- John A. Baylouny