7→8: FY2025 10-K: $49B backlog (robust), 87% US government revenue, defense modernization secular tailwind. DCF P(above) 93.4%, DCF FV $225 vs $169 = 33% upside. Analyst 25.7% upside. Below 200dma is a technical concern but DCF and analyst both strongly bullish. Defense modernization + AI/tech modernization of government contracts is an identified catalyst with multi-year visibility. Rubric: thesis ✓ + catalyst ✓ + upside ≥20% ✓ + DCF P(above) >40% ✓ — all criteria met.
Fair Value Distribution — percentile bands
93.7% of simulations place fair value above current price
WHAT IS PRICED IN
Revenue-Based Reverse DCF
-2.0%/yr
±3.6% · revenue growth to justify current price
FCF-Based Reverse DCF
-1.5%/yr
±3.0% · FCF growth to justify current price
THE GAP
Market pricing margin compression or rising capex
KEY VALUE DRIVERS
Spearman correlation — what moves this valuation most
$49B backlog, 87% US government revenue, DOGE bear case overstated (mission-critical contracts), DCF FV=$225 vs $169 (33% upside), defense modernization + AI government contract secular tailwind.
Below 200dma (-4 tech score), MACD negative, below both MAs. Caution regime makes this a WAIT. DOGE budget risk is real even if overstated. RSI 41 — no setup yet.
Defense budget cuts >10%, major contract cancellations, DOGE broader mandate hitting IT services
Updated Mar 18
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