Can DRS sustain its earnings growth into 2025?

**Leonardo DRS's prospects for sustaining earnings growth into 2025 appear positive**, considering the following points:

1. **Consistent Growth Trajectory**: DRS has demonstrated a consistent growth trajectory in its financial performance. Although the 3-year CAGR for net income is negative at -27.48%, and for diluted EPS at -34.77%, the company's total revenue has shown a positive 3-year CAGR of 9.59%. This indicates a improving trend in the company's revenue generation capacity.

2. **Recent Financial Performance**: In Q4 2024, DRS reported a net income Yoy growth of 20.27% with $89 million in net income and a total revenue Yoy growth of 5.94% with $981 million in revenue. These recent positive growths suggest a strong financial performance that could carry into the next year.

|code|Ticker|Name|Date|Net Income YoY|Net Income|market_code|
|---|---|---|---|---|---|---|
|DRS|DRS.O|Leonardo DRS|2024 Q1|141.66666666666669|2.9E7|185|
|DRS|DRS.O|Leonardo DRS|2024 Q2|8.571428571428571|3.8E7|185|
|DRS|DRS.O|Leonardo DRS|2024 Q3|21.27659574468085|5.7E7|185|
|DRS|DRS.O|Leonardo DRS|2024 Q4|20.27027027027027|8.9E7|185|

|code|Ticker|Name|Date|Total Revenue YoY|Total Revenue|market_code|
|---|---|---|---|---|---|---|
|DRS|DRS.O|Leonardo DRS|2024 Q1|20.913884007029875|6.88E8|185|
|DRS|DRS.O|Leonardo DRS|2024 Q2|19.904458598726116|7.53E8|185|
|DRS|DRS.O|Leonardo DRS|2024 Q3|15.5049786628734|8.12E8|185|
|DRS|DRS.O|Leonardo DRS|2024 Q4|5.939524838012959|9.81E8|185|

3. **Contract Awards and Strategic Investments**: DRS has secured significant contract awards, including a $16.9 million prototype project with the U.S. Army and has been awarded over $4 billion in contract awards. These contract wins, along with increased investment in internal R&D and capital expenditures, position the company well for continued growth.
4. **Market Position and Outlook**: DRS's focus on advanced defense technology positions it well in a sector with growing demand. The company's strategic shifts and investments in innovation are indicative of a forward-looking approach that could sustain growth.
5. **Financial Ratios**: DRS's P/E ratio stands at 43.7, which is relatively high, suggesting that the stock may be expensive compared to earnings. However, a P/S ratio of 2.88 and a P/B ratio of 3.64 indicate reasonable valuation based on sales and book value respectively. These ratios, along with a positive earnings outlook, could support the company's valuation and earnings growth.

|code|Ticker|Name|Date|P/E(TTM)|P/S|Price to Book Ratio|market_code|
|---|---|---|---|---|---|---|---|
|DRS|DRS.O|Leonardo DRS|20240415|29.722363|0|2.3650052965290325|185|
|DRS|DRS.O|Leonardo DRS|20240416|30.575229|0|2.4328677153677423|185|
|DRS|DRS.O|Leonardo DRS|20240417|30.660515|0|2.439653957251613|185|
|DRS|DRS.O|Leonardo DRS|20240418|30.205654|0|2.403460667204301|185|
|DRS|DRS.O|Leonardo DRS|20240419|29.779221|0|2.369529457784946|185|
|DRS|DRS.O|Leonardo DRS|20240422|29.779221|0|2.369529457784946|185|
|DRS|DRS.O|Leonardo DRS|20240423|30.29094|0|2.410246909088172|185|
|DRS|DRS.O|Leonardo DRS|20240424|30.575229|0|2.4328677153677423|185|
|DRS|DRS.O|Leonardo DRS|20240425|30.404656|0|2.4192952316|185|
|DRS|DRS.O|Leonardo DRS|20240426|30.80266|0|2.450964360391398|185|

6. **Dividend and Free Cash Flow**: DRS has a history of dividend payments, with a recent cash dividend of $0.09 per share. The company also reported $190 million in free cash flow for the full year of 2024, which is a positive indicator of its financial health and ability to sustain dividends and invest in growth.

In conclusion, while there are challenges, such as supply chain issues and potential program timing issues, the overall positive financial performance, strategic investments, and contract awards suggest that DRS is well-positioned to sustain its earnings growth into 2025.