MeritValue

Leonardo DRS, Inc.

DRSdata completeness 100%7 fiscal years on file
The thesis, from the filings

Leonardo DRS, Inc. earns about 12% on invested capital, comfortably above its ~9% cost of capital, but has diluted owners by 28% over 5 years — a real edge showing up in the numbers. The estimate methods put fair value between $8.21 and $42.28 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$2.88B1$2.69B2$2.83B3$3.23B3$3.65B3
Net income$154M4$405M5$168M6$213M6$278M6
Operating cash flow$178M7$33M8$205M9$271M9$366M9
Capital expenditure$60M10$65M11$60M12$85M12$139M12
Free cash flow (derived)$118M7−$32M8$145M9$186M9$227M9
Total debt$449M13$435M14$499M15$395M16$379M17
Cash & equivalents$240M18$306M19$467M20$598M21$647M21
Diluted shares210.0M215.1M264.2M267.7M268.7M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$101.6
your share of equity
Profit it earned you last year
$10.35
Free cash flow it threw off
$8.45
Debt you’d be carrying
$14.1

10 shares is a claim on $101.6 of net worth that earned you $10.35 and generated $8.45 of cash last year, against $14.1 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
12% avg · 5y
FY21 10%FY22 19%FY23 8%FY24 9%FY25 11%

It earned about 12% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
+28% shares · 5y

Share count is up 28% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 16% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $8.21 and $42.28 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$42.28
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$186M
DCF · Growth Exit 5Y
$23.57
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$186M
Earnings Power Value
$8.21
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$213M
  • growthAssumed0.0%
Graham Number
$15.34
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $23.57
The three cases
Bear0.0%$10.89
Base20.0%$23.57
Bull20.0%$23.57

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001628280-24-007359 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001628280-25-009248 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001833756-26-000013 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001628280-24-007359 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001628280-25-009248 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001833756-26-000013 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001628280-24-007359 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001628280-25-009248 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001833756-26-000013 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001628280-24-007359 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001628280-25-009248 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001833756-26-000013 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001628280-22-007409 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0001628280-23-009545 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0001628280-24-007359 (LongTermDebt)
  16. 10-K · period ending 2024-12-31 · accession 0001628280-25-009248 (LongTermDebt)
  17. 10-K · period ending 2025-12-31 · accession 0001833756-26-000013 (LongTermDebt)
  18. 10-K · period ending 2021-12-31 · accession 0001628280-23-009545 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2022-12-31 · accession 0001628280-24-007359 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2023-12-31 · accession 0001628280-25-009248 (CashAndCashEquivalentsAtCarryingValue)
  21. 10-K · period ending 2024-12-31 · accession 0001833756-26-000013 (CashAndCashEquivalentsAtCarryingValue)