Why Leonardo DRS Stock Trounced the Market Today

By Eric Volkman – Feb 24, 2026 at 7:22PM ESTKey PointsIt handily beat the average analyst projections for revenue and profitability in its fourth quarter of 2025.It's riding a wave of increased defense spending.NASDAQ: DRSLeonardo DRSMarket Cap$12BToday's Changeangle-down(-3.33%) $1.46Current Price$42.36Price as of February 25, 2026 at 4:00 PM ETA tense geopolitical environment in certain parts of the world is boosting the business of defense sector companies like this one.Leonardo DRS (DRS 3.33%) was a defense sector stock of choice for many market participants on the second trading day of the week. The company's shares zoomed almost 15% higher on the back of a quarterly and annual earnings report that featured robust growth numbers. A solid fourth quarter Leonardo DRS's fourth quarter saw the company earn $1.06 billion in revenue, up 8% year over year. Net income not in accordance with generally accepted accounting principles (GAAP) rose at a higher pitch, increasing by 13% to $114 million, or $0.42 per share. Image source: Getty Images. On average, according to Zack's, analysts tracking the stock were expecting only $993 million on the top line for Leonardo DRS, and $0.37 in non-GAAP (adjusted) net profit. In its earnings release, the company attributed the notable improvements in fundamentals to strong demand for products like tactical radars and advanced infrared sensing. ExpandNASDAQ: DRSLeonardo DRSToday's Change(-3.33%) $-1.46Current Price$42.36Key Data PointsMarket Cap$12BDay's Range$41.75 - $44.0252wk Range$28.17 - $49.31Volume2.3MAvg Vol1.1MGross Margin23.22%Dividend Yield0.82% Full steam ahead The trailing results for Leonardo DRS were impressive, while its guidance for the entirety of 2026 was also encouraging. The company estimates its revenue will be $3.85 billion to $3.95 billion, which would be notably above the under $3.65 billion of 2025. Similarly, adjusted net income is expected to be $1.20 to $1.26 per share, against the actual result of $1.15 last year. The consensus analyst top-line forecast is $3.82 billion, and the profitability forecast is 1.26 per share. These are prosperous times for the defense industry, particularly given the U.S. military's buildup in the Middle East lately. I feel this country will remain on a fairly aggressive footing for some time, so I think Leonardo DRS and its veteran sector peers will continue to do well.Read NextOct 30, 2025 •By Eric VolkmanWhy Leonardo DRS Stock Was Tumbling on ThursdayOct 29, 2025 •By Rich SmithWhy Leonardo DRS Stock Dropped TodayDec 8, 2022 •By Lou WhitemanWhy Leonardo DRS Stock Climbed This WeekAbout the AuthorEric Volkman is a contributing Motley Fool finance and stock market analyst. Previously, Eric was an equities analyst at European investment bank Raiffeisen Capital and Investment. He’s also been a freelance finance writer since 1995. He studied at Susquehanna University.TMFVolkmanStocks MentionedLeonardo DRSNASDAQ: DRS$42.36 (3.33%) $1.46*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.