Telos (TLS) Stock Forecast & Price Target

Telos Corporation's positive outlook is bolstered by an expected increase in revenue from existing contracts, which is projected to reach approximately $70 million in CY25 due to contract extensions and scope expansions. The Security Solutions segment has become a significant driver of revenue, contributing over 83% to the company's overall revenue in the latest quarter, a marked increase from 50% a year ago. Additionally, Security Solutions demonstrated a year-over-year revenue growth of 6% to $21.9 million, exceeding street estimates and benefiting from the strong performance of the TSA PreCheck and the resolution of the DMDC program, which has begun generating significant revenue.

Telos Corporation has experienced a decline in key financial metrics, notably a reduction in its CY25 revenue forecast to $139 million, reflecting a cautious demand environment and contract dynamics affecting sales. The Security Solutions segment has seen a significant drop in gross margins, decreasing 730 basis points year-over-year to 44.1%, and is anticipated to face further margin pressures due to shifting product mix and rising costs. Furthermore, the Secure Networks segment reported a substantial 78% year-over-year revenue decline, contributing to overall concerns over delayed revenue recognition and weaker first-quarter guidance that fell short of consensus expectations.