Is Leonardo DRS, Inc. overvalued or undervalued?

As of 19 September 2025, the valuation grade for Leonardo DRS, Inc. has moved from fair to attractive, indicating a more favorable assessment of its market position. The company appears to be undervalued, especially when considering its P/E ratio of 49, which is higher than peers like Textron, Inc. at 17.37 and Huntington Ingalls Industries, Inc. at 27.01. Additionally, the EV to EBITDA ratio stands at 28.96, while the PEG ratio is 1.96, suggesting potential for growth relative to its valuation.
In comparison to its peers, Leonardo DRS, Inc. has a competitive edge with a more attractive valuation grade and a lower PEG ratio than Hexcel Corp., which is classified as very expensive at a PEG of 0.595. Notably, the company's stock has significantly outperformed the S&P 500 over multiple periods, with a year-to-date return of 28.26% compared to the S&P 500's 13.31%, reinforcing the argument for its undervaluation.