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  "documentTitle": "Leidos Holdings, Inc. (LDOS)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeSlug": "short_seller",
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  "presentationDate": "2021-02-16 00:00:00",
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  "notes": "The slide argues that Leidos's premium valuation is unwarranted due to accounting distortions and management issues.",
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      "kind": "callout",
      "text": "Leidos trades at a premium to peers on EV / OCF... This premium is unwarranted for a weak management team that we believe has grossly misled shareholders.",
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      "text": "Given the distortions in Leidos income statement metrics, we believe the best way to value the Company is on its operating cash flow (OCF).",
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      "text": "operating cash flow: -56%",
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      "text": "Given the distortions in Leidos income statement metrics, we believe the best way to value the Company is on its operating cash flow (OCF). Given the numerous pull forward effects in 2020, we expect cash flow to decline greater than expected, notably from an unaccounted rise in deferred revenue that the Street has failed to model.",
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      "kind": "source-note",
      "text": "1) $512m of cash and equivalents adjusted for $166m of outstanding payments and $215m cash payment for 1901 Group Acquisition 2) Pro forma for $549m of operating leases and $42m of MSA litigation liability Note: Downside based on $107.85/sh",
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      "text": "Valuation table showing 13x-16x OCF multiples, resulting in $47.00-$70.80 price targets and -56% to -34% downside.",
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      "kind": "title",
      "text": "Spruce Point Estimates 35% – 60% Downside",
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