DRS vs LPTH: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: DRS is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. DRS and LPTH share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined DRS and LPTH exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Leonardo DRS is a defense-technology company that designs and builds advanced electronics and systems for the US military and allied forces. A majority-owned subsidiary of Italy's Leonardo, the company focuses on areas where it holds differentiated technology: advanced sensing and electro-optical infrared systems, electric power and propulsion for naval vessels, force protection, computing and network systems, and electronic warfare. Its products include infrared sensors and targeting systems for vehicles and aircraft, power-conversion and propulsion equipment for Navy ships and submarines, and tactical computing and communications gear used across the battlefield. Leonardo DRS earns revenue primarily through long-cycle US Department of Defense contracts and programs, with a backlog of orders that provides multi-year visibility. The company benefits from positions on major programs such as next-generation naval power systems and ground-vehicle sensing, areas tied to military modernization priorities. After a 2022 merger that brought it public, Leonardo DRS trades on the Nasdaq and is headquartered in Arlington, Virginia, positioning itself as a pure-play, technology-focused defense supplier rather than a full platform prime.

Full DRS guide

LightPath Technologies designs and manufactures precision optics, with a specialty in the infrared. Its historical business was molded aspheric lenses and infrared components built from proprietary BlackDiamond chalcogenide glass, sold to camera makers, industrial customers and defence primes from plants in Orlando, Latvia and China. Three acquisitions changed what the company sells: Visimid brought embedded thermal camera engineering, G5 Infrared (closed February 2025) brought high-performance cooled infrared camera systems with existing programs of record, and the Amorphous Materials asset purchase in January 2026 added chalcogenide glass melting capacity for large-diameter optics. The result is a vertically integrated supplier that owns the glass, the lens, the assembly and, increasingly, the finished camera, which is why assemblies and modules grew to ~$8.4M of the ~$19.1M reported in fiscal third-quarter 2026 revenue.

Full LPTH guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• DRS drivers: Advanced sensing and electro-optics; Naval power and propulsion.
• LPTH drivers: Germanium substitution is a materials moat, not just a product line; Backlog conversion and the shift from components to systems.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Leonardo DRS depends heavily on the US defense budget and program funding, which are subject to political appropriations risk, continuing resolutions, and potential cuts. For LPTH, valuation is the first-order risk: at roughly $950M to $1.0B of market value against ~$63M of trailing twelve-month revenue, the stock trades near 15x to 16x sales while still reporting a trailing net loss of about $23M, so the price already discounts several years of backlog conversion going right.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick DRS if you believe its drivers more; LPTH if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the DRS and LPTH guides.

DRS. Leonardo DRS trades at a premium relative to some legacy defense names, reflecting its higher-growth, technology-focused portfolio in sensing and naval power and its margin-expansion potential. The financial profile features a multi-year backlog, improving margins as newer programs scale, and a small recently initiated dividend, though majority parent ownership limits the public float.

LPTH. LightPath runs a June fiscal year, so as of August 2026 the most recent reported period is fiscal third-quarter 2026, ended March 31, 2026, and fiscal fourth-quarter plus full-year fiscal 2026 results have not yet been published. Trailing twelve-month revenue of ~$63M therefore spans fiscal fourth-quarter 2025 (~$12.2M) plus the first nine months of fiscal 2026 (~$50.6M), against full fiscal 2025 revenue of ~$37.2M. Management has described a three-pillar strategy targeting in excess of $300M of annual revenue within five years, which is an ambition rather than guidance and sits far above both current revenue and current backlog.

Headline figures (approximate, early 2026): DRS shows revenue (ttm) ~$3 billion, revenue growth High-single-digit to low-double-digit, operating margin ~10-12%, targeted to expand, backlog Several billion dollars, multi-year visibility; LPTH shows revenue (ttm) ~$63M, up ~87% year over year, latest quarter (fiscal q3 2026, ended march 31, 2026) revenue ~$19.1M, up ~109%; gross margin ~36%, order backlog ~$110.6M at March 31, 2026, up ~196% from ~$37.4M at June 30, 2025, profitability adjusted EBITDA ~$1.1M in fiscal Q3 2026 (third straight positive quarter); TTM net loss ~$23M.

DRS and LPTH are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined DRS and LPTH exposure against your real portfolio. It is not an investment adviser.