Science Applications (SAIC) AI Stock Analysis

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Science Applications

(NASDAQ:SAIC)

Rating:68Neutral

Price Target:

$113.00

▲(7.18%Upside)

Science Applications International Corporation exhibits strong financial health and stable earnings growth, supported by a robust book-to-bill ratio. However, technical indicators suggest bearish momentum, and challenges with procurement and margin pressures were noted. These factors collectively result in a moderate stock score.

Positive Factors

Bookings and Revenue

SAIC posted a 1Q quarterly B2B of 1.3x and highlighted approximately $2B in bookings since the start of the new quarter, indicating a strong start to F2Q bookings.

Contract Extensions

There is no major recompete risk with the recent extension on the Vanguard contract.

Financial Guidance

SAIC bumped up its multi-year targets, indicating long-term confidence in its growth.

Negative Factors

Growth Uncertainty

Despite trading at a significant discount to peers, there is a lack of catalyst for a re-rating due to uncertainty around near-term growth.

Margin Challenges

SAIC needs margins to step up meaningfully to hit full-year guidance.

Organic Growth Challenges

SAIC's organic growth is expected to decline, facing challenges from recompete losses and program transitions.

Science Applications (SAIC) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.94B

Dividend Yield1.4%

Average Volume (3M)652.35K

Price to Earnings (P/E)14.8

Beta (1Y)0.35

Revenue Growth3.39%

EPS Growth-16.78%

CountryUS

Employees24,000

SectorTechnology

Sector Strength84

IndustryInformation Technology Services

Share Statistics

EPS (TTM)1.92

Shares Outstanding46,872,795

10 Day Avg. Volume936,183

30 Day Avg. Volume652,350

Financial Highlights & Ratios

PEG Ratio1.49

Price to Book (P/B)3.40

Price to Sales (P/S)0.00

P/FCF Ratio11.35

Enterprise Value/Market Cap1.42

Enterprise Value/Revenue0.24

Enterprise Value/Gross Profit7.92

Enterprise Value/Ebitda2.68

Forecast

1Y Price Target

$124.00

Price Target Upside17.61% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Science Applications Business Overview & Revenue Model

Company DescriptionScience Applications International Corporation (SAIC) is a leading provider of engineering, digital, and IT solutions primarily serving the U.S. government, including the Department of Defense, intelligence community, and federal civilian agencies. The company specializes in offering technology integration, logistics, and supply chain management solutions, as well as advanced data analytics and cybersecurity services.

How the Company Makes MoneySAIC makes money through government contracts and service agreements, primarily with U.S. federal agencies. The company earns revenue by providing technology and systems integration services, IT modernization, and digital transformation solutions. Key revenue streams include long-term contracts for engineering and logistics services, as well as maintenance and support agreements. Partnerships with technology firms and subcontractors also enhance SAIC's ability to deliver comprehensive solutions, contributing to its earnings. The company's strong focus on government clients ensures a stable revenue base, leveraging its expertise in defense and intelligence operations.

Science Applications Earnings Call Summary

Earnings Call Date:Jun 02, 2025

(Q1-2026)

% Change Since: -8.75%|

Next Earnings Date:Sep 04, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a balanced mix of positive developments and challenges. While there are strong points in defense spending requests, business development, and a robust pipeline, procurement delays, cash flow issues, and margin pressures pose concerns.

Q1-2026 Updates

Positive Updates

Solid Defense Spending Request

The administration proposed a 13% increase in defense spending, which includes additional funding beyond the request, emphasizing the Navy, Air Force, and Space Force.

Strong Business Development

Net bookings of $2.4 billion for a book-to-bill ratio of 1.3, including significant contracts such as a $55 million Space Development Agency role and a two-year extension on the Department of State Vanguard program.

Civilian Budget Support

Over $1 billion additional budget for the Department of Transportation and stable funding for the Department of State IT operations, Department of Treasury tech improvements, and Department of Veterans Affairs health record modernization.

Optimistic Pipeline and Backlog

A backlog of pending awards at approximately $20 billion, supporting the goal of achieving 1.2 trailing twelve-month book-to-bill in the coming quarters.

Revenue Growth and Guidance

Reported revenue of $1.877 billion, a 2% growth, with a full-year revenue guidance range of $7.6 billion to $7.75 billion, representing approximately 2.5% organic growth at the midpoint.

Negative Updates

Procurement Delays

Higher rates of turnover among customers are contributing to procurement delays, impacting the award timelines.

Negative Free Cash Flow

Free cash flow was negative $44 million due to the timing of receivables on two programs, with approximately $70 million shifting out of the first quarter.

Margin Pressure

First-quarter adjusted EBITDA margin was 8.4%, impacted by higher costs on a fixed price program in the space business and timing of investments.

Challenges with Army Budget

Potential challenges with the Army's budget outlook, although balanced by comparable revenue levels across the Department of Defense branches.

Company Guidance

During the Science Applications International Corporation fiscal year 2026 Quarter One earnings call, several key metrics and guidance points were discussed. The company reported first-quarter revenue of $1.877 billion, marking a growth of approximately 2% compared to the previous year. Adjusted EBITDA was noted at $157 million, with an adjusted EBITDA margin of 8.4%. The company also highlighted a book-to-bill ratio of 1.3, with net bookings of $2.4 billion for the quarter. Looking ahead, the company provided guidance for fiscal year 2026, projecting revenues in the range of $7.6 billion to $7.75 billion, indicating an organic growth rate of approximately 2.5% at the midpoint. Adjusted EBITDA margins are expected to range from 9.4% to 9.6%. Additionally, the company reiterated its full-year adjusted diluted earnings per share guidance of $9.10 to $9.30, alongside a free cash flow projection of $510 million to $530 million. Despite challenges, such as procurement delays and government efficiency initiatives, the company remains optimistic about achieving its growth targets, supported by a robust pipeline of pending awards and a strategic focus on mission and enterprise IT solutions.

Science Applications Financial Statement Overview

Summary

Science Applications exhibits solid financial health with strong operating margins and cash flow efficiencies. The firm maintains a stable leverage profile, though revenue growth and asset management could be optimized further for enhanced performance.

Income Statement

Positive

The company shows a stable gross profit margin, indicating cost management efficiency, with a slight improvement in net profit margin. EBIT and EBITDA margins are robust, reflecting solid operational performance. However, the revenue growth rate is modest, suggesting steady but not aggressive expansion.

Balance Sheet

Positive

The balance sheet reflects a moderate debt-to-equity ratio, indicating a balanced leverage approach. ROE is reasonable, demonstrating effective equity utilization. The equity ratio is stable, though there's room for improvement in asset management.

Cash Flow

Positive

The company has demonstrated strong free cash flow growth, supported by consistent operating cash flow. Ratios of cash flows to net income are healthy, showcasing efficient cash management and conversion of profits into cash.

TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
7.51B	7.48B	7.44B	7.70B	7.39B	7.06B
	Gross Profit
888.00M	892.00M	872.00M	888.00M	859.00M	792.00M
	EBIT
553.00M	563.00M	741.00M	501.00M	462.00M	390.00M
	EBITDA
682.00M	694.00M	882.00M	650.00M	628.00M	572.00M
	Net Income Common Stockholders
353.00M	362.00M	477.00M	300.00M	277.00M	209.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
47.00M	56.00M	94.00M	109.00M	106.00M	171.00M
	Total Assets
5.21B	5.25B	5.31B	5.54B	5.75B	5.72B
	Total Debt
2.44B	2.39B	2.25B	2.53B	2.71B	2.72B
	Net Debt
2.39B	2.34B	2.15B	2.42B	2.60B	2.55B
	Total Liabilities
3.71B	3.67B	3.53B	3.84B	4.12B	4.17B
	Stockholders Equity
1.50B	1.58B	1.78B	1.69B	1.62B	1.54B
Cash Flow		Free Cash Flow
466.00M	458.00M	369.00M	507.00M	482.00M	709.00M
	Operating Cash Flow
496.00M	494.00M	396.00M	532.00M	518.00M	755.00M
	Investing Cash Flow
-43.00M	-35.00M	314.00M	-36.00M	-292.00M	-1.23B
	Financing Cash Flow
-456.00M	-498.00M	-725.00M	-493.00M	-301.00M	464.00M

Science Applications Technical Analysis

Technical Analysis Sentiment

Negative

Last Price105.43

Price Trends

50DMA

115.14

Negative

100DMA

110.57

Negative

200DMA

120.02

Negative

Market Momentum

MACD

-3.76

Positive

RSI

37.90

Neutral

STOCH

67.79

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAIC, the sentiment is Negative. The current price of 105.43 is below the 20-day moving average (MA) of 110.70, below the 50-day MA of 115.14, and below the 200-day MA of 120.02, indicating a bearish trend. The MACD of -3.76 indicates Positive momentum. The RSI at 37.90 is Neutral, neither overbought nor oversold. The STOCH value of 67.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SAIC.

Science Applications Risk Analysis

Science Applications disclosed 30 risk factors in its most recent earnings report. Science Applications reported the most risks in the "Legal & Regulatory" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Science Applications Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PEGA	80 Outperform	$8.46B	48.06	39.29%	0.12%	14.29%	151.38%
PSN	77 Outperform	$7.45B	18.87	17.75%	―	16.61%	1279.09%
CACI	75 Outperform	$9.91B	21.27	13.48%	―	14.16%	22.25%
WEX	70 Outperform	$4.71B	17.72	24.37%	―	0.90%	26.13%
SAIC	68 Neutral	$4.94B	14.76	21.63%	1.40%	3.39%	-16.78%
BILL	68 Neutral	$4.27B	482.28	0.97%	―	14.52%	―
Sector *	62 Neutral	$11.97B	10.29	-7.47%	2.99%	7.32%	-8.06%

* Technology Sector Average

Performance Comparison

SAIC

Science Applications

105.00

-8.66

-7.62%

CACI

Caci International

446.24

15.93

3.70%

PEGA

Pegasystems

100.10

43.30

76.23%

WEX

143.39

-27.28

-15.98%

PSN

Parsons

69.21

-7.61

-9.91%

BILL

Bill.com Holdings

41.99

-6.64

-13.65%

Science Applications Corporate Events

Executive/Board ChangesShareholder Meetings

Science Applications Holds Virtual Annual Stockholders Meeting

Neutral

Jun 9, 2025

On June 4, 2025, Science Applications International Corporation held its virtual Annual Meeting of Stockholders, where 82.7% of the outstanding shares were represented. During the meeting, all nominees to the Board of Directors were elected for one-year terms, the executive compensation was approved in a non-binding vote, and Ernst & Young LLP was ratified as the independent registered public accounting firm for the fiscal year ending January 30, 2026.

The most recent analyst rating on (SAIC) stock is a Buy with a $155.00 price target. To see the full list of analyst forecasts on Science Applications stock, see the SAIC Stock Forecast page.

Dividends

SAIC Declares Cash Dividend for Shareholders

Positive

May 30, 2025

On May 29, 2025, SAIC’s Board of Directors declared a cash dividend of $0.37 per share, payable on July 25, 2025, to stockholders of record on July 11, 2025. This decision reflects the company’s ongoing commitment to providing shareholder value, with plans to continue quarterly dividend payments, subject to quarterly board evaluations based on earnings, financial condition, and capital requirements.

The most recent analyst rating on (SAIC) stock is a Buy with a $155.00 price target. To see the full list of analyst forecasts on Science Applications stock, see the SAIC Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.