A Look At Science Applications International (SAIC) Valuation After Sector Optimism And Insider Buying

What sparked the latest move in SAIC shares?

Science Applications International (SAIC) caught investor attention after a competitor secured a large federal contract, which lifted sentiment across defense technology names. In addition, an Executive Vice President at SAIC added to their position through an insider purchase.

See our latest analysis for Science Applications International.

That sector wide optimism has come on top of a 5.93% 1 day share price return, with Science Applications International now trading at $107.22. The 1 year total shareholder return is a 4.63% decline and the 5 year total shareholder return sits at 20.62%. This suggests near term momentum has picked up even though longer term results have been steadier rather than explosive.

If this defense contract buzz has you watching government and military suppliers more closely, it could be a good moment to scan aerospace and defense stocks for other names catching fresh interest.

So after a modest 1 year total return decline, steady multi year gains, and shares trading below analyst targets and an intrinsic estimate, is SAIC quietly offering value now, or is the market already pricing in future growth?

Most Popular Narrative: 5.4% Undervalued

The most followed narrative puts Science Applications International's fair value at about $113.38, slightly above the last close at $107.22, and builds a detailed case around cash flows, margins, and contracting trends.

The analysts have a consensus price target of $116.0 for Science Applications International based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $130.0, and the most bearish reporting a price target of just $91.0.

Read the complete narrative.

Curious how modest revenue growth, easing margins, a shrinking share count, and a higher future P/E can still point to upside? The full narrative lays out the earnings path, the margin reset, and the valuation multiple that need to line up for that fair value to hold.

Result: Fair Value of $113.38 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside view faces real pushback from slower contract growth and tighter federal budgets, which could pressure both revenue and margins if conditions persist.

Find out about the key risks to this Science Applications International narrative.

Build Your Own Science Applications International Narrative

If you look at the numbers and come to a different conclusion, or simply like testing ideas yourself, you can build a custom view in minutes with Do it your way.

A great starting point for your Science Applications International research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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