Science Applications International (SAIC): Valuation Check After Higher EPS Guidance and AI Integration Boost Confidence

Science Applications International (SAIC) just raised its full year earnings and nudged revenue guidance higher, signaling management feels more confident about the trajectory even as government spending remains a headwind.

See our latest analysis for Science Applications International.

The guidance bump has helped the recent 1 month share price return of 9.87% stand out against a softer year to date share price return of minus 10.25% and a 1 year total shareholder return of minus 10.12%. This suggests improving sentiment, even if the longer term picture remains mixed.

If this kind of steady, contract driven story appeals, it could be worth seeing what else is on offer among aerospace and defense stocks right now.

With shares still trading at a chunky discount to both analyst targets and our intrinsic value estimate despite modest growth, is SAIC quietly offering a mispriced cash return story, or is the market correctly discounting its future pipeline?

Most Popular Narrative: 11.2% Undervalued

With the narrative fair value near $113.38 against a last close of $100.66, the framework points to upside while assuming only modest growth and margins.

The company's strategic focus on differentiated, high growth capabilities in areas such as mission integration, digital transformation, and advanced IT modernization positions SAIC to benefit from the government's ongoing push to update legacy systems. This is likely to accelerate top line growth as procurement normalizes. A robust pipeline and strong book to bill ratios, along with sustained win rates in recompetes and pending award backlogs, provide significant building blocks for revenue recovery and long term expansion once current government funding delays and efficiency initiatives subside.

Read the complete narrative.

Curious how slow headline growth can still justify upside potential? This narrative leans on resilient margins, disciplined capital returns, and a future earnings multiple that challenges today’s muted expectations. Want to see exactly how those levers are modeled?

Result: Fair Value of $113.38 (UNDERVALUED)

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

However, mounting federal budget uncertainty and intensifying competition for modern IT contracts could delay awards and pressure margins, which may challenge the upside case.

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

Build Your Own Science Applications International Narrative

If you see the story differently or want to stress test your own assumptions using the same tools, you can build a custom view in minutes: Do it your way.

A great starting point for your Science Applications International research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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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