Update shared on09 Sep 2025
Fair value Decreased 3.78%Science Applications International’s fair value has been revised down to $116.00 as analysts factor in weaker revenue outlooks, ongoing policy and budget uncertainty in the federal sector, and increased risk of prolonged margin slowdown despite near-term profitability support from one-time items.
Analyst Commentary
- Revenue outlook has weakened due to on-contract growth challenges and persistent market headwinds, leading to “meaningfully” cut sales forecasts and guidance reductions.
- Organic revenue declined in Q2 and full-year guidance was reduced further, with risk of multi-year revenue and margin slowdown driven by shifting government priorities and funding reallocations.
- Ongoing policy and budget uncertainty in the federal sector is prompting cautious management commentary compared to peers and heightening investor uncertainty.
- While Q2 results and recent earnings calls failed to impress, bullish analysts view SAIC as an attractive value play, expecting the stock to benefit from eventual improvements in award wins and execution.
- Profitability outlook saw a near-term upward revision due to one-time tax items, but investors await more concrete actions on cost reductions in coming quarters.
What's in the News
- SAIC repurchased 935,540 shares for $106 million, completing the buyback of 2,802,444 shares (5.85%) for $312.29 million under the December 2024 authorization.
- Fiscal 2026 revenue guidance lowered to $7.25–$7.325 billion from previous $7.60–$7.75 billion.
- Awarded $202 million contract to provide modernized virtual and synthetic training environments for the U.S. Navy, supporting training for 19 commands through various live and virtual methods.
- Announced multi-year “AI at the Edge” alliance with Google Public Sector, leveraging Google Distributed Cloud for secure, scalable tactical edge solutions and training 1,000 SAIC personnel in Google Cloud.
- Awarded $928 million, five-year HOPE 2.0 contract to provide RDT&E mission engineering services for the U.S. Air Force TENCAP, accelerating delivery of advanced prototypes across DoD missions.
Valuation Changes
Summary of Valuation Changes for Science Applications International
- The Consensus Analyst Price Target has fallen slightly from $120.56 to $116.00.
- The Consensus Revenue Growth forecasts for Science Applications International has significantly fallen from 2.5% per annum to 1.0% per annum.
- The Net Profit Margin for Science Applications International has fallen from 4.88% to 4.48%.
Disclaimer
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