A Look at Science Applications International’s Valuation Following Sudden CEO Transition and Updated Guidance

Science Applications International (SAIC) saw its executive ranks shift after Toni Townes-Whitley stepped down as CEO and Board member. James Reagan has stepped in as interim CEO. The company reaffirmed its guidance but noted possible federal shutdown risks.

See our latest analysis for Science Applications International.

Executive shakeups like SAIC’s can rattle investor nerves, and the market’s reaction has been telling. The stock’s 1-day share price return plunged 6.5% on CEO departure news, and that steeper 18% decline over the last 90 days capped off a challenging year. A 12-month total shareholder return of negative 33.7% clearly signals momentum has been fading, even as the board emphasizes a stable outlook and potential for a turnaround.

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With shares trading at a notable discount to analyst price targets and past returns under pressure, investors now face a key question: Is current weakness a buying opportunity, or is the market accurately pricing in all future risks and rewards?

Most Popular Narrative: 18.9% Undervalued

With Science Applications International trading at $94.09 and the narrative’s fair value set at $116.00, there is a significant gap between market price and expectations. The narrative projects a scenario where recent weakness could be at odds with underlying business trends and analyst confidence.

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 could 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 this fair value was built? The narrative’s price justification relies on some big shifts in revenue, profit margins, and ambitious earnings targets. There is a bold mix of optimism and realism in analyst forecasts that could surprise you. See what is really driving this valuation!

Result: Fair Value of $116.00 (UNDERVALUED)

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

However, factors such as ongoing government budget uncertainty and rising competition could undermine the bullish thesis if these issues persist or intensify in the coming quarters.

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

Build Your Own Science Applications International Narrative

If the above doesn't fully align with your perspective, dive into the data and shape your own investment view in just minutes. Do it your way.

A great starting point for your Science Applications International research is our analysis highlighting 5 key rewards and 2 important warning signs 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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