SAIC (SAIC): Reassessing Valuation After Major Defense Wins and New HavocAI Partnership

Science Applications International (SAIC) just landed a $1.4 billion COBRA task order alongside a fresh $242 million Navy contract, plus a new HavocAI partnership, giving investors fresh catalysts to reassess the stock.

See our latest analysis for Science Applications International.

Despite these substantial contract wins and the HavocAI tie up sharpening its tech story, SAIC’s 1 year total shareholder return of minus 28.38 percent and year to date share price return of minus 21.93 percent show momentum has been fading rather than building.

If these defense wins have you rethinking the sector, it could be a good moment to explore other opportunities across aerospace and defense stocks for ideas beyond SAIC.

With contracts surging, flat revenue growth and declining earnings, plus the stock trading at a steep intrinsic and analyst target discount, is SAIC quietly undervalued or already reflecting all the future defense modernization upside?

Most Popular Narrative Narrative: 22.8% Undervalued

With the most followed narrative putting fair value well above SAIC’s last close at $87.56, the gap between sentiment and pricing looks unusually wide.

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.

Want to see why modest growth, shifting margins, and a re rated earnings multiple still point to upside from here? The full narrative lays out the unexpected math behind that call.

Result: Fair Value of $113.38 (UNDERVALUED)

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

However, persistent federal budget uncertainty and rising non traditional competition could pressure SAIC’s growth, margins, and backlog conversion, which would challenge any upside narrative.

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

Build Your Own Science Applications International Narrative

If you see the numbers differently or want to stress test the assumptions 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 5 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investing angles beyond SAIC?

Before you move on, consider scanning curated stock ideas from our powerful screener tools, built to surface opportunities you might otherwise miss.

• Capture potential mispricing by reviewing these 933 undervalued stocks based on cash flows that could offer different characteristics than well known defense names.
• Explore structural themes with these 24 AI penny stocks positioned at the intersection of automation, data, and productivity tools.
• Evaluate income potential through these 14 dividend stocks with yields > 3% that combine yield-focused strategies with established business models.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com