NYSE:SAIC

Stock Analysis Report

Science Applications International

Executive Summary

Science Applications International Corporation provides technical, engineering, and enterprise information technology (IT) services primarily in the United States.


Snowflake Analysis

Reasonable growth potential and fair value.


Similar Companies

Share Price & News

How has Science Applications International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SAIC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.2%

SAIC

-4.6%

US IT

-4.2%

US Market


1 Year Return

22.5%

SAIC

29.5%

US IT

14.0%

US Market

Return vs Industry: SAIC underperformed the US IT industry which returned 34.8% over the past year.

Return vs Market: SAIC exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

SAICIndustryMarket
7 Day-3.2%-4.6%-4.2%
30 Day2.7%-0.4%-1.8%
90 Day7.1%7.4%2.6%
1 Year24.6%22.5%30.9%29.5%16.3%14.0%
3 Year11.4%5.9%101.3%92.6%43.2%34.0%
5 Year84.5%67.6%137.9%116.7%65.9%47.6%

Price Volatility Vs. Market

How volatile is Science Applications International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Science Applications International undervalued compared to its fair value and its price relative to the market?

34.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SAIC ($94.83) is trading below our estimate of fair value ($140.99)

Significantly Below Fair Value: SAIC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SAIC is poor value based on its PE Ratio (33.3x) compared to the IT industry average (31.4x).

PE vs Market: SAIC is poor value based on its PE Ratio (33.3x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: SAIC is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: SAIC is good value based on its PB Ratio (4x) compared to the US IT industry average (4.2x).


Next Steps

Future Growth

How is Science Applications International forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

24.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SAIC's forecast earnings growth (24.8% per year) is above the savings rate (1.7%).

Earnings vs Market: SAIC's earnings (24.8% per year) are forecast to grow faster than the US market (14.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SAIC's revenue (4.1% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: SAIC's revenue (4.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SAIC's Return on Equity is forecast to be high in 3 years time (31.6%)


Next Steps

Past Performance

How has Science Applications International performed over the past 5 years?

5.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SAIC has a large one-off loss of $102.0M impacting its November 1 2019 financial results.

Growing Profit Margin: SAIC's current net profit margins (2.6%) are lower than last year (4.3%).


Past Earnings Growth Analysis

Earnings Trend: SAIC's earnings have grown by 5.7% per year over the past 5 years.

Accelerating Growth: SAIC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SAIC had negative earnings growth (-19.8%) over the past year, making it difficult to compare to the IT industry average (12%).


Return on Equity

High ROE: SAIC's Return on Equity (11.5%) is considered low.


Next Steps

Financial Health

How is Science Applications International's financial position?


Financial Position Analysis

Short Term Liabilities: SAIC's short term assets ($1.4B) exceed its short term liabilities ($1.2B).

Long Term Liabilities: SAIC's short term assets ($1.4B) do not cover its long term liabilities ($2.1B).


Debt to Equity History and Analysis

Debt Level: SAIC's debt to equity ratio (145.6%) is considered high.

Reducing Debt: SAIC's debt to equity ratio has increased from 133.9% to 145.6% over the past 5 years.

Debt Coverage: SAIC's debt is well covered by operating cash flow (20.3%).

Interest Coverage: SAIC's interest payments on its debt are well covered by EBIT (4.7x coverage).


Balance Sheet

Inventory Level: SAIC has a low level of unsold assets or inventory.

Debt Coverage by Assets: SAIC's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is Science Applications International's current dividend yield, its reliability and sustainability?

1.61%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SAIC's dividend (1.56%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: SAIC's dividend (1.56%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, SAIC has been paying a dividend for less than 10 years.

Growing Dividend: SAIC's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.8%), SAIC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SAIC's dividends in 3 years are forecast to be well covered by earnings (23.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure


CEO

Nazzic Keene (58yo)

0.5yrs

Tenure

US$3,736,367

Compensation

Ms. Nazzic S. Keene has been the Chief Executive Officer and Director of Science Applications International Corporation since July 31, 2019. Ms. Keene served as Chief Operating Officer at Science Applicati ...


CEO Compensation Analysis

Compensation vs Market: Nazzic's total compensation ($USD3.74M) is below average for companies of similar size in the US market ($USD6.39M).

Compensation vs Earnings: Nazzic's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Nazzic Keene
CEO & Director0.5yrsUS$3.74m0.075% $4.0m
Charles Mathis
Executive VP & CFO3.3yrsUS$2.20m0.0083% $442.7k
Steven Mahon
Executive VP4.3yrsUS$1.76m0.015% $811.0k
Shane Canestra
Director of Investor Relations0yrsno datano data
Lucy Fitch
Chief Communications Officer & Senior VP0yrsno datano data
Christopher Donaghey
Senior Vice President of Corporate Development1.7yrsno datano data
Michelle O'Hara
Executive VP & Chief Human Resource Officer0.3yrsno data0.026% $1.4m
Paul Greiner
Senior VP0yrsno datano data
Tom Eldridge
Senior Vice President of Strategic Development & Communications0yrsno datano data
James Scanlon
Executive VP & GM of Defense Systems Group2.2yrsno data0.042% $2.2m

1.9yrs

Average Tenure

58yo

Average Age

Experienced Management: SAIC's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Nazzic Keene
CEO & Director0.5yrsUS$3.74m0.075% $4.0m
Donna Morea
Independent Chairman of the Board1.1yrsUS$343.45k0.019% $996.5k
John Hamre
Independent Director6.4yrsUS$268.29k0.023% $1.2m
Timothy Mayopoulos
Independent Director5yrsUS$273.29k0.011% $604.3k
David Kerko
Independent Director1.1yrsno data0.0034% $178.0k
Yvette Kanouff
Director0.5yrsno datano data
Robert Bedingfield
Independent Director6.4yrsUS$305.29k0.024% $1.3m
Steven Shane
Independent Director6.4yrsUS$302.45k0.022% $1.2m
Carol Goode
Director0.5yrsno data0.0016% $82.9k
Katharina McFarland
Independent Director1.1yrsno data0.0090% $476.2k

1.1yrs

Average Tenure

60.5yo

Average Age

Experienced Board: SAIC's board of directors are not considered experienced ( 1.1 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 30.2%.


Top Shareholders

Company Information

Science Applications International Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Science Applications International Corporation
  • Ticker: SAIC
  • Exchange: NYSE
  • Founded: 1969
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: US$5.315b
  • Shares outstanding: 57.72m
  • Website: https://www.saic.com

Number of Employees


Location

  • Science Applications International Corporation
  • 12010 Sunset Hills Road
  • Reston
  • Virginia
  • 20190
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SAICNYSE (New York Stock Exchange)YesCommon StockUSUSDSep 2013
85SDB (Deutsche Boerse AG)YesCommon StockDEEURSep 2013
0V9NLSE (London Stock Exchange)YesCommon StockGBUSDSep 2013

Biography

Science Applications International Corporation provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. The company’s offerings include engineering; technology and equipment platform integration; maintenance of ground and maritime systems; logistics; training and simulation; operation and program support services; and end-to-end services, such as design, development, integration, deployment, management and operations, sustainment, and security of its customers’ IT infrastructure. It serves the U.S. military comprising Army, Air Force, Navy, Marines, and Coast Guard; U.S. Defense Logistics Agency; National Aeronautics and Space Administration; the U.S. Department of State; and Department of Justice and various intelligence community agencies. The company was formerly known as SAIC Gemini, Inc. and changed its name to Science Applications International Corporation in September 2013. Science Applications International Corporation was founded in 1969 and is headquartered in Reston, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 01:52
End of Day Share Price2020/02/24 00:00
Earnings2019/11/01
Annual Earnings2019/02/01


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.