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what it is
SAIC runs IT, engineering, and mission support work for the U.S. government, mostly defense and civilian agencies.
how it gets paid
Last year Science App made $7.3B in revenue. Defense IT services was the main engine at $2.6B, or 36% of sales.
why growth slowed
Revenue fell 2.9% last year. Volume on existing contracts has ramped down and pressured sales.
what just happened
SAIC posted EPS of $2.58 versus a $2.20 estimate, a 17.27% beat.
At a glance
B+ balance sheet — decent shape, but not bulletproof
95/100 earnings predictability — you can trust these numbers
10.1x trailing p/e — the market's not buying it — or you found a deal
1.5% dividend yield — cash in your pocket every quarter
9.5% return on capital — nothing to write home about
xvary composite: 66/100 — average
What they do
SAIC runs IT, engineering, and mission support work for the U.S. government, mostly defense and civilian agencies.
This is a trust business. SAIC's 95 earnings predictability score says the company usually does what it says, which matters when your customer is the U.S. government and your contracts run for years. Switching costs (changing vendors -> retraining systems and people -> delays you do not want) are real, so once SAIC is inside an agency, leaving is painful.
How they make money
$7.3B
annual revenue · their business grew -2.9% last year
Defense IT services
$2.6B
5.6%
Federal civilian IT services
$1.8B
2.9%
Technical engineering services
$1.5B
2.9%
Enterprise modernization services
$0.9B
+3.5%
Mission and higher-end tech services
$0.5B
+5.0%
The products that matter
technical and IT services
Government IT & Engineering Services
$7.3B revenue · 100% of the business
it is the entire company: $7.3B in annual revenue tied to federal contracts, with a 5.8% net margin that leaves little room for sloppy execution.
100% of revenue
Key numbers
10.1x
trailing p/e
P/E -> price-to-earnings -> so what: you are paying about 10 times last year's profit for a business with a 95 predictability score.
3.5%
sales outlook
Projected sales growth -> expected top-line increase -> so what: the company is expected to grow slower than its 8.5% historical pace, so this remains a rerating story, not a growth story.
$2.5B
long-term debt
Long-term debt -> money owed beyond one year -> so what: debt equals 35% of capital, which is fine until growth stalls.
9.5%
return on capital
Return on capital -> profit from money put into the business -> so what: decent, but not elite, which fits a steady contractor more than a rocket ship.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 60 / 100
- long-term debt $2.5B (35% of capital)
- net profit margin 6.3% — keeps 6 cents of every dollar in revenue
- return on equity 17% — $0.17 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in SAIC 3 years ago → it's now worth $10,040.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
SAIC posted EPS of $2.58 versus a $2.20 estimate, a 17.27% beat.
Quarterly EPS came in above expectations even as recent business commentary stayed soft. The company also disclosed annual revenue of $7.3B, down 2.9%, and said contract volume ramp-downs plus a $16M shutdown hit pressured sales.
$7.3B
annual revenue
$2.58
quarterly eps
10.5%
operating margin
the number that mattered
The 17.27% EPS beat matters because SAIC is being priced like a no-growth contractor at 10.1x earnings, so even modest execution can move the stock.
-
science applications' business has hit a soft patch.
-
volume on existing contracts has ramped down and pressured sales.
-
in addition, the government shutdown in the october quarter reduced the top line by $16 million.
-
all told, revenues in the quarter fell by 5.6%.
-
disciplined pricing and tight cost controls limited the effect on the bottom line.
source: company filings and quarterly estimates, 2026
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What could go wrong
the #1 risk is federal contract delays or cancellations — when one customer drives the whole $7.3B revenue base, concentration stops being a footnote.
med
budget and award timing
SAIC depends on federal spending decisions. Delays, continuing resolutions, or cancellations can push revenue recognition around even when the long-term program still exists.
impact: this sits against 100% of the current $7.3B revenue base.
med
thin-margin execution
A 5.8% net margin and 5.0% quarterly margin do not leave much cushion. Cost overruns, mix shifts, or weaker pricing power show up fast.
impact: when you only keep about 6 cents on the dollar, small operational misses matter more than they do at software margins.
med
cheap can stay cheap
The stock trades at 10.1x earnings because revenue fell 2.9% last year and the business has one primary customer. The multiple does not have to expand just because it looks low.
impact: if revenue drifts from the $7.3B base toward the $7B estimate without better margins, you are left owning a shrinking contractor on a low multiple.
a disruption here does not hit one segment. it hits the whole company: $7.3B of revenue, a 5.8% net margin, and a valuation that already assumes limited growth.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
revenue stabilization
last year revenue fell 2.9%, and the current revenue estimate sits at $7B versus a $7.3B base. That is the first thing to watch.
metric
quarterly margin
the latest quarterly margin was 5.0%. If that slips while revenue is soft, the earnings stability story weakens fast.
calendar
budget and contract cadence
this is a federal spending business. award timing and budget process noise can move results even when demand has not disappeared.
trend
institutional flow
3q2025 showed 175 buyers versus 206 sellers. If that stays negative, the market is telling you the cheap multiple is not enough.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts think SAIC has better near-term performance odds than most stocks.
risk profile
average
stability score 3 — neither a bunker stock nor a chaos machine.
chart momentum
average
technical score 3 — the chart is not screaming anything dramatic right now.
earnings predictability
95 / 100
management has a long record of delivering numbers close to expectations. That reliability is part of the appeal.
source: institutional data
Institutional activity
175 buyers vs. 206 sellers in 3q2025. total institutional holdings: 36.8M shares.
source: institutional data
Price targets
3-5 year target range
$75
$170
$101
current price
$123
target midpoint · +22% from current · 3-5yr high: $245 (+145% · 26% ann'l return)
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