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SAIC (SAIC) Up 19.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for SAIC (SAIC - Free Report) . Shares have added about 19.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is SAIC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Science Applications Q4 Earnings Top, Revenues Miss
Science Applications reported mixed results for fourth-quarter fiscal 2020, wherein its earnings topped the Zacks Consensus Estimate but revenues missed the same. The company reported fiscal fourth-quarter adjusted earnings of $1.58 per share, surpassing the consensus mark by 19.7% and improving 35% year over year as well.
Moreover, revenues jumped 29% from the year-ago quarter to $1.54 billion but lagged the Zacks Consensus Estimate of $1.57 billion. Revenues realized from the acquisition of Engility drove the top line. Solid performance of the company’s contract portfolio was a tailwind.
However, adjusting for the impact of acquired revenues, the metric edged down 1.2% due to acquisition-related dis-synergies and completion of a technology contract.
Quarter in Detail
Net bookings for the fiscal fourth quarter were $2.4 billion, reflecting a book-to-bill ratio of approximately 1.5.
Science Applications’ estimated backlog of signed business deals was $15.3 billion, of which $2.6 billion was funded.
Adjusted operating margin expanded 20 basis points (bps) year over year to 6.8% in the reported quarter.
Adjusted EBITDA of $134 million jumped 41%. Adjusted EBITDA margin expanded 70 bps to 8.7%.
Balance Sheet & Cash Flow
Science Applications ended the fiscal fourth quarter with cash and cash equivalents of $188 million, down from the prior quarter’s $162 million.
Operating cash flow was $69 million, down from the previous quarter’s $116 million. Free cash flow was $62 million compared with $116 million in the fiscal third quarter. During the reported quarter, Science Applications deployed $7 million of capital, $22 million to cash dividends and $16 million to debt repayment.
In fiscal 2020, the company generated operating and free cash flow of $458 million and $437 million, respectively. During this period, Science Applications deployed $21 million of capital, $87 million to cash dividends and $274 million to debt repayment.
Guidance
During the earnings conference call, Science Applications noted that it had intended to provide a formal fiscal 2021 outlook. However, citing the uncertainties due to the coronavirus pandemic, the company has decided to postpone issuing a fiscal 2021 guidance.
Nonetheless, for the investment community, the company shared its thought regarding how it had viewed fiscal 2021 before the crisis. Science Applications said it has witnessed minimal impact of coronavirus on its business.
Prior to the COVID-19 crisis, the company was expecting organic revenue growth in the range of 3% to 6% for fiscal 2021. This would include revenues from the recently-completed acquisition of Unisys Federal.
For the fiscal year, adjusted EBITDA margin is likely to be at the mid-to-upper-end of the 8-9% range.
Free cash flow is expected to be at least $450 million for fiscal 2021.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, SAIC has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
SAIC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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SAIC (SAIC) Up 19.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for SAIC (SAIC - Free Report) . Shares have added about 19.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is SAIC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Science Applications Q4 Earnings Top, Revenues Miss
Science Applications reported mixed results for fourth-quarter fiscal 2020, wherein its earnings topped the Zacks Consensus Estimate but revenues missed the same. The company reported fiscal fourth-quarter adjusted earnings of $1.58 per share, surpassing the consensus mark by 19.7% and improving 35% year over year as well.
Moreover, revenues jumped 29% from the year-ago quarter to $1.54 billion but lagged the Zacks Consensus Estimate of $1.57 billion. Revenues realized from the acquisition of Engility drove the top line. Solid performance of the company’s contract portfolio was a tailwind.
However, adjusting for the impact of acquired revenues, the metric edged down 1.2% due to acquisition-related dis-synergies and completion of a technology contract.
Quarter in Detail
Net bookings for the fiscal fourth quarter were $2.4 billion, reflecting a book-to-bill ratio of approximately 1.5.
Science Applications’ estimated backlog of signed business deals was $15.3 billion, of which $2.6 billion was funded.
Adjusted operating margin expanded 20 basis points (bps) year over year to 6.8% in the reported quarter.
Adjusted EBITDA of $134 million jumped 41%. Adjusted EBITDA margin expanded 70 bps to 8.7%.
Balance Sheet & Cash Flow
Science Applications ended the fiscal fourth quarter with cash and cash equivalents of $188 million, down from the prior quarter’s $162 million.
Operating cash flow was $69 million, down from the previous quarter’s $116 million. Free cash flow was $62 million compared with $116 million in the fiscal third quarter. During the reported quarter, Science Applications deployed $7 million of capital, $22 million to cash dividends and $16 million to debt repayment.
In fiscal 2020, the company generated operating and free cash flow of $458 million and $437 million, respectively. During this period, Science Applications deployed $21 million of capital, $87 million to cash dividends and $274 million to debt repayment.
Guidance
During the earnings conference call, Science Applications noted that it had intended to provide a formal fiscal 2021 outlook. However, citing the uncertainties due to the coronavirus pandemic, the company has decided to postpone issuing a fiscal 2021 guidance.
Nonetheless, for the investment community, the company shared its thought regarding how it had viewed fiscal 2021 before the crisis. Science Applications said it has witnessed minimal impact of coronavirus on its business.
Prior to the COVID-19 crisis, the company was expecting organic revenue growth in the range of 3% to 6% for fiscal 2021. This would include revenues from the recently-completed acquisition of Unisys Federal.
For the fiscal year, adjusted EBITDA margin is likely to be at the mid-to-upper-end of the 8-9% range.
Free cash flow is expected to be at least $450 million for fiscal 2021.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, SAIC has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
SAIC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.