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Science Applications International Corporation (SAIC) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of SAIC (SAIC - Free Report) ? Shares have been on the move with the stock up 22.3% over the past month. The stock hit a new 52-week high of $136.05 in the previous session. SAIC has gained 22.6% since the start of the year compared to the 44.5% move for the Zacks Computer and Technology sector and the 33% return for the Zacks Computers - IT Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on December 4, 2023, SAIC reported EPS of $2.27 versus consensus estimate of $1.66 while it beat the consensus revenue estimate by 6.72%.
Valuation Metrics
SAIC may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
SAIC has a Value Score of A. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 25.2X. On a trailing cash flow basis, the stock currently trades at 13X versus its peer group's average of 13X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, SAIC currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if SAIC passes the test. Thus, it seems as though SAIC shares could still be poised for more gains ahead.
How Does SAIC Stack Up to the Competition?
Shares of SAIC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Vertiv Holdings Co. (VRT - Free Report) . VRT has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Vertiv Holdings Co. beat our consensus estimate by 18.18%, and for the current fiscal year, VRT is expected to post earnings of $2.21 per share on revenue of $6.87 billion.
Shares of Vertiv Holdings Co. have gained 14.1% over the past month, and currently trade at a forward P/E of 26.05X and a P/CF of 33.47X.
The Computers - IT Services industry is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SAIC and VRT, even beyond their own solid fundamental situation.
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Science Applications International Corporation (SAIC) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of SAIC (SAIC - Free Report) ? Shares have been on the move with the stock up 22.3% over the past month. The stock hit a new 52-week high of $136.05 in the previous session. SAIC has gained 22.6% since the start of the year compared to the 44.5% move for the Zacks Computer and Technology sector and the 33% return for the Zacks Computers - IT Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on December 4, 2023, SAIC reported EPS of $2.27 versus consensus estimate of $1.66 while it beat the consensus revenue estimate by 6.72%.
Valuation Metrics
SAIC may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
SAIC has a Value Score of A. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 25.2X. On a trailing cash flow basis, the stock currently trades at 13X versus its peer group's average of 13X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, SAIC currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if SAIC passes the test. Thus, it seems as though SAIC shares could still be poised for more gains ahead.
How Does SAIC Stack Up to the Competition?
Shares of SAIC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Vertiv Holdings Co. (VRT - Free Report) . VRT has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Vertiv Holdings Co. beat our consensus estimate by 18.18%, and for the current fiscal year, VRT is expected to post earnings of $2.21 per share on revenue of $6.87 billion.
Shares of Vertiv Holdings Co. have gained 14.1% over the past month, and currently trade at a forward P/E of 26.05X and a P/CF of 33.47X.
The Computers - IT Services industry is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SAIC and VRT, even beyond their own solid fundamental situation.