Science Applications International Corporation (SAIC Quick QuoteSAIC - Free Report) has been awarded a $444 million contract to support the U.S. Space Force's Digital Transformation, Acquisition, Modernization and Modification (“DTAMM”) program. The contract focuses on enhancing the Space Systems Command and Space Launch Deltas (SLDs) 30 and 45.

Science Applications' executive vice president, David Ray, emphasized the company's commitment to advancing space exploration and resilience. The contract will aid in modernizing space launch range instrumentation at key locations, including Cape Canaveral and Vandenberg Space Force Bases, to support an accelerated national launch cadence.

This contract underscores Science Applications’ position as a leader in the space domain, leveraging its expertise to support critical national priorities. With a focus on enhancing spaceports and streamlining launch processes, SAIC remains at the forefront of driving innovation and efficiency in space operations for the U.S. Space Force.

Government Contracts Drive Revenue Growth

Science Applications maintains a strong focus on the federal government market, aiming to expand its market share. Over the past three years — 2021, 2022 and 2023 — SAIC derived 98% of its total revenues from contracts with the U.S. government. Its clientele includes various government entities such as the Department of Homeland Security, NASA and the Department of State, as well as military branches like the Navy, Air Force and Army.

With major clients like the military and other government agencies, SAIC enjoys business stability and reduced revenue volatility. Government projects, once approved, typically span multiple years, ensuring a steady stream of revenues and enhancing revenue predictability.

Additionally, Science Applications stands to benefit from the increased federal government spending outlined in the latest budget proposal. This heightened budget allocation is anticipated to expedite contract awards, further bolstering SAIC's top-line growth.

Furthermore, Science Applications is capitalizing on the surge in demand for its technology solutions, driven by the ongoing digital transformation in defense, space, intelligence and civilian sectors. The company's strategic business development, operational excellence and customer satisfaction have resulted in a robust contract backlog of $23.1 billion as of Nov 3, 2023.

In the third quarter of fiscal 2024, Science Applications reported a 10.6% increase in revenues, demonstrating the positive impact of existing and new contracts. Adjusted earnings per share rose by 19%, reflecting strong operational performance, a lower tax rate and a reduced outstanding share count.

Zacks Rank & Other Stocks to Consider

Currently, Science Applications carries a Zacks Rank #2 (Buy). Shares of SAIC have risen 13.2% year to date (YTD).

Some other top-ranked stocks from the broader technology sector are NVIDIA Corporation (NVDA Quick QuoteNVDA - Free Report) , Meta Platforms (META Quick QuoteMETA - Free Report) and Amazon.com (AMZN Quick QuoteAMZN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 15.3% upward to $23.22 per share in the past 30 days, which suggests year-over-year growth of 79.2%. The long-term estimated earnings growth rate for the stock stands at 29.7%. Shares of NVDA have jumped 73.2% YTD.

The consensus mark for Meta’s 2024 earnings has been revised upward by 12 cents to $19.94 per share over the past 30 days, indicating a 34.1% increase from 2023. It has a long-term earnings growth expectation of 19.5%. In the trailing 12 months, META stock has surged 36.6% YTD.

The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 2 cents to $4.08 per share in the past seven days, which implies an increase of 40.7% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.1%. AMZN stock has returned 13.1% YTD.