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SAIC (SAIC) Up 1.1% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for SAIC (SAIC - Free Report) . Shares have added about 1.1% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is SAIC due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Science Applications International Corporation before we dive into how investors and analysts have reacted as of late.
SAIC Q2 Earnings Beat on Contract Growth, FY27 View Raised
Science Applications International Corporation reported adjusted second-quarter fiscal 2027 earnings of $3.01 per share, down 17.1% year over year but above the Zacks Consensus Estimate of $2.25 by 33.78%.
Revenues rose 6.3% to $1.88 billion and topped the consensus mark by 7.52%. The quarter benefited from higher volumes on existing and new contracts, solid program execution and the SilverEdge acquisition, partly offset by contract completions. Backlog ended the period at about $22.1 billion, including $3.8 billion of funded backlog.
SAIC's Contract Growth Supports Revenue Expansion
Organic revenues increased 5.3% year over year. SilverEdge contributed $20 million to quarterly revenues, while management said unplanned material purchases added roughly one percentage point to organic growth and are not expected to repeat.
On-contract growth reached 9%, well ahead of plan. Management expects about 5% on-contract growth in the second half. A group of programs won in fiscal 2025 and 2026, which generated $350 million last year, is expected to produce about $500 million this year and contributed roughly $240 million in the first half.
Science Applications Faces Slower Award Timing
Net bookings were $1.2 billion, producing a quarterly book-to-bill ratio of 0.6 and a trailing 12-month ratio of 0.8. Management said a large recompete award booked two days after quarter-end would have moved the quarterly ratio closer to 1.0.
Procurement timing remains uneven, with some requests for proposals and awards shifting to the right. Still, SAIC's recompete win rate exceeded 90% in the quarter, while new-business win rates were at or above the company's 30% target. The company also booked more than $1.6 billion of intelligence and space awards in the first half.
SAIC's Profitability Holds in Double Digits
Adjusted EBITDA increased 4.3% year over year to $193 million, while the adjusted EBITDA margin was 10.3% compared with 10.5% a year earlier. Adjusted operating income rose to $191 million from $182 million, with the adjusted operating margin easing to 10.2% from 10.3%.
Higher selling, general and administrative expenses weighed on profitability, while prior-year results benefited from recovery of costs tied to a patent infringement settlement. Management also attributed the year-over-year decline in adjusted earnings per share to a favorable settlement in the prior period, partly offset by a lower share count.
Science Applications' Segments Post Revenue Gains
Defense and Intelligence revenues increased 5.5% year over year to $1.45 billion, driven by higher volumes on existing and new contracts and the SilverEdge contribution. The segment's adjusted operating margin improved to 9.5% from 9.0% on better contract profitability.
Civilian revenues advanced 9.1% to $431 million, also supported by contract ramp-ups. Its adjusted operating margin declined to 13.0% from 13.7% because of timing and volume mix. Corporate recorded a $3 million adjusted operating loss versus $4 million of adjusted operating income a year earlier.
SAIC's Cash Generation Supports Capital Deployment
Operating cash flow increased 19.7% year over year to $146 million, while free cash flow declined 12.7% to $131 million. During the quarter, SAIC deployed $106 million of capital, including $90 million for share repurchases and $16 million for dividends.
Cash and cash equivalents totaled $126 million at quarter-end, while current and long-term debt totaled about $2.49 billion. Management said net leverage declined to 3.0 times. SAIC reiterated fiscal 2027 free cash flow guidance of more than $600 million and free cash flow per share of more than $14.
SAIC Raises Fiscal 2027 Outlook
SAIC raised fiscal 2027 revenue guidance to $7.2-$7.3 billion from $7.0-$7.2 billion and now expects organic growth of negative 2% to flat, compared with the prior range of negative 4% to negative 2%. Adjusted EBITDA guidance increased to $750-$755 million from $720-$730 million.
The company also lifted its adjusted EBITDA margin outlook to 10.3%-10.5% from 10.1%-10.3% and adjusted earnings guidance to $10.65-$10.75 per share from $9.90-$10.10. Management expects second-half margins in the high-9% range and said the RITS contract roll-off represents about a 350-basis-point headwind to second-half organic growth.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, 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 has a grade of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, SAIC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
SAIC is part of the Zacks Computers - IT Services industry. Over the past month, Nutanix (NTNX - Free Report) , a stock from the same industry, has gained 5.1%. The company reported its results for the quarter ended July 2026 more than a month ago.
Nutanix reported revenues of $757.08 million in the last reported quarter, representing a year-over-year change of +15.9%. EPS of $0.60 for the same period compares with $0.37 a year ago.
Nutanix is expected to post earnings of $0.60 per share for the current quarter, representing a year-over-year change of +46.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Nutanix. Also, the stock has a VGM Score of D.
View the Zacks #1 Rank List
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SAIC (SAIC) Up 1.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for SAIC (SAIC - Free Report) . Shares have added about 1.1% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is SAIC due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Science Applications International Corporation before we dive into how investors and analysts have reacted as of late.
SAIC Q2 Earnings Beat on Contract Growth, FY27 View Raised
Science Applications International Corporation reported adjusted second-quarter fiscal 2027 earnings of $3.01 per share, down 17.1% year over year but above the Zacks Consensus Estimate of $2.25 by 33.78%.
Revenues rose 6.3% to $1.88 billion and topped the consensus mark by 7.52%. The quarter benefited from higher volumes on existing and new contracts, solid program execution and the SilverEdge acquisition, partly offset by contract completions. Backlog ended the period at about $22.1 billion, including $3.8 billion of funded backlog.
SAIC's Contract Growth Supports Revenue Expansion
Organic revenues increased 5.3% year over year. SilverEdge contributed $20 million to quarterly revenues, while management said unplanned material purchases added roughly one percentage point to organic growth and are not expected to repeat.
On-contract growth reached 9%, well ahead of plan. Management expects about 5% on-contract growth in the second half. A group of programs won in fiscal 2025 and 2026, which generated $350 million last year, is expected to produce about $500 million this year and contributed roughly $240 million in the first half.
Science Applications Faces Slower Award Timing
Net bookings were $1.2 billion, producing a quarterly book-to-bill ratio of 0.6 and a trailing 12-month ratio of 0.8. Management said a large recompete award booked two days after quarter-end would have moved the quarterly ratio closer to 1.0.
Procurement timing remains uneven, with some requests for proposals and awards shifting to the right. Still, SAIC's recompete win rate exceeded 90% in the quarter, while new-business win rates were at or above the company's 30% target. The company also booked more than $1.6 billion of intelligence and space awards in the first half.
SAIC's Profitability Holds in Double Digits
Adjusted EBITDA increased 4.3% year over year to $193 million, while the adjusted EBITDA margin was 10.3% compared with 10.5% a year earlier. Adjusted operating income rose to $191 million from $182 million, with the adjusted operating margin easing to 10.2% from 10.3%.
Higher selling, general and administrative expenses weighed on profitability, while prior-year results benefited from recovery of costs tied to a patent infringement settlement. Management also attributed the year-over-year decline in adjusted earnings per share to a favorable settlement in the prior period, partly offset by a lower share count.
Science Applications' Segments Post Revenue Gains
Defense and Intelligence revenues increased 5.5% year over year to $1.45 billion, driven by higher volumes on existing and new contracts and the SilverEdge contribution. The segment's adjusted operating margin improved to 9.5% from 9.0% on better contract profitability.
Civilian revenues advanced 9.1% to $431 million, also supported by contract ramp-ups. Its adjusted operating margin declined to 13.0% from 13.7% because of timing and volume mix. Corporate recorded a $3 million adjusted operating loss versus $4 million of adjusted operating income a year earlier.
SAIC's Cash Generation Supports Capital Deployment
Operating cash flow increased 19.7% year over year to $146 million, while free cash flow declined 12.7% to $131 million. During the quarter, SAIC deployed $106 million of capital, including $90 million for share repurchases and $16 million for dividends.
Cash and cash equivalents totaled $126 million at quarter-end, while current and long-term debt totaled about $2.49 billion. Management said net leverage declined to 3.0 times. SAIC reiterated fiscal 2027 free cash flow guidance of more than $600 million and free cash flow per share of more than $14.
SAIC Raises Fiscal 2027 Outlook
SAIC raised fiscal 2027 revenue guidance to $7.2-$7.3 billion from $7.0-$7.2 billion and now expects organic growth of negative 2% to flat, compared with the prior range of negative 4% to negative 2%. Adjusted EBITDA guidance increased to $750-$755 million from $720-$730 million.
The company also lifted its adjusted EBITDA margin outlook to 10.3%-10.5% from 10.1%-10.3% and adjusted earnings guidance to $10.65-$10.75 per share from $9.90-$10.10. Management expects second-half margins in the high-9% range and said the RITS contract roll-off represents about a 350-basis-point headwind to second-half organic growth.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, 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 has a grade of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, SAIC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
SAIC is part of the Zacks Computers - IT Services industry. Over the past month, Nutanix (NTNX - Free Report) , a stock from the same industry, has gained 5.1%. The company reported its results for the quarter ended July 2026 more than a month ago.
Nutanix reported revenues of $757.08 million in the last reported quarter, representing a year-over-year change of +15.9%. EPS of $0.60 for the same period compares with $0.37 a year ago.
Nutanix is expected to post earnings of $0.60 per share for the current quarter, representing a year-over-year change of +46.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Nutanix. Also, the stock has a VGM Score of D.