Science Applications International Corp. (SAIC - Free Report) is benefiting from continuous flow of high-value contracts. Record level of awards reflects its disciplined business development actions, consistent operational excellence and high customer satisfaction.
Notably, shares of the company have returned 35% on a year-to-date basis, outperforming the industry’s growth of 24.9%.
Recently, Science Applications received contracts worth $582 million by space and intelligence community customers. These contracts include two large contracts totaling $302 million, and a $68 million contract from Zeus award. Zeus is a follow-on award for the Innovative GEOINT Application Provider Program.
Growing Presence in Intelligence and Space Community
Science Applications’ increasing number of awards highlights its growth within the space and intelligence community. Notably, per Mordor Intelligence, the Intelligence, Surveillance and Reconnaissance market is expected to reach $46.54 billion by 2024, at a CAGR of 4.83% during 2019-2024.
Being one of the largest systems engineering and integration providers across the U.S. space and intelligence community, Science Applications is poised to benefit significantly from this area. Its technical offerings like digital engineering, app brokerage, and data science along with mission expertise make it one of the most preferred service providers in the community.
Notably, in October 2018, Science Applications, along with Decisive Analytics Corporation, was awarded a five-year, $3.3 million contract by the U.S. Air Force to support the IT systems that are used to process and store ISR data.
Over the years, the company has also taken steps to bolster its position in the space and intelligence community. The 2015 acquisition of Scitor Holdings, a provider of technical services to the U.S. intelligence community, propelled Science Applications into the limelight in the intelligence community, thereby fortifying its portfolio to pursue opportunities within the area.
Contract Wins Boost Growth
The company continues to execute its strategy of winning high-value contracts, delivering excellence to customers and deploying capital for growth. Its robust business model is expected to help it grow further.
Earlier this month, Science Applications was selected by the U.S. Army to modernize its IT infrastructure through the $41 million Army Human Resources Command Cloud Computing Environment contract.
Moreover, in September this year, the company was awarded a systems integration IDIQ contract with a ceiling value of $60 million. This was an important step toward stabilizing and securing critical IT systems for the U.S. Patent and Trademark Office.
The company has a large pipeline of new projects and continues to win more deals at regular intervals. Notably, as of Aug 2, 2019, its total backlog was $13.9 billion. These back-to-back contract wins are the key catalysts driving success for Science Applications.
Zacks Rank and Other Key Picks
Science Applications currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are Alteryx, Inc. (AYX - Free Report) , Perficient, Inc. (PRFT - Free Report) and Fortinet, Inc. (FTNT - Free Report) . All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Alteryx, Perficient and Fortinet is currently pegged at 39.9%, 11.6% and 14%, respectively.
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