One-glance verdict
Undervalued
$258.57 our estimate vs market $125.26
Wall Street consensus: $133.70 (-48.3% lower than our fair-value estimate)
52% below our estimate, below the bear case
Fundamentals snapshot
Science Applications International Corporation
SAIC · NMS · Technology · Information Technology Services
Current price
$125.26
52-week range
$81.08 - $142.66
Market cap
$5.25B
Balance sheet
Stretched
4.07x Stretched
Net debt $2.58B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 1.9% last year.
- Reward Returns 25.7% on equity, ahead of 33% of its peers.
- Risk Net debt grew 3.6% over 3 years.
- Risk Insider ownership is only 0.8% (peer median: 1.2%).
What this company does
Science Applications International Corporation
Science Applications International Corporation (SAIC) is a technology contractor that helps the U.S. government, especially the military and intelligence agencies, with complex projects like modernizing computer systems and developing artificial intelligence. The company's income comes almost entirely from these government contracts, which often last for years and can provide a predictable stream of recurring revenue (money a company expects to receive on a regular basis). This means its success is closely tied to the government's budget and spending decisions.
How the company got here
Founded in 1969 by a physicist, the original Science Applications International Corporation focused on scientific projects for the U.S. military and government, like studying nuclear weapons effects. A major turning point came in 2013 when the company split into two, creating the modern SAIC focused on government technology services and a separate company named Leidos. Since then, SAIC has grown by acquiring other companies to expand its expertise, particularly in areas like intelligence, IT modernization (updating government computer systems), and cloud computing (providing internet-based data storage and services).
What it actually does
SAIC is essentially a high-tech problem solver for the U.S. government, especially the military and intelligence agencies. It doesn't sell physical products you'd see in a store, but instead provides services like upgrading computer systems, managing large and complex technology projects, and offering engineering and cybersecurity (protecting computer networks from attack) support. Think of them as a contractor that the government hires to manage the technology side of its operations, from designing secure networks to running training simulations for soldiers.
Defense and Intelligence
This is SAIC's largest business area, making up the majority of its revenue. The main customers are branches of the U.S. military (like the Army and Navy) and national security agencies. SAIC provides them with a wide range of technology services, including modernizing their IT infrastructure, developing secure communication systems, and offering engineering and mission support for complex defense programs. A large portion of the employees in this segment hold security clearances, allowing them to work on sensitive and classified government projects.
Civilian
This part of the company serves non-defense government agencies at the federal, state, and local levels. Customers include agencies like the Department of Homeland Security, NASA, and the Department of Justice. For these clients, SAIC provides services such as updating their technology systems, managing large IT projects, and ensuring their digital infrastructure is secure and efficient. For example, SAIC has worked with U.S. Customs and Border Protection to modernize its systems for screening travelers and cargo.
What management is betting on now
The company's leadership is focused on winning large, long-term government contracts for modernizing technology. This includes key areas like moving government agencies to the cloud (more flexible and modern data storage), improving cybersecurity to protect against digital threats, and using artificial intelligence (AI) to analyze large amounts of data. They are also reorganizing the company to work more closely with specific customer groups, like the Army and the Air Force, to better understand their needs and win more business. This strategy aims to secure stable, recurring revenue (predictable income from long-term contracts) and generate strong free cash flow (cash left over after paying for business operations and investments).
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$132.00M
FY2025 Q4
$134.00M
FY2026 Q2
$92.00M
FY2026 Q3
$115.00M
FY2026 Q4
$250.00M
FY2027 Q2
$118.00M
Revenue
$1.91B
Net income
$115.00M
Diluted EPS
2.61
Operating cash flow
$127.00M
Free cash flow
$118.00M
Fetching…
Sources
Revenue
$1.75B
Net income
—
Diluted EPS
1.88
Operating cash flow
$258.00M
Free cash flow
$250.00M
Fetching…
Sources
Revenue
$1.77B
Net income
$127.00M
Diluted EPS
2.71
Operating cash flow
$122.00M
Free cash flow
$115.00M
Fetching…
Sources
Revenue
$1.88B
Net income
$68.00M
Diluted EPS
1.42
Operating cash flow
$100.00M
Free cash flow
$92.00M
Fetching…
Sources
Revenue
$1.98B
Net income
$106.00M
Diluted EPS
2.13
Operating cash flow
$143.00M
Free cash flow
$134.00M
Fetching…
Sources
Revenue
$1.82B
Net income
$81.00M
Diluted EPS
1.58
Operating cash flow
$138.00M
Free cash flow
$132.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $258.57 vs current price $125.26
Wall Street consensus is the average analyst price target: $133.70 (-48.3% lower than our fair-value estimate).
Our most-likely fair value is $258.57 a share — about 106.4% above today's price of $125.26, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $2.6B. Interest coverage 4.1x.
Net debt
$2.58B
Interest coverage
4.07x
Science Applications International Corporation's profit covers its interest bill about 4.1 times over.
Stretched
Worse cushion
Baseline
Better cushion
SAIC
BASELINE
Science Applications International Corporation
Total debt $2.70B Interest coverage 4.07x This is the baseline the peer rows are being compared against.
Total debt $6.58B Interest coverage 10.34x +154% vs SAIC Carries about 2.5x more debt cushion than SAIC.
Total debt $5.38B Interest coverage 4.27x +5% vs SAIC Has roughly the same debt cushion as SAIC.
Total debt $4.16B Interest coverage 4.97x +22% vs SAIC Carries about 1.2x more debt cushion than SAIC.
Total debt $2.80B Interest coverage 3.59x -12% vs SAIC Has roughly the same debt cushion as SAIC.
Total debt $564.79M Interest coverage 4.72x +16% vs SAIC Carries about 1.2x more debt cushion than SAIC.
What you should know
The case for and against SAIC
3 Rewards
2 Risks
Rewards
-
Revenue grew 1.9% last year.
-
Returns 25.7% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 3.6% over 3 years.
-
Insider ownership is only 0.8% (peer median: 1.2%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
14.74x
Forward P/E
10.91x
P/B
3.79x
P/S
0.71x
EV/EBITDA
10.39x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
12.7%
Operating margin
8.1%
Net margin
5.1%
ROE
25.7%
ROA
7.0%
Health
Liquidity and balance-sheet strength
Debt / equity
1.88x
Current ratio
1.20x
Quick ratio
1.06x
Total debt
$2.70B
Total cash
$126.00M
Growth
How the business has been compounding
Revenue TTM
$7.40B
Revenue 5Y CAGR
-0.4%
EPS TTM
8.50
EPS 5Y CAGR
12.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$660.00M
Free CF TTM
$577.00M
FCF margin
7.8%
Dividend
Shareholder payout
Yield
1.2%
Payout ratio
17.2%
Last ex-div date
2026-10-09