Science Applications International (SAIC) Could Be 8% Overvalued As $400 Million Contract Adds Momentum
Science Applications International (SAIC) recently secured a $400 million recompete contract with a U.S. Intelligence Agency, bringing Intel Space awards to more than $1.6 billion in the first half of Fiscal Year 2027.
See our latest analysis for Science Applications International.
These new Intel Space awards arrive as Science Applications International shares trade at US$126.68, with a 30 day share price return of 9.67% and a 90 day share price return of 32.90%. The 5 year total shareholder return of 61.98% points to stronger gains over a longer horizon and suggests momentum has been building recently around the stock.
If you are assessing how this contract win fits into a broader government and technology theme, it can be useful to look beyond a single stock and review 40 power grid technology and infrastructure stocks
Science Applications International looks like a solid government IT contractor with fresh contract momentum and a long track record. After the recent share price run, the real question is whether that strength is already fully reflected in today’s valuation.
Most Popular Narrative: 7.5% Overvalued
The most followed narrative currently places Science Applications International's fair value at $117.80, which sits below the recent $126.68 close and frames the latest contract news against tighter return expectations.
The analysts have a consensus price target of $117.8 for Science Applications International based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $137.0, and the most bearish reporting a price target of just $85.0.
Want to see what is really baked into that fair value for Science Applications International? The narrative leans on modest revenue trends, softer margins and a richer future earnings multiple. Curious which assumptions matter most and how they interact over time? The full story sits behind those moving parts.
Result: Fair Value of $117.80 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there are still clear risks for Science Applications International if government IT budgets stay tight or if contract competition intensifies, which could pressure margins and earnings.
Find out about the key risks to this Science Applications International narrative.
Another View: What Multiples Say About Science Applications International
While the analyst narrative points to Science Applications International as 7.5% overvalued at $117.80 fair value, the current P/E of 13.2x paints a different picture. It sits well below the US Professional Services industry at 22.1x, a peer average of 22.2x, and a fair ratio of 16.5x.
This gap suggests the market is pricing in more risk or lower future growth than those comparison points imply. The key question for you is whether that discount reflects genuine business risk or an opportunity if earnings and cash flows stay on track.
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Given the mixed signals around valuation and sentiment on Science Applications International, it makes sense to move quickly and review the full picture for yourself. To see both sides in one place, check out the 3 key rewards and 1 important warning sign.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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