Recent share performance and business profile

Science Applications International (SAIC) has been in focus for investors after a month return of about a 14% decline, contrasting with an 8.3% gain over the past 3 months and a 5 year total return of 11.8%.

The Reston based contractor generates about US$7.35b in annual revenue and US$371m in net income, providing technical, engineering and enterprise IT services across U.S. defense, intelligence and civilian agencies.

At a share price of US$97.92, Science Applications International has seen a 14.1% one-month share price decline after an 8.3% three-month share price return. The 5-year total shareholder return of 11.8% points to a steadier long-run outcome and suggests that recent momentum has cooled, with investor sentiment potentially reassessing risk and growth expectations.

If this move has you looking beyond SAIC, it could be a good moment to scan other defense and infrastructure focused names through our 24 power grid technology and infrastructure stocks as a fresh set of ideas.

With SAIC trading at US$97.92, an indicated intrinsic discount of about 51% and a 20% gap to analyst targets raise a clear question for investors: is this genuine value, or is the market already pricing in future growth?

Most Popular Narrative: 13.6% Undervalued

Compared to the last close at $97.92, the most followed narrative points to a fair value of about $113.38, built on detailed cash flow assumptions.

The analysts have a consensus price target of $116.0 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 $130.0, and the most bearish reporting a price target of just $91.0.

Curious what supports that higher value than today’s price? The narrative leans heavily on modest growth, steady margins and a future earnings multiple that is not extreme by sector standards. The exact mix of revenue, profit and discount rate assumptions might surprise you.

Based on this narrative, Science Applications International screens as undervalued relative to its implied fair value of $113.38, using an 8.30% discount rate and detailed earnings and cash flow expectations.

Result: Fair Value of $113.38 (UNDERVALUED)

However, that upside case could be derailed if government budget pressure keeps contract awards soft, or if rising competition squeezes pricing and margins.

Build Your Own Science Applications International Narrative

If you see the numbers differently or simply prefer your own work, you can test your assumptions and build a full narrative in just a few minutes: Do it your way

A great starting point for your Science Applications International research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

Ready for more investment ideas?

If you are serious about sharpening your portfolio, do not stop at one contractor. Use the screener to uncover new ideas before the crowd catches on.

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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.