Science Applications International Corporation (NASDAQ: SAIC) is back on traders’ radar in a big way. On December 4, 2025, the stock surged roughly 16% after the company reported better‑than‑expected fiscal Q3 2026 earnings, raised full‑year guidance and highlighted a string of major U.S. government contract wins. [1]
Even after this sharp move, Wall Street remains broadly cautious with a consensus “Hold” rating, while several quantitative and valuation models argue the shares are still undervalued. That clash of narratives is exactly what makes SAIC stock interesting right now.
SAIC stock price today: a post‑earnings spike
By late trading on December 4, SAIC shares were changing hands around $101–102, up about $14 on the day and marking a gain of roughly 15–16% versus Wednesday’s close. Intraday, the stock traded between about $91 and $105, with volume running several times above its recent average. [2]
That move caps a sharp reversal from a difficult year: prior to the earnings release, SAIC was down more than 20% year‑to‑date and almost 30% over the past 12 months, according to Simply Wall St’s performance review. [3]
The catalyst for this sudden enthusiasm? A classic “messy but better than feared” quarter, plus improved guidance and strong free cash flow.
Inside SAIC’s Q3 2026 results: revenue down, earnings and cash flow strong
SAIC’s fiscal Q3 2026 covers the three months ended October 31, 2025. Here are the key numbers from the company’s official release and subsequent newswire coverage: [4]
- Revenue: about $1.87 billion, down roughly 5–6% year‑over‑year from around $1.98 billion.
- GAAP net income:$78 million, versus $106 million a year earlier.
- GAAP diluted EPS:$1.69, down from $2.13 in the prior‑year quarter.
- Adjusted EPS:$2.58, modestly below last year’s $2.61 but well ahead of analyst expectations in the $2.08–$2.19 range, delivering roughly a 24% earnings surprise depending on the provider. [5]
- Adjusted EBITDA: about $185 million, or 9.9% of revenue, slightly lower than last year’s margin but still healthy. [6]
- Free cash flow: roughly $135 million, a dramatic jump from about $9 million in the same quarter a year ago. [7]
Management and several news outlets highlighted that the revenue decline was driven by ramp‑downs and completions on older contracts, plus roughly $16 million of lost revenue tied to the recent U.S. government shutdown. [8]
So the high‑level story of the quarter is:
- Top line is shrinking modestly.
- GAAP earnings are down year‑over‑year.
- But the company is converting its revenue into strong cash flow, and adjusted earnings significantly beat expectations.
That combination—earnings resilience and cash generation despite revenue pressure—is exactly the kind of thing that can flip sentiment in a single session, which is what we’re seeing in the share price.
Bookings, backlog and guidance: why the Street liked the update
The bull case coming out of this report is not just about the quarter’s EPS beat; it’s about future work and margins.
From SAIC’s earnings release and follow‑up commentary: [9]
- Net bookings: about $2.2 billion in Q3, yielding a book‑to‑bill ratio of 1.2x for the quarter.
- Trailing 12‑month book‑to‑bill: also 1.2x, with year‑to‑date bookings around $7.2 billion.
- Backlog: approximately $23.8 billion, of which around $3.8 billion is funded.
In plain language: SAIC is currently signing more work than it is delivering, which suggests revenue pressure could ease in coming periods.
FY 2026 outlook raised
Just as important, management nudged full‑year fiscal 2026 guidance higher: [10]
- Adjusted EPS: now expected in the $9.80–$10.00 range, up from prior guidance of $9.40–$9.60.
- Revenue: now guided to about $7.275–$7.325 billion, a slight improvement at the low end of the prior range.
- Free cash flow: expected to exceed $550 million for the year, according to commentary summarized by The Motley Fool. [11]
On top of that, a Seeking Alpha summary of management’s comments notes that SAIC has also raised its FY 2027 adjusted margin guidance to around 9.9%, helped by cost savings and the integration of the SilverEdge acquisition. [12]
For income‑oriented investors, SAIC’s board also declared another $0.37 per share quarterly dividend, payable on January 28, 2026 to shareholders of record on January 14. At the current share price around $101–102, that equates to a forward dividend yield of roughly 1.5%, assuming the dividend is maintained. [13]
Big Pentagon contracts and SilverEdge: reinforcing the defense IT story
Beyond near‑term numbers, the strategic narrative for SAIC on December 4 includes major contract wins and a meaningful acquisition:
$1.4 billion COBRA contract and other awards
A report from StocksToTrade highlights that SAIC has secured a $1.4 billion U.S. Department of Defense contract, described as a multi‑year program to enhance multi‑domain warfighting technologies. [14]
The same article points to additional wins, including: [15]
- A $242 million award from the Naval Undersea Warfare Center to modernize a key propulsion facility.
- Collaboration with HavocAI to improve maritime awareness and Navy control systems.
QuiverQuant’s government contracts tracker separately notes that SAIC has received nearly $3.0 billion in U.S. government award payments over the last year across multiple large programs, underlining its entrenched position in federal and defense IT. [16]
SilverEdge acquisition and margin ambitions
SAIC also recently announced the acquisition of SilverEdge, a cyber and intelligence‑focused firm, for around $203 million. While the acquired revenue contribution in Q3 was immaterial, management has framed the deal as strategically important for higher‑margin, differentiated solutions. [17]
According to AI‑generated earnings call insights on Seeking Alpha, SAIC management expects SilverEdge to: [18]
- Strengthen the company’s competitive position and differentiation.
- Support higher revenue guidance in coming years.
- Help lift adjusted EBITDA margins and EPS over time.
They also highlight a program to redeploy roughly $100 million of cost savings into higher‑return initiatives, margin expansion and capability strengthening—essentially trying to shift SAIC’s mix toward richer, more defensible work. [19]
What Wall Street thinks: SAIC stock forecast and price targets
Despite the big one‑day gain, traditional equity analysts are mostly restrained rather than euphoric.
Data compiled by several platforms paints a broadly consistent picture: [20]
- Consensus rating: Around “Hold” / “Neutral” from roughly 8–9 covering analysts.
- Average 12‑month price target: generally clustered near $114–$116 per share.
- Target range: low estimates around $91–94 and high estimates up to about $128–$137.
Specific snapshots include:
- StockAnalysis.com: 8 analysts, consensus “Hold,” average price target about $115.13 (roughly 13–14% upside from ~$101), with a range from $91 to $137. [21]
- Investing.com: an average target around $115.6, with high $130 and low $94, and an overall “Neutral” stance. [22]
- MarketBeat: consensus Hold from 10 analysts, average target about $115.10; recent moves include Jefferies trimming its target from $130 to $115, and Goldman Sachs cutting from $104 to $91 with a “Sell” rating. [23]
- Public.com: notes 9 analysts with a Hold consensus and a price prediction around $114.56 as of December 4. [24]
Put simply, Street targets sit only modestly above the current price, implying mid‑teens percentage upside over 12 months, not a moonshot.
Fundamental forecasts: slow top‑line growth, stable earnings
Looking at aggregated revenue and EPS estimates: [25]
- Analysts expect fiscal 2026 revenue near $7.48 billion, essentially flat to slightly down versus the prior year.
- Fiscal 2027 revenue is projected to grow roughly 1–1.5% to around $7.6 billion.
- EPS is expected to jump in 2026 (helped by buybacks and margin initiatives) and then dip slightly in 2027, from about $9.73 to $9.46 on average estimates.
- Simply Wall St summarizes the consensus as revenue growing around 1.4% per year, EPS up about 3.3% annually, but overall earnings (on some metrics) drifting down ~2–3% per year as margins normalize. [26]
In other words, the Street is modeling SAIC as a slow‑growth, high‑cash‑flow government contractor, not a hyper‑growth tech play.
Quant and algorithmic forecasts: wildly different outcomes
Alongside human analysts, various algorithmic platforms publish model‑driven price paths for SAIC. These should be treated as scenario generators, not oracles—but they are part of today’s information flow.
Intellectia.ai: short‑term “Strong Sell,” moderate long‑term upside
Intellectia’s AI‑driven forecast describes SAIC as: [27]
- A “Strong Sell” in the near term based on its mix of technical signals, moving averages, short‑selling data and seasonality.
- Having more negative than positive technical indicators, including an overbought RSI above 70 and several momentum oscillators flashing caution after the big spike.
- Projected 1‑day and 1‑week gains of ~0–2%, but a slight pullback over one month, with a forecast around $86–87 before longer‑term recovery.
- A 2026 projection near $102 and 2030 around $137, implying modest long‑term upside from around $101 today.
So in Intellectia’s framework, SAIC has just had a sharp, overbought rally, and the model expects choppiness or downside in the short run, but doesn’t rule out solid gains over several years.
StockScan: extremely bullish long‑range targets
At the opposite extreme, StockScan’s long‑horizon model is spectacularly optimistic: [28]
- 2026 average price forecast: around $254, implying roughly +150% upside from about $101.
- 2027 forecast: about $310 on average, implying more than a tripling of today’s price.
- 2050 projection: an average near $1,600, which would be an eye‑watering long‑term return.
These numbers come from pattern‑based and statistical extrapolations rather than detailed fundamental models. Even StockScan notes the wide range of estimates and market uncertainty around such distant time frames.
The bottom line: quant models disagree as much as human analysts do—and often more. They’re useful for exploring “what if” scenarios, but none of them can guarantee outcomes.
Valuation views: cheap cash machine or value trap?
Several fundamental research platforms argue SAIC still looks undervalued, even after the December 4 pop—though most of that analysis was written at lower prices earlier in the week.
Simply Wall St: 50%+ undervalued on DCF
A fresh article from Simply Wall St (also dated December 4) re‑evaluates SAIC after its steep 2025 decline and concludes the stock screens as materially undervalued: [29]
- Using a discounted cash flow (DCF) model with last‑twelve‑month free cash flow around $450 million and long‑term growth assumptions, they estimate a fair value of about $187.56 per share.
- At the time of their analysis, the stock was trading near $87.53, implying SAIC was roughly 53% below their intrinsic value estimate.
- On a simple price‑to‑earnings basis, they see SAIC at roughly 10x earnings, versus an industry average near 25x and their own “fair” multiple near 19x, again suggesting undervaluation.
After a jump from ~$88 to ~$101, the discount to that fair‑value estimate is smaller, but the model would still imply considerable upside if its assumptions prove correct.
Cash flow and yield: the Motley Fool angle
The Motley Fool’s coverage, syndicated via Nasdaq, takes a similar stance from a cash‑flow perspective. With management guiding to free cash flow above $550 million for the year and a market value around $4.9 billion (at pre‑spike prices), the article notes that SAIC was trading at under 9x free cash flow, or closer to the low‑teens when including debt (enterprise‑value‑to‑FCF). [30]
Their argument: SAIC doesn’t need rapid growth to justify its valuation if it can sustain these cash‑flow levels and continue returning capital via dividends and buybacks.
Risk factors: what could go wrong from here?
For all the optimism in some models, there are real risks that help explain why many analysts remain on the sidelines.
1. Revenue pressure and government budgets
SAIC’s revenue has declined mid‑single digits year‑over‑year, driven by ramp‑downs on legacy contracts, run‑off on certain programs and the U.S. government shutdown. [31]
Management and Seeking Alpha’s earnings‑insights summary highlight key headwinds: [32]
- Pressure on civil agency budgets and IT spending priorities.
- Uncertainty around procurement timing following the shutdown.
- Risk from large program recompetes, where losing a single contract can hit revenue meaningfully.
If bookings momentum slows or budget constraints tighten, the bullish backlog narrative could weaken.
2. Margin execution and SilverEdge integration
SAIC is targeting higher margins through cost savings and the SilverEdge acquisition. But:
- Integrations carry execution risk—cultural fit, systems, retention of key staff, etc. [33]
- Some of the current margin strength reflects cost actions and mix; if those tailwinds fade, profitability could normalize lower.
3. Balance sheet and leverage
MarketBeat data shows SAIC with a debt‑to‑equity ratio around 1.2x and relatively tight current and quick ratios near 0.87, indicating a leveraged but manageable balance sheet. [34]
That leverage amplifies both upside and downside if cash flow were to disappoint.
4. Short‑term technical risk after a big spike
From a trading standpoint, Intellectia flags SAIC as technically overbought, with: [35]
- RSI above 70.
- Multiple oscillators and indicators showing “bearish” or overextended conditions.
- A cluster of 6 bearish vs 5 bullish technical signals after the post‑earnings jump.
In plain English: after a +16% day, it would not be surprising to see volatility, profit‑taking or sharp pullbacks, even if the longer‑term story remains intact.
Is SAIC stock a buy after the rally?
Whether SAIC is attractive after this move depends heavily on time horizon and risk tolerance, rather than on any single metric.
Here’s how the current setup looks:
Arguments in favor:
- Q3 showed resilient earnings and strong free cash flow despite revenue contraction. [36]
- Backlog of ~$23.8 billion and a 1.2x book‑to‑bill suggest a solid future workload. [37]
- Management raised FY 2026 EPS and margin guidance and is signaling confidence in a higher‑margin mix, supported by SilverEdge and cost programs. [38]
- Multiple fundamental models (DCF, P/E, FCF yield) still see the stock as undervalued, even if less dramatically so after today’s pop. [39]
- Investors get a modest but reliable dividend (currently ~1.5% yield) on top of potential price appreciation. [40]
Arguments for caution:
- Revenue is not yet growing; the company is still fighting contract roll‑offs and budget headwinds. [41]
- Most human analysts remain at “Hold”, with average price targets only mid‑teens above the new share price. [42]
- Short‑term technicals are stretched, and at least one sophisticated quant model labels the stock a near‑term “Strong Sell” despite acknowledging long‑term upside. [43]
- Government IT and defense work, while sticky, is exposed to policy risk, budget cycles and large‑contract concentration. [44]
For long‑term, fundamentally focused investors who are comfortable with U.S. government exposure and modest growth, SAIC now looks like a cash‑generating, reasonably priced contractor with improving guidance and a deep backlog.
References
1. www.stocktitan.net, 2. www.stocktitan.net, 3. simplywall.st, 4. www.stocktitan.net, 5. www.nasdaq.com, 6. www.stocktitan.net, 7. www.stocktitan.net, 8. www.stocktitan.net, 9. www.stocktitan.net, 10. www.stocktitan.net, 11. www.nasdaq.com, 12. seekingalpha.com, 13. www.stocktitan.net, 14. stockstotrade.com, 15. stockstotrade.com, 16. www.quiverquant.com, 17. www.stocktitan.net, 18. seekingalpha.com, 19. seekingalpha.com, 20. stockanalysis.com, 21. stockanalysis.com, 22. www.investing.com, 23. www.marketbeat.com, 24. public.com, 25. stockanalysis.com, 26. simplywall.st, 27. intellectia.ai, 28. stockscan.io, 29. simplywall.st, 30. www.nasdaq.com, 31. www.stocktitan.net, 32. seekingalpha.com, 33. seekingalpha.com, 34. www.marketbeat.com, 35. intellectia.ai, 36. www.stocktitan.net, 37. www.stocktitan.net, 38. www.stocktitan.net, 39. simplywall.st, 40. www.stocktitan.net, 41. www.stocktitan.net, 42. stockanalysis.com, 43. intellectia.ai, 44. www.quiverquant.com
