Why SAIC Stock Soared Today

2 days ago 6

SAIC bushed easy connected net this morning.
Sales and nett inactive declined, but the book-to-bill ratio looks encouraging.
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Defense and IT contractor Science Applications International Corporation (NASDAQ: SAIC) -- "SAIC" to its friends -- got truly fashionable this morning, soaring 17.9% done 11:15 a.m. ET aft crushing its fiscal Q3 2026 net report.

Analysts thought SAIC would gain lone $2.15 per stock (adjusted for one-time items) connected $1.87 cardinal successful sales. SAIC nailed the income forecast, but turned those income into nett of $2.58 per share.

Not each the quality was good. SAIC's income fell 6% and operating nett decreased 20%, resulting successful a 120-basis-point deed to operating margin. Bottom-line profits bushed expectations, but inactive fell 1% (adjusted). Worse, nett net arsenic calculated according to mostly accepted accounting principles (GAAP) tumbled 21% to $1.69 per diluted share.

On the positive side, SAIC did grow escaped currency travel substantially. SAIC generated $135 cardinal successful existent currency nett successful the quarter, and that exceeded some reported operating income and nett income.

In different affirmative news, SAIC reported a book-to-bill ratio of 1.2x, suggesting income maturation whitethorn accelerate going forward. Indeed, guidance suggests precisely this: Management raised income guidance slightly, and present expects to grounds astir $7.3 cardinal successful income this year. Adjusted nett volition scope from $9.80 to $10 per share, and escaped currency travel is inactive expected to transcend $550 million.

Now here's the champion quality of all: SAIC banal lone costs astir $4.9 billion. On $550 cardinal successful FCF, that gives the banal a price-to-free currency travel ratio of conscionable 8.9. Even factoring indebtedness into the picture, SAIC's not excessively costly astatine an endeavor worth to FCF ratio of 13.3x.

SAIC shouldn't person to turn precise accelerated astatine each to warrant that terms and marque SAIC banal a buy.

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