Science Applications (SAIC) Grabs $156M US Army Contract
Science Applications International Corporation SAIC has secured a $156 million contract to offer system support to the U.S. Army Reserve Command (“USARC”) under the United States Army Reserve Command Information Technology Support Services (USARC ITSS II) contract. Leveraging its extensive history of collaboration with the U.S. Army Reserve, Science Applications aims to deliver innovative, cost-effective and mission-oriented managed IT services.
The contract focuses on consolidating global enterprise IT services for USARC, ensuring standardized, responsive and cost-effective solutions. SAIC's efforts will enhance mission value, user experience, cybersecurity and network reliability for more than 65,000 users across 700 locations worldwide. This initiative reinforces Science Applications' commitment to supporting program modernization for the U.S. Army Reserve through advanced IT solutions.
Rising Revenues
SAIC is capitalizing on the surge in demand for its technology solutions, driven by the ongoing digital transformation in defense, space, intelligence and civilian sectors. The company's strategic business development, operational excellence and customer satisfaction have resulted in a robust contract backlog of $23.1 billion as of Nov 3, 2023.
Science Applications International Corporation Price and Consensus
Science Applications International Corporation price-consensus-chart | Science Applications International Corporation Quote
Science Applications’ revenues largely stemmed from the U.S. government, accounting for 98% of its total income. The company’s main clients are different government agencies, such as the military branches, the Department of Homeland Security, NASA and the Department of State, with whom it has prime contracts or subcontracts through other companies.
Having the government as a major client provides stability to the business and minimizes revenue fluctuations. While government projects typically undergo a prolonged approval process, once sanctioned, they generate revenues for several years. Government contracts enhance the predictability of future revenue streams. Additionally, anticipated increases in federal spending are expected to accelerate contract awards, contributing to the company's top-line growth.
In the third quarter of fiscal 2024, Science Applications reported a 10.6% increase in revenues, demonstrating the positive impact of existing and new contracts. Adjusted earnings per share rose by 19%, reflecting strong operational performance, a lower tax rate and a reduced outstanding share count.
Zacks Rank & Other Stocks to Consider
Currently, Science Applications sports a Zacks Rank #1 (Strong Buy). The stock has risen 21.4% in the trailing 12 months.
Some other top-ranked stocks from the broader technology sector are Zoom Video Communications Inc. ZM, NVIDIA Corporation NVDA and Amazon.com AMZN. While Zoom sports a Zacks Rank #1, NVIDIA and Amazon each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Zoom’s fiscal 2024 earnings has been revised upward by 28 cents to $4.94 per share in the past 60 days, suggesting year-over-year growth of 13%. The long-term estimated earnings growth rate for the stock stands at 33.5%. Shares of ZM have risen 1.4% over the past year.
The consensus mark for NVIDIA’s fiscal 2024 earnings has been revised upward by 2 cents to $12.31 per share over the past 30 days, indicating a whopping 269% increase from fiscal 2023. It has a long-term earnings growth expectation of 13.5%. In the trailing 12 months, NVDA stock has surged 223.7%.
The Zacks Consensus Estimate for Amazon’s 2023 earnings has been revised upward by 2 cents to $2.69 per share in the past 30 days, which calls for an increase of 278.9% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 28.5%. AMZN stock has returned 57.6% over the past year.
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