SAIC Stock Forecast & Price Target

Science Applications International Corp (SAIC) showcases a positive outlook driven by its robust performance in the Defense and Intelligence segment, which is heavily supported by increasing defense budgets and potential large contract wins. The company's guidance for fiscal year 2027 indicates a 2-3% on-contract growth backed by a notable rise in net total addressable market, as evidenced by an improved NTM RPO coverage of 68%, significantly above historical averages. Furthermore, strong program execution and cost-efficiency measures have led to an EBITDA margin of 10.3%, coupled with expectations of substantial free cash flow generation in fiscal year 2028, enhancing shareholder returns through prudent capital deployment strategies.

Science Applications International Corp (SAIC) is facing an implied organic revenue decline of 2%-4%, largely stemmed from recompete losses expected to total around $400 million for FY26. The company reported a final fourth-quarter revenue of $1.75 billion, marking an organic contraction of approximately 6% year-over-year, contributing to an overall FY26 revenue drop of about 3%. Additionally, SAIC's portfolio reflects concerns of structurally slower growth and lower margins, compounded by risks such as unexpected federal budget disruptions and competitive pricing pressures that could adversely impact profitability and growth prospects.